Understanding “Sequestration”

Last year, Congress and the President worked together to pass the Budget Control Act of 2011 (BCA) to address immediate and long-term fiscal concerns for our nation. (Read Generations United’s full statement on the BCA.) Because Congress couldn’t agree on how to cut the federal budget, automatic across the board cuts – known as sequestration - will kick in in January 2013.

These automatic cuts will be applied in a 50-50 split between defense and non-defense spending. This represents $54.7 billion in domestic spending which will be cut from a wide range of programs, including programs that are vital to children, youth and older adults.

Sequestration will affect both mandatory and discretionary domestic funding sources. Mandatory cuts will include:

• Cuts in Medicare payments to providers and insurance plans; those cuts are limited to 2 percent of such payments in any year, or $11 billion in 2013.  This means that Medicare providers will continue to bill Medicare in the normal way but will be reimbursed at a rate of 98 cents on the dollar.
• About $5.2 billion in cuts in the other mandatory programs, the biggest of which supports farm prices; other affected programs include student loans, vocational rehabilitation, mineral leasing payments, the Social Services Block Grant, and dozens of smaller programs.

Other domestic programs, which are funded through discretionary spending, would face even more drastic cuts of $35.5 billion – or 8.4%. The bulk of the cuts to domestic spending would be to important programs for children, youth and older adults. These include Head Start and K-12 education funding, the Low Income Home Energy Assistance Program (LIHEAP), employment and nutrition programs for older adults, and funding to implement the Affordable Care Act.

(For a listing of projected cuts, see the Coalition on Human Needs’ report Self-Inflicted Wounds: Protecting Families and Our Economy from Bad Budget Choices.)

Congress is currently discussing ways to avoid sequestration, but some proposals would protect defense spending at the expense of even deeper cuts to domestic programs, or even those exempted from cuts under the BCA (such as, Medicare, SNAP, and Temporary Assistance for Needy Families (TANF)).

Generations United urges Congress and the President to protect our nation’s most vulnerable and invest in our country’s future by supporting proposals which would provide adequate revenue to address the needs of our citizens.

Want to stay up-to-date on the federal budget debate? Subscribe to Generations United’s Policy Alerts.

The Benefits of Health Care Reform

Many folks have asked, "What, exactly, will health reform mean to me?" Below is a list of some of the many benefits available to children, youth, families, and older adults through health care reform. If you would like more detailed information on everything in the legislation, visit the Washington Post, the Kaiser Family Foundation, and the Center for Budget and Policy Priorities.

Benefits for Children, Youth, and Families*

· Guarantee access to health coverage for 95% of all children
· Prevent insurance companies from denying coverage because of pre-existing conditions or annual or lifetime limits (eliminating pre-existing conditions for children will take effect immediately)
· Children now covered in parent’s plan till age 26
· Expansion of CHIP for children aging out of foster care
· Medicaid expansion up to 133% of poverty
· Medicaid reimbursement rate raised for states
· Maintain the Children’s Health Insurance Program (CHIP) until it is determined whether the new “health insurance exchanges” are safe for children and provide them benefits and cost protections comparable to or better than they have now
· Fund CHIP through 2015 – doubling the number of eligible CHIP children that can be served from 7 to 14 million
· Extend coverage for youths in foster care to age 26.

Benefits for Seniors*

· Encourage states to develop more choices of long-term care services, to enable older people to live in their own homes instead of more expensive nursing homes.
· New regulations on insurance companies would bar them from dropping the coverage of people who get sick, and from putting lifetime caps on coverage. Starting in six months insurance companies could not discriminate against children with preexisting conditions; by 2014 all ages would receive that protection.
· Those in Medicare Part D who fall into the “doughnut hole,” and have to pay all their prescription drug costs for part of the year, would get immediate help this year from a $250 rebate. Next year they would get a 50 percent discount on brand-name drugs, and by 2020 the doughnut hole would be closed completely.
· Medicare would cover preventive services with no copayments, and those costs would not apply to the deductible.
· A new insurance exchange would help people who don’t have affordable insurance through their jobs. Until the exchange is set up, employers who give health care benefits for retirees ages 55 to 64 would get federal aid through a temporary reinsurance program.
· A new long-term care insurance program, which workers could pay into, would help them if they become ill or disabled and need help with basic services in order to stay in their homes.
· The Senate bill would strengthen Medicare by requiring insurance companies to competitively bid to offer private Medicare Advantage plans, a move that is estimated to save $118 billion from 2010 to 2019. Currently Medicare beneficiaries are subsidizing enrollees in these plans, which cost an average of 14 percent more than traditional Medicare.

* Benefits assume enactment of Reconciliation Patch (the Senate is expected to pass the patch later this week).

Sources (http://bulletin.aarp.org/yourhealth/policy/articles/democrats_release_their_final_health_care_reform_package.html, http://www.childrensdefense.org/helping-americas-children/childrens-health/health-coverage-for-all-children-campaign/health-reform-legislative-update.html)

Policy Alert: President Obama to Speak on Health Care Reform at George Mason University

This Friday, March 19, 2010, President Obama will speak on the urgent need for health care reform in Fairfax, Virginia at George Mason University’s Patriot Center. Doors open at 9:00AM EST and the event kicks off at 11:30AM. This event is free and open to the public and doors open at 9 AM. No tickets are required for this event. Please arrive early to ensure admittance.

If you plan to attend, please email mness@gu.org with the subject “Health Care RSVP” and include the number of attendees.


EVENT LOCATION
The George Mason University Patriot Center
4500 Patriot Circle
Fairfax, VA 22030

Further information is available at www.whitehouse.gov/GMUremarks

Three Things Robert Samuelson Missed in today’s column

Three Things Robert Samuelson Missed in today’s column

It shouldn’t surprise anyone that Robert Samuelson would try and foment intergenerational conflict – I have blogged about his misguided views before. Samuelson continually tries to swim upstream by inventing imaginary cleavages between the generations. Samuelson recycles some of those arguments in today’s Washington Post and I could quarrel with most of what he writes, but I thought I would highlight three specific points that Samuelson misses:

1. Young people currently benefit from Social Security and Medicaid and will continue to enjoy its benefits when they get older. Samuelson mistakenly labels entitlement spending as a payout to today’s seniors. Social Security pays benefits to more children than any other federal program. Six and half million children receive assistance through Social Security from its survivors benefits program. Crucially, 98% of the children in the US are covered through the program if they were to lose a parent. The program provides vital financial security for our nation’s children. Additionally, the vast number of Medicaid recipients are children. Yes, the majority of Medicaid money goes toward paying the long-term care costs of our seniors, but it is still a critical program for our nation’s poorest children. Of course, it goes without saying (unless you are Robert Samuelson) that today’s children will eventually grow old and will continue to benefit from these programs.

2. The current insurance market is not working. Samuelson takes issue with the House and Senate bills because they limit the ability of insurance companies to charge different rates based on your age. Samuelson wants to defend the status quo on the health insurance market when it clearly isn’t working. Debt from medical care is the single biggest reason for bankruptcy in the US. The current market makes it very difficult and prohibitively expensive for older adults to purchase insurance in the individual market. Yes, younger Americans will be subsidizing older Americans to a degree, but that’s the only way to make sure everyone is covered. Not having health insurance is different from car insurance and homeowners insurance. The stakes are higher when it comes to your health. The country cannot continue to tolerate millions of uninsured citizens (young or old).

3. Young people are the most enthusiastic supporters of health insurance reform. Samuelson frequently cries out for young people to get mad at their grandparents’ generation for perceived political injustices. Once again, young people are ignoring his battle call; because they realize the need for reform – many of them witnessed their parents go without insurance. Millennials, like the grandparent's generation are drawn to the call to service and realize that our nation’s problems require shared sacrifices from everyone.

-Terence Kane

Gerson off Target

Michael Gerson has distinguished himself in the past as a protector of the vulnerable in society. However, he seems to have lost sight of his own ideals in his column today in the Washington Post. Instead of commending young people in this country for recognizing the importance of shared rights and responsibilities, Gerson tries to pit the young and old against each other.

One of the big goals of health care reform is to provide insurance to those that cannot afford coverage in the current market – this includes children and older adults under 65. In order to extend coverage to the uninsured, you have to spread the risk of becoming sick across society. Gerson also confuses mandating coverage for the young working population with providing supports to children. Children, like seniors often are priced out of the insurance market (they have trouble adding to their parents income). One of the best provisions of the House health care bill is to extend Medicaid eligibility to 150% of the federal poverty limit. The provision will help ensure children uninsured and those currently in CHIP are covered.

Budget and deficit hawks continually quack (or whatever sound a hawk makes), “Would someone please think of the grandchildren.” In reality, they rarely propose an actual increase in benefits for children and grandchildren. Their Maude Flanders-like-retort is often just a smoke screen for a trying to reduce public spending for everyone. They also routinely mistake entitlement programs like Social Security and Medicaid as simply a payout to senior voters, but they are much more. Over six million children receive a cash benefit from Social Security and Medicaid provides essential medical care to the poorest children in society.

In 1983, Bill Bradley called Social Security, “the best expression of community that we have in this country today.” If you want to provide supports for our country’s children and grandchildren, the best way to do so is to support programs that broadly spread risks and supports across society like health care reform.

-Terence Kane

A Question of National Character

President Obama called a joint session of Congress last night to renew his call for health care reform. I was pleased he took the opportunity to dispel the myth that our nation’s seniors will be subject to “death panels.” I also think he made the point effectively that the status quo in our health care system is unsustainable for the uninsured and underinsured. Critics of reform have made the point that we will be unduly burdening our grandchildren with debt if we expand health insurance, but there is greater danger that our grandchildren will never grow up to be healthy, productive adults if we don’t invest in them and their caregivers now. We’ve provided insurance for every older American over 65, it’s time to do the same children and their parents.

One last thought, what is it about South Carolina politicians lately playing out on the national media scene as philanderers and foul-mouthed? Our children and grandchildren deserve better examples of civility and self-control.

Generational Fiction in Times Op-Ed

Richard Dooling, a successful novelist, tries his hand at health policy in a provocative, though ultimately misguided, op-ed today’s New York Times.

It’s the job of any novelist to make his narrative stimulating and interesting, but the picture Dooling paints of greedy seniors selfishly milking away the earnings of grandchildren while they receive unnecessary medical treatment is farcical. Dooling creates a false choice between funding unnecessary and expensive surgeries for terminal patients and funding preventive care for children:
[…] shouldn’t we instantly cut some of the money spent on exorbitant intensive-care medicine for dying, elderly people and redirect it to pediatricians and obstetricians offering preventive care for children and mothers?

The source of the rising cost doesn’t come from seniors’ desire to rip off their grandchildren, as Dooling suggests, it comes from a poorly structured Medicare reimbursement system that pays for procedures and not health outcomes. Healthcare reform is not about denying care for seniors, it’s about changing the incentives of Medicare payments so that seniors get better outcomes. The Mayo Clinic is able to bill Medicare significantly less than other hospital systems, yet delivers excellent care. Medicare needs to reward healthcare systems like the Mayo Clinic and pay for progress, not process.

Dooling is correct that healthcare reform is also about extending healthcare coverage to the 8 million uninsured and underinsured children in America, but grandchildren don’t want to get healthcare if it means taking away their grandparents’ arthritis medication (especially since about 4.5 million children are being raised by grandparents). Our country has provided healthcare to all seniors; it’s now time to extend that benefit to all children. Threatening generational warfare may not be a novel technique in public policy debates; it is, however, tired and worn. We are not a country of isolated self-interested generations, but of connected and interdependent families and communities.

-Terence Kane
Note: The following is published from The Hill's Pundits Blog.