Jewish World Review Oct. 29, 2002 / 25 Mar-Cheshvan, 5761

Jan L. Warner

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Consumer Reports


"Selective austerity" programs: Time to remind the pols why they are in office


http://www.jewishworldreview.com -- We are seeing "selective austerity" programs from Washington and our state capitals that are pushing our health care system to the brink of bankruptcy and placing our elderly and disabled citizens at significant risk. Despite promises of tax cuts, those of us in the private sector will wind up footing the bill through increased health care premiums and higher costs of living. But the problem is not new; it is no longer being addressed.

When Social Security was enacted in 1935, health insurance for seniors was excluded due to opposition from powerful lobbies for the medical community and private health insurance companies. Political pressure kept the door to health coverage for the elderly and disabled closed during the 1940's.

When the number of aging Americans had tripled from 3 million in 1900 to 12 million in 1950, and only one of eight had health coverage, the Social Security Administration finally acknowledged that health care crises would be the major cause of economic dependency in old age.

For the next 13 years, debates about the need to provide older Americans with reliable health care coverage raged while the aging population increased from 12 million to 17.5 million. Not unlike today, the cost of health care was rising much faster than the annual increase in the cost of living and the growth of seniors' incomes. To offset increased costs, health insurance companies were raising premiums and/or reducing benefits, thus making private health insurance either too costly or inadequate for seniors on fixed incomes.

In July 1965, Medicare was established as a national federal insurance program to provide all older adults with comprehensive health care coverage at affordable prices. In 1972, Medicare eligibility was extended to people with disabilities and end-stage renal disease, regardless of age.

Because a health care program with broader eligibility was necessary, Medicaid -- a health benefits program for the needy of all ages - was enacted for those aged, blind, and disabled individuals who were found to be "medically indigent." Unlike the Medicare program that is run by the federal government, Medicaid is administered by the individual states and uses a combination of state and federal funding. Since then, Medicaid has evolved to provide millions of eligible elderly, blind, and disabled Americans with access to much needed health care and prescription drugs.

Today, there are 35 million Americans over age 65, and the numbers are rising at unprecedented rates with more than 76 baby boomers fast approaching that magic number. Americans now have a record high life expectancy of 76.9 years, but at least half are afflicted with some type of chronic illness that accounts for a large portion of our health care spending. The number of Americans without health coverage increased in 2001 and, not unexpectedly, the Medicaid enrollment rate doubled during this same period. And most of the chronically ill Americans who depend on prescription drugs have substantial out-of-pocket expenses not covered by insurance.

At the same time, many seniors and baby-boomer lost 30 percent or more of their worth in the stock market debacle, losses they will not live long enough to recover. This means that growing percentages of our senior and baby boomer populations will outlive their resources and will not be able to depend on a health care system that is quickly drying up because our elected state and federal officials are ignoring the problem and continuing budget cuts. Just what have our elected officials done to deal with these irrefutable problems that face more than one hundred million Americans?

Well, our elected officials in Washington passed landmark estate tax legislation that benefits less than 2% of the more than 2.3 million Americans who die each year - that's right, only 43,000 people. Then they reduced income taxes -- and their counterparts in state capitals reduced both income and sales taxes - which have led to increased federal and state budget shortfalls that, in turn, are leading to even more severe reductions in health-related benefits for sick and disabled seniors and children, our most vulnerable, yet least outspoken, citizens. Because of strong and expensive lobbying efforts, state politicians continue to refuse to consider offsetting these losses by raising cigarette and alcohol taxes.

Think about it! Social Security increased by only 1.4% -- and much of that was offset by the increased cost of Medicare Part B. The cost of Medicare Supplemental insurance for the elderly is increasing while Washington politicians are again hacking Medicare provider rates to the bone. And despite the growing need and growing numbers of needy Americans, most states are looking at ways to reduce Medicaid expenditures by reducing services and limiting eligibility for those in need, particularly in the area of prescription drugs where costs are rising rapidly. Many states want to again reduce reimbursements to doctors, hospitals, and nursing homes. These irresponsible cuts will cause more physicians to turn away sick and disabled patients, nursing homes to reduce staffing, and small hospitals to close. In short, they are reducing accessibility to health care to all of us and rupturing our health care system.

While increased spending for national security and anti-terrorism is understandable, we must take care of our own first. Our elected officials should fully fund Medicare and Medicaid, stop continued governmental waste, stop distributing large sums of money abroad to provide for people who never put one cent into our country at the expense of American citizens, and stop pork barrel spending for pet projects that are not as important as our citizens' health and welfare. Many of our politicians have either forgotten what got them there, don't care, or ignore the problems. These issues must be addressed at the ballot box.



JWR contributor L Jan L. Warner is an elder law attorney and co-author of NextSteps®, a weekly newspaper column that has an Internet presence at www.nextstep.net. Comment by clicking here.

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© 2002, Jan L. Warner