August 20, 2009

• Healthcare Reform Update
• Income Gap Widening Due to Rising Healthcare Costs
• Fewer People Believe They Have Saved Enough To Cover Medical Expenses in Retirement
• Protect Your Online Privacy
• AFT+ Long-Term Care Insurance: Security for You and Your Family
• Quote of Note: AFT on a Public Option in Healthcare Reform
• Web Sites of the Week

HEALTHCARE REFORM UPDATE

What’s in It for Older Americans:

• Helps early retirees (55 to 64) buy coverage. (Senate Health Education, Labor and Pension Committee (HELP) bill/House bill)
• Phases out the Medicare Part D “donut hole” (House bill) forcing about one in four seniors to spend several months each year paying full price for their prescriptions while still having to pay their premiums. Last year, an estimated 3.4 million of the 24 million Part D enrollees paid $4,050 in out-of-pocket expenses before Medicare kicked back in and provided catastrophic care coverage, paying 95 percent of those prescription costs.
• Makes long-term care affordable through a public insurance plan. (Senate HELP bill)
• Continues tax policies that encourage employers to provide retiree health benefits. (House bill)
• Ends co-payments for Medicare preventive services. (House Bill/Senate HELP bill)
• Creates a “public plan” option that provides affordable coverage and puts healthy pressure on private insurance companies to keep their premiums and business practices in check. (House bill/Senate HELP bill)

AFL-CIO Mobilizes for August Recess: The AFL-CIO has launched a 30-day healthcare mobilization effort during the August congressional recess that it says is the largest grass-roots campaign in its history. On July 28, the AFL-CIO and Healthcare for America NOW held a national call-in day, in which some 30,000 union members logged about 72,000 phone calls, e-mails, and personal letters to U.S. senators and members of the House in support of healthcare. Also in July, 7,500 union members blanketed the halls of Congress in a massive one-day lobbying effort. The AFL-CIO mobilization effort includes:

• Election-style local union communications with members at home and at work.
• Meetings with congressional members on issues such as requiring that all employers “pay” or “play” in a public health insurance plan to compete with private insurers.
• AFL-CIO affiliate Working America canvassers in “high-priority states” expected to generate some 3,000 handwritten letters to send to Congress.
• The Alliance for Retired Americans’ 200 events, including Medicare birthday parties, press conferences and town hall meetings.

About Those “Death Panels”: The House of Representatives bill (H.R. 3200) would offer Medicare coverage for the cost of patients who voluntarily wish to speak with their doctors about their values and preferences for end-of-life care. These are deeply personal and completely voluntary decisions made by patients in consultation with their doctors. No one would be required to have such a discussion. Since the 1990s, both Republicans and Democrats have supported such coverage. Due to the controversy created by healthcare reform opponents, the Senate bill is not likely to offer this option.

Hired Guns at Town Halls? Although town hall meetings are intended for constituents of congressional members' districts, many attendees seem to have come from farther away. According to the Huffington Post Web site, sign-in sheets are increasingly lending credence to the accusation that the protests at town hall meetings this August recess have been the product of Washington-based "Astroturf" organizations (bogus grass-roots groups organized by paid outsiders), rather than evidence of a groundswell of popular resistance to healthcare reform. An Alliance for Retired Americans member at one town hall reported that while she was in line, she talked to the person behind her, who said that their group had been bussed in from a surrounding state, fed lunch, given a T-shirt and script and paid $100 to be at the town hall.

Now It’s Mom and Pop Shops: House Republicans are preparing for September and planning to depict Democratic attempts to reform the healthcare system as ruinous to small businesses. The GOP argues that House Democratic leaders' call for a surtax on individuals with adjusted gross incomes of more than $250,000 would hurt small-business owners. Each of the current draft bills provides significant tax credits to small firms that either continue to provide health insurance to their employees or begin doing so for the first time. For example, the House bill would allow firms with fewer than 25 employees and with an average annual wage of less than $40,000 to receive a credit. The credit would be greatest for firms with fewer than 10 employees whose average annual salary is less than $20,000, with the credit equal to half of the firm’s contribution for health insurance.

Employer Costs for Health Benefits More than Doubles: According to Sylvester Schieber, chair of the Social Security Board, a median-wage full-time worker's health benefit costs were 4.6 percent of compensation in 1980. By 2007, the percentage was 10 percent.

Medicare Premiums Likely To Rise Slightly: The Centers for Medicare & Medicaid Services said this week that the average monthly premium for a standard Part D drug plan will increase by $2 to $30, or seven percent. That's less than the 12 percent increase between 2008 and 2009.

If Reform Fails: In a report issued in June 2009, the Council of Economic Advisors said that without healthcare reform, overall healthcare expenditures would likely rise from their current level of 18 percent of GDP to 28 percent in 2030 and 34 percent in 2040. Wages would stagnate as healthcare costs eat up a larger share of income, and the number of uninsured people in the U.S. would rise from 46 million in 2007 to 72 million in 2040.

INCOME GAP WIDENING DUE TO RISING HEALTHCARE COSTS
Rising health insurance premiums are responsible for an unequal share of the lowest-paid workers' total compensation compared with higher-income workers, which has contributed to income disparity in the U.S., according to an article published this spring by the McKinsey Global Institute, the economic research arm of the internationally known consulting firm. McKinsey researchers Byron Auguste, Martha Laboissière and Lenny Mendonca, state that the portion of employer-paid health premiums of total compensation was 20 percent for insured people in the lowest-income group, whose income was $14,800 annually on average. Just 22 percent of the lowest-income group had coverage. The portion of employer-paid premiums to total compensation for the highest-income group, which averaged $210,000 annually, was 3.3 percent. Nine out of 10 people in this group were insured. As the salaries of the highest earners increased over the years, their health benefits and types of services covered increased as well, meaning they paid very little out-of-pocket for healthcare, the report found. A similar trend was seen among the higher- and middle-income groups, but the rate of growth was slightly slower, meaning their out-of-pocket costs increased slightly. In the lowest-earning group, however, incomes have been stagnant, and their employers are less likely to pay for their health insurance, making finding any healthcare difficult, if not impossible, to afford. The researchers found that from 1966 to 2005, health insurance premiums grew by 5 percent annually, doubling every 14 years. As premiums have increased, enrollment in employer-sponsored plans has dropped or remained unchanged, particularly among the middle class. Employers are spending more on healthcare per employee but covering fewer employees.

FEWER PEOPLE BELIEVE THEY HAVE SAVED ENOUGH TO COVER MEDICAL EXPENSES IN RETIREMENT
Twenty-five percent of U.S. retirees say they are very confident that they have saved enough money to pay for medical expenses during their retirement, compared with 41 percent in 2007, according to the Employee Benefit Research Institute's annual survey of 1,257 U.S. residents. Overall, 13 percent of respondents said they are very confident that they will have enough money to live comfortably in retirement—a 14 percentage point drop from 2007 and the lowest-reported confidence level since EBRI began conducting the annual survey in 1993. Twenty percent of current retirees say they are very confident that they would remain financially secure during retirement, a 41 percent decline from 2007. Workers cited the economy, inflation and high cost of living as reasons for the drop in confidence. Many workers also said they expect to delay retirement or would look for additional work after they retire from their current jobs. Jack VanDerhei, a survey co-author and research director at EBRI, said that 49 percent of people ages 55 and older have saved less than $50,000 for retirement and could face a much lower standard of living in retirement than they had anticipated.

PROTECT YOUR ONLINE PRIVACY
Here’s some advice from Snopes.com, online debunker of urban legends, on protecting your e-mail address. Any time you see an e-mail that says forward this on to "10" of your friends, or sign this petition, or you'll get bad luck, good luck, or whatever, it almost always has an e-mail tracker program attached that tracks the e-mails of those folks to whom you have forwarded it. The host sender is getting a copy each time it gets forwarded and then is able to get lists of "active" e-mails to use in SPAM e-mails, or sell to other spammers.

AFT+ LONG-TERM CARE INSURANCE: SECURITY FOR YOU AND YOUR FAMILY
Chances are that you or someone you love will need nursing home or in-home care someday. With costs on the rise, this kind of care can diminish a lifetime of savings. Long-term care insurance helps protect your financial independence and your dignity by giving you the freedom of choice to receive care in your own home, if medically appropriate, or at a facility you select. Plan today so that you can be better prepared to spend tomorrow on your own terms. For more information, click here or call toll-free 866/253-1334.

QUOTE OF NOTE: AFT ON A PUBLIC OPTION IN HEALTHCARE REFORM

“Healthcare reform must include a public option that provides the real competition needed to help control spiraling costs. Absent such cost containment, we will continue down a road in which high-quality healthcare is further out of reach for many Americans and in which everyone is adversely affected by the drain on our economy. Healthcare reform needs to happen now, and it needs to take place in an atmosphere that allows for real discussion based on the facts about what is being proposed. An issue of this importance deserves nothing less. The American Federation of Teachers will continue to support a comprehensive reform bill that makes quality healthcare accessible and affordable for all.”

Randi Weingarten, President
American Federation of Teachers
Aug. 19, 2009

WEB SITES OF THE WEEK:
http://www.whitehouse.gov/realitycheck and www.politifact.com

With misinformation and disinformation about health reform flying fast and furious, the White House has launched a myth-busting Web site on healthcare reform. You can check the claims of both sides at the St. Petersburg Times’ Pulitzer Prize-winning site.

Contributors and sources: Bill Cunningham, Lauren Luchi, Sam Trivette, Washington Post, Wall Street Journal, Lawrence Journal World & News, CQ Politics, BNA Healthcare Daily Report, Alliance for Retired Americans Friday Alert, Kaiser Health Policy Report. Frank Stella, editor; Mary Boyd, copy editor; Janelle Bowe, design.