Three issues for advocacy

Three things you need to know about aging issues this week.

First, Senator Bernie Sanders, I-Vermont, has proposed raising the cap on the amount of earnings subject to Social Security Payroll tax withholding. “If we apply the Social Security payroll tax to income above $250,000, we could immediately bring in enough revenue to the Social Security trust fund to extend it for decades and also be able to increase benefits,” he says. Currently the cap is wage income of $118,500. And it does seem unfair that middle class and lower class folks have to pay on ALL of their income while upper class folks only pay on a small portion of their income. It makes a certain sense although those paying these higher payroll taxes on their wages would not, under the current system, recoup much from changed Social Security benefits. Thus Social Security would be of even less benefit to those in the upper middle class and above. Wouldn’t you think this politically powerful group would then work to change Social Security into a means-tested program or even eliminate it? Still….

Second, Administration for Community Living issued the ‘final rule’ for the Long-Term Care Ombudsman Programs in the Federal Register. They have been working on this for years (actually, since 1975 when the program was first authorized in the Older Americans Act – 40 years or so should be perfect don’t you think?). Each state operates its ombudsman program a little differently and there is a beauty in diversity, but some consistency of approach is also helpful. After years of working with the states and other interested partners, official guidance is now available on how to operate a Long-Term Care (LTC) Ombudsman program. With the quality of Long Term Support Services still needing improvement, the demand for good LTC ombudsman can only increase. These programs are always looking for volunteers.

Third, the Senate Committee on Aging released a report on increasing the use of generics in Medicare Part D. You would think this would be a no-brainer that both parties could get behind. The Medicare Part D drug plans could do more to promote the use of generics; maybe some incentives are in order. But Medicare beneficiaries need education too so that they understand the safety and cost savings of using generic drugs. We probably need some ads on the History Channel and the Hallmark channel to counter the constant drug company ads. Oh, and then there’s the prescribers. But that’s a whole other post.

That’s it. Pick an issue. Do some advocacy!

Note to Candidates: Easy Fix to Social Security

If only it was a matter of rational thinking, we could fix Social Security easily. We all want Social Security to continue. Well, most of us do.

Political party dogma gets in the way. Even Republican primary voters oppose cuts to Social Security and Medicare as a way to control the budget ( Eric Cantor, the House Republican leader, can’t explain why the candidates and leaders of the party are so out of tune with the majority of Republican voters (

Ron Paul, putting on his Herbert Hoover hat, thinks the program should never have been put in place and should be eliminated. Rick Santorum wants immediate cuts. Even President Obama is on a dangerous path by temporarily foregoing Social Security payroll contributions to stimulate individual spending.

Once the Republican nominee is established we’ll see some attention to Social Security in the election of 2012. My bet is that both parties will call for reform and neither will provide details.

So let’s at least set the record straight. There are a series of steps that, taken together, would go a long way to solve the long-term solvency issues for Social Security. These would be easy to accomplish and pretty painless.

1. Raise the amount of the Social Security contribution from 12.4% to 13.4%. A 1% increase for the typical worker would mean $4 more per week from worker and employer.

2. Gradually raise the full retirement age to 70. This would be phased in with workers born after 1964. Early retirement at 62 would still be allowed, with benefits reduced more severely than at present.

3. Increase the wage limit subject to Social Security from its current level, plus adjust this upwards annually based on the general rise in wages.

4. Expand the range of years considered when computing Social Security benefits. The effect would be to slightly reduce benefits.

5. The Disability component of Social Security has the most dire solvency problems. A number of reforms have been proposed, but the program should more fully focus on the goal of getting disability claimants and recipients back to work.

Do you want to address the Social Security issues? Here’s a fun website from the American Association of Actuaries to help you play the game:

We can solve the Social Security solvency issue with very modest changes. I doubt whether any variation of this path will be taken. The rhetoric will be more about values; we will debate how much government should assist older persons in their retirement. In 1935, our society said yes. What will be the answer in the coming years?