Congressional Panel Looks Over Medicare

Published in Woonsocket Call on March 20, 2016

Last Wednesday’s hearing of House Ways and Means Health Subcommittee signals the panel’s interest to bring Medicare, a federal health insurance program for people age 65 and over, into the 21st century to meet the needs of its current 55.3 million beneficiaries.

At the March 16 hearing, Chairman Pat Tiberi (R-OH), stated that “Today’s seniors [are] inundated with an array of confusing deductibles, coinsurance and copayments with no protection from high health care costs unless they enroll in a private plan. Despite major improvements and innovations in the health care sector that have transformed how care is delivered, traditional Medicare has barreled through the last 50 years on the same trajectory of increased costs and little innovation.”

In addition to the structural challenges facing the program, critical parts of Medicare are expected to run out of money by 2026. In other words, the benefits Americans were promised stand to disappear if policymakers don’t act soon, says Tiberi.

Putting the Spotlight on Medicare

Tiberi’s March 16 Health Panel hearing, entitled “Preserving and Strengthening Medicare,” held in room 1100 of the Longworth House Office Building, brought together three witnesses to discuss ways to sustain the nation’s Medicare program and to keep it from going bankrupt. From both sides of the aisle and expert witnesses all agreed that the federal government’s current approach to delivering high-quality health care is not working. As a result of an outdated Medicare program and harmful Obamacare policies, today’s seniors “must navigate a disjointed program, face rising health care costs, and have fewer healthcare choices,” says the GOP panel chairman.

“Of federal entitlements, Medicare presents the most difficult challenges,” says Heritage Foundation Senior Fellow Robert Moffit, warning that the Trust Fund “faces insolvency in 2026.”

At the hearing, Moffit gave his fix for revamping Medicare that have bipartisan support and promise to shore up the ailing entitlement program. He called for the Medicare program to be simplified by combining Parts A and B – including catastrophic coverage, an out-of-pocket cap, a single deductible, and uniform coinsurance in a single plan along with bringing reforms to Medigap coverage. Also, retargeting Medicare benefits to low-income enrollees can provide assistance to lower-income enrollees. Increasing Medicare’s eligibility age to 67 (the same eligibility age for Social Security) along with encouraging innovation and cultivating competition through Premium Support can put the brakes to rising program costs.

When it comes to simplifying Medicare and incorporating catastrophic coverage, Tiberi had called the need for reform a “no-brainer.” Moffitt overwhelmingly agreed, stating, “It is a no-brainer. It is absolutely a no-brainer … [seniors] do not have protection from the most important thing that health insurance should deliver, which is that ultimate protection.”

As Moffit explained, the lack of catastrophic coverage in Medicare not only puts financial strain on the beneficiary, but it also causes a significant increase in unnecessary health care spending.

Coming Up with a Commonsense Approach

In her testimony, Katherine Baicker, Harvard University Professor of Health Economic and serves on the Medicare Payment Advisory Commission, also called for commonsense solutions, specifically focused on the need for increased competition. She heighten the role that Medicare Advantage program plays in promoting innovation, as well as providing more seniors flexibility, choice, and quality at an affordable cost.

Baicker emphasized, “A thriving and competitive Medicare Advantage program can be a vital contributor to high quality beneficiary care in a sustainable health care system.”

When Baicker was asked which Obamacare provisions Congress should work to immediately repeal in an effort to protect Medicare Advantage, she replied, “I would like to see the cap on quality bonuses removed … and removing the double bonus for quality so that you’re appropriately rewarding plans for delivering the high-quality care that beneficiaries are seeking out.”

Finally, Stuart Guterman, senior scholar in residence at
AcademyHealth, told the panel that he believes the nation’s largest purchaser of health care can do more to ratchet up quality, enhance quality and coordinate care and control costs. “Because of Medicare’s unique position, it can be an important testing ground for cost and quality innovations. Policies have been put in place that encourage such development, including the expanding the power of the Secretary of Health and Human Services to put pilot programs on a ‘fast track’ and to work with private payers and providers to establish multi-payer initiatives.”

At the conclusion of the two hour hearing, like Baicker, Tiberi stressed the importance of bolstering support for Medicare Advantage, which serves approximately one-third of seniors today. Obamacare cut billions of dollars from Medicare Advantage and redirected those resources toward a one-size-fits-all, Washington-run entitlement, he says.

Tiberi also noted, “If we continue to berate a system that has been widely successful…I don’t think that’s a really good way to try to figure out how we bester serve patients, seniors, in a more cost-effective value-added, comprehensive way.”

Watching from the Sidelines

But, one aging group expressed strong concerns about the Health Panel’s look at Medicare. In his released statement, Max Richtman, President/CEO of the Washington, D.C.-based National Committee to Preserve Social Security Medicare (NCPSSM), viewed the Health Panel hearing as “an Orwellian political exercise in which politicians say preserve when they actually mean privatize, and strengthen when they mean slash.”

“Republicans in the House envision a future in which millions of seniors will lose their guaranteed Medicare benefits in favor of a privatized CouponCare system in which they receive a government coupon to try and buy private insurance. Millions of seniors in Medicaid will lose their benefits due to block-granting to states without providing the resources to pay for it. The repeal of the Affordable Care Act will leave tens of millions without insurance and strip benefits from seniors in Medicare,” says Richtman in NCPSSM’s statement.

Furthermore, “The Republican leadership has offered no plans to improve benefits in Medicare or make reforms to reign in the skyrocketing price of drugs and healthcare costs system wide. Instead, the GOP vision for seniors in Medicare is they must just do more with less. Stagnant wages are grinding away at the middle class’s ability to save for retirement. Many employers have significantly scaled back or eliminated the traditional retirement benefits offered to their employees. As a result, current and future retirees simply cannot afford proposals to cut benefits, raise the eligibility age or privatize the program,” says in the NCPSSM statement.

Finally, the aging advocate warns that the GOP majority on the House Ways and Means Health Subcommittee majority is moving to replace the nation’s traditional Medicare program in favor of a fully privatized system, and the GOP controlled House is in the process of producing a budget that would do just that.

A Democratic or Republican President? Which political party controls the House and Senate? When the dust settles these answered questions may result in a restructuring of the Medicare program, that may either be strengthened and expanded or put on the budgetary chopping block by the new incoming President or Congress. It’s a no brainer…Sitting on the political sideline will ultimately be detrimental to your pocketbook and coverage you receive for your health care.

Raimondo Rolls out Educational Initiative to Financially Empower Rhode Islanders

Published in the Pawtucket Times, August 2, 2013

Everybody has been hit hard over the years with the economic downturn in the Ocean State. The statistics are startling about the impact on Rhode Islander’s pocketbooks. According to the Office of the General Treasurer, two-thirds of Rhode Islanders reported some difficulty in covering their expenses and paying bills. Startling the average borrow in our state has $13,221 in credit card debt, the 5th highest amount in the nation. Almost 47% of the Ocean State’s homeowners are “cost burdened,” that is home ownership costs more than 30 percent of their income.

During her first term, overcoming strong opposition of union groups, Rhode Island General Treasurer Gina M. Raimondo, working with Governor Chafee and leadership in the General Assembly, successfully redesigned Rhode Island’s state-administered public employee pension system. Now the Smithfield native, and mother of two, who graduated from LaSalle Academy, Harvard University and Yale Law School, who became a Rhode Scholar at Oxford University, goes into full gear to financially empower the state’s residents to make informed disciplined choices to achieve their financial goals.

Raimondo’s interest in financial empowerment came from her memories of growing up in a modest-income family, and a house with three kids and her grandfather. “My family had to become very smart about saving and budgeting,” she noted. By financial juggling and hard work, she was able along with her two siblings to attend college. According to Raimndo, getting a good college education allowed her to climb up the career ladder and eventually run for General Treasurer.

Building a Prosperous Financial Future

Recognizing that everyone could use a little free help understanding and managing their finances, last October, Raimondo, in partnership with the Providence-based Capital Good Fund, kicked off their financial empowerment initiative to provide guidance, though the Rhode Island Financial Coaching Corps, to provide free financial help to Rhode Islanders balance their home budgets, managing debt, building up credit and plan for their retirement.

According to Raimondo, becoming financially secure and taking care of your family can become tricky with the huge number of financial products available today. One can become confused with the different types of mortgage and banking products available, especially the proliferation of pay day loans, credit cards and reverse mortgages, she says. “If people are not careful they can be hit hard by hidden fees or hidden risks by choosing the wrong product,” she says.

Recently, Raimondo took her Smart Money Tour out on the road visiting local libraries, farmers markets and senior centers, “right into the community,” she says, noting that it might become a permanent initiative if it proves to be successful. At these locations treasury staff, through an online computer data base, (treasury.ri.gov/unclaimed) also helps people locate their lost or abandoned property for free. Unclaimed property includes items such as long forgotten bank accounts, stocks and dividends and life insurance claims. During the last fiscal year, Treasury returned more than $8 million to over 8,000 Rhode Islanders.

Supporting Common Goals

According to Executive Director Andy Posner, of the Providence-based Capital Good Fund, he met Raimondo during her campaign for Treasurer and found a kindred soul. She had similar interests in bringing financial literacy to Rhode Islanders and a desire to fight predatory practices (pay day loans that have interest rates of 260 percent and rent-to-own centers where consumers ultimately pay more than the product is worth).

Capital Good Fund trains volunteers, for the Empower RI initiative, in financial coaching techniques and provides them with curricula to use either in one-to-one sessions with employees at companies who contract for the service or to those interested in getting help, learning about this assistance at community events or through newspaper coverage or social service agencies.

Since the inception of the program over 200 Rhode Islanders have been helped, says Posner. Currently, the Financial Service Corps, has 17 active volunteers, he added.

Joining the Financial Coaching Corps

Jerry Leveille, a Burrillville resident, jumped at being a volunteer with the Financial Coaching Corps after reading the mission of Empower RI, “Moving Rhode Island forward – one person at a time – through financial empowerment.” The 68-year old retired banker, who served as a senior vice president and lending officer, had worked for over 51 years at Warwick-based Greenwood Credit Union.

Filling out the application at the Capital Good Fund, he was accepted, trained and now has worked with two clients.

In one case, Leveille stated that 83-year-old widow learned the art of balancing her checkbook after the death of her husband, who had managed the family’s household account, paying the bills for over 58 years. The woman still coping with the recent death of her husband only needed a couple of sessions to learn this financial skill.

Meanwhile, Leveille says that a 62-year old woman who worked for a large Rhode Island company for over 30 years made a personal decision to retire. She would later learn that this financial decision would reduce her income by a whopping 40 percent. This was combined with mortgage problems. The single older woman owed more on her family homestead than its market value. She could not get her out of state mortgage company to lower the eight percent interest rate or allow her to extend payments.

Before coming to Leveille “her only choice was to walk away from the mortgage or continue to work,” he said, noting that if this occurred the lender would most likely suffer a $60,000 loss. “As a volunteer I was not going to talk her out of retirement, it was not my role to do this. Ultimately, the Financial Coaching Corps. volunteer would refer his client to Rhode Island Housing who is in the process of negotiating a lower interest rate on her behalf.

“We must be very nonjudgmental when we work with our clients,” says Leveille, noting that humans do make mistakes they regret when making bad financial decisions. “We are there to be helpful. It is what it is and we try to find the appropriate solution,” he says when counseling client.

Cumberland resident, Randy Sacilotto, who serves as Navigant’s vice president of business and community development, joined Raimondo’s effort to ratchet up the state’s financial literacy knowledge. Sacilotto, with 21 years working for the credit union, also brings to his clients the expertise he gained from training to become a certified financial counselor, accredited by the National Credit Union Foundation.

Sacilotto, 52, has met with two individuals and one couple, teaching them how a household budget works and another couple on tips on refinancing their home.

Working on budgeting, Sacilotto told his clients to track the spending of “every penny,” for two to four weeks. Write everything down, he says, because you will learn where your money is spent.

“We don’t always actually know what we spend on things,” he says, and if you track your results, cutting spending on things you don’t need can allow you to put your money into more important things, like saving for a house,” notes Sacilotto.

Finding Satisfaction in Financial Problem Solving

Emerson Gardner, a retired manager of the New York-based Bank of America’s International Banking Office, brought this experience and working in the City’s AARP Money Management Program, to the Ocean State in 2010. Two years later he would join Raimondo’s Financial Coaching Corps.

One of the original volunteers, Gardner is already working on his fifth client (their ages range from early 30s to their 50s). “Any time you help a person get their credit rating up or confront their debt problems it begins with creating a budget,” he says, noting that people need to learn how to live within their incomes.

While Gardner’s clients profit from his expertise gleaned from his banking days and a Masters of Business Administration received from Harvard University, he benefits, too. “I get satisfaction in helping clients solve their problems.” The retiree likes the flexibility of the program, allowing him to decide who to take and when to schedule the counseling session.

“For a person who has financial skills and the time to give because they are retiring, it is a great thing to do,” quips Gardner.

Those interested in volunteering for the Financial Coaching Corps, or meeting with a financial coach should visit http://www.fcCorpss.org.

Pawtucket’s Smart Money Tour is scheduled for August 30, 2013, from 1:00 p.m. to 2:00 p.m. at the City’s Leon Mathieu Senior Center, 420 Main Street, Pawtucket RI.

Herb Weiss, LRI ’12, is a Pawtucket-based write who covers health care, aging and medical issues. He can be reached at hweissri@aol.com