There are several important stories floating around that need to be tied together.
In the end, both will affect everyone in Hawaii, whether it’s now or later. So we’ll tie them together.
First – the Graying of Hawaii. This morning’s paper did a good job of pointing out we’re all getting older. A lot of people are hitting 65 this year or real soon.
From now until the last of the baby boomers reaches age 65 in 19 years, the senior population in Hawaii is going to increase from 15 percent to 23 percent of the total Hawaii population.
This affects a lot of things. Here in Hawaii our culture is to take care of our parents when they longer can care for themselves. This is one of the things that make Hawaii so special. You don’t see the high numbers of elderly struggling to survive as you do on the mainland. But you and they still need help.
As those of you in the boomer age bracket – several things are going to be staring you in the face.
1) Social Security
Let’s tackle these one-by-one:
Social Security is in trouble. As the percentage of older Americans grows, the number of people paying into the system to support it is less. It’s going to go broke. Most estimates say that’s be around 2025 or so. Who really knows?
Something needs to be done but no one wants to touch it.
Social Security is called the “Third Rail“.
Here is how it got that nickname. In places like Washington, DC and New York City, there are subways. The tracks have 3 rails. Two are for the wheels and the third is electrified to provide power to the subway train. A lot of electricity. Touch that rail and you’re dead.
While just about every politician says the system is broken and needs to be fixed. No one wants to touch it or it is political death.
Like it or not, you are going to be part of the system. Something has to be done if you are going to benefit from it.
Item 2 – as we get older, you’ll have more medical problems. It’s part of aging. Medicare is in deep trouble.
A 1997 budget-balancing law required cuts in Medicare. Congress has routinely postponed them on a yearly basis. But these cuts don’t go away; they come back for a bigger bite the next year.
Every time costs went up, Congress hit the override button. Repealing the formula now would cost more than $280 billion over 10 years.
But if not postponed again, cuts of 23-percent in Medicare payments to doctor’s kicks in automatically on December 1st.
The cost of doing business goes up – Medicare payments to your doctor go down. You simply can’t run a business with a negative cash flow. Doctors will be forced to stop taking new Medicare patients.
Let’s note this because it’s important to understand: The cuts have nothing to do with President Barack Obama’s health care overhaul.
Doctors have muddled through with temporary reprieves for years. This time, medical groups say as many as two-thirds of doctors would stop taking new Medicare patients, throwing the health program for 46 million older and disabled people into turmoil just when the first baby boomers will become eligible.
Health care for military service members, families and retirees also would be jeopardized because Tricare payments are tied to Medicare’s.
Let’s chug over to Congress. They opened the last session of the year yesterday. This so-called “Lame Duck” session has that name for a very good reason.
A “lame-duck” session is the last chance for lawmakers who were voted out of office or did not run for reelection earlier this month – to shape policy.
In January 2011, a new Congress will be sworn in, with a smaller Democratic Party majority in the Senate and a new Republican majority in the House of Representatives.
Neither Democrats nor newly empowered Republicans want the sudden cuts, but there’s no consensus on how to stave them off. The debate over high deficits complicates matters, since every penny going to make doctors whole will probably have to come from cuts elsewhere. A reprieve of a few months may be the likeliest outcome. That may not reassure doctors.
So how did this mess start?
There’s widespread recognition that the way Medicare pays doctors is flawed because it rewards sheer volume of services, not quality results. But there’s no agreement on a better way.
The American Medical Association is calling for a 13-month reprieve that would give Congress time to work on a new payment system. The White House supports the idea.
The AMA and Obama would settle for adding the cost to the deficit. Most Republicans and many conservative Democrats want it paid for.
The newly elected Republican majority – which doesn’t take office until after the session is over – doesn’t want to be responsible for something they didn’t vote for. There’s nothing they can do.
Wrapping it up.
Why should you care? Your parents may be in the Social Security/Medicare system. If they aren’t, they will be. And so will you.
You may have insurance now and it may be part of your retirement.
Here’s how the state’s retirement system looks at your medical insurance. The state pays until you hit 65. Then you MUST sign up for Medicare and you pay the monthly premiums. The state retirement reimburses you quarterly. Medicare pays your medical bills with the state covering part of the co-pay. Medicare becomes your Primary insurance with EUTF as secondary. If doctors cut back on new Medicare patients – guess what happens to you.
You should care about this.
We’re not advocating any remedy, we’re advocating “something” be done before everything goes broke and you end up looking for a free clinic to get that mole fixed.