Never mind what the political pundits are saying about who “won” or “lost” last night’s presidential debate. What really matters for people in their 50s and 60s is what President Barack Obama and the Republican candidate, Gov. Mitt Romney, said (or didn’t say) about Social Security, Medicare and Medicaid. Next Avenue’s translations:
What it is: The federal government’s program providing retirement benefits, of course.
What Obama said: “You don’t need a major structural change in order to make sure that Social Security is there for the future.” In effect, he didn’t draw any significant distinction between himself and Romney.
What Romney said: “Neither the president nor I are proposing any changes for any current retirees or near retirees, either to Social Security or Medicare. So if you're 60 or around 60 or older, you don't need to listen any further.”
Translation: By generally avoiding the subject of Social Security, the president appears to be laying the groundwork for a possible post-election “grand bargain” with Congress to keep Social Security solvent. One idea under discussion in Washington is to change the way Social Security’s annual cost-of-living benefits are calculated as a way of saving the program money. Some economists say that could eventually cut annual Social Security benefits by as much as $1,000 for people over age 85.
(MORE: The Security of Future Retirement Benefits: 5 Questions for Obama and Romney)
Neither candidate addressed whether or when the Social Security retirement age should be raised. In the past, Romney has suggested increasing the age — which is scheduled to go to 67 for anyone currently 52 or younger — for future beneficiaries. Since Obama didn’t address the issue, it’s unclear whether he thinks raising Social Security’s retirement age would be a “major structural change” that he would oppose.
What it is: The federal health program for Americans 65 and older.
What Romney said: As a result of Obamacare, "if the president were to be re-elected, you're going to see a $716 billion cut to Medicare," “4 million people will lose Medicare Advantage” (the private health insurance plans for people 65 and older, used by about 25 percent of Medicare recipients) and “you'll have hospitals and providers that'll no longer accept Medicare patients.”
In explaining his proposal to let private insurers compete with Medicare, Romney said: “I'd just as soon not have the government telling me what kind of health care I get. I'd rather be able to have an insurance company. If I don't like them, I can get rid of them and find a different insurance company. But people will make their own choice.”
For future Medicare enrollees, Romney said, “we have to have the benefits high for those that are low-income, but for higher-income people, we're going to have to lower some of the benefits.”
What Obama said: The law saved Medicare $716 billion “by no longer overpaying insurance companies” and, consequently, “we were actually able to lower prescription drug costs for seniors by an average of $600” while providing “the kind of preventive care that will ultimately save money."
Arguing against Romney’s proposal for private alternatives to Medicare (called “premium supports” by Republicans and “vouchers” by Democrats), Obama said, “Those insurance companies are pretty clever at figuring out who are the younger and healthier seniors.” He added, “Every health care economist who looks at it says over time what'll happen is the traditional Medicare system will collapse.”
Translation, if you are in Medicare now: It’s true that Obamacare would cut reimbursements to Medicare Advantage plans (also known as Medicare Part C programs), which are usually HMOs with networks of specific doctors and hospitals. And when the plans get less money, they may withdraw from certain markets. Whether 4 million people will actually lose their Medicare Advantage plans is unclear.
It's also uncertain that many hospitals and doctors will turn away Medicare patients under Obamacare. Surveys have shown that more than 90 percent of people on Medicare say they’ve had no problem finding a doctor.
As a result of Obamacare, Medicare beneficiaries are now covered for an annual wellness exam. The law has also begun lowering the cost of prescription drugs, due to the gradual closing of what’s known as the “doughnut hole” (the gap in prescription medication costs not covered by Medicare, between $2,930 and $4,700 ), which has saved beneficiaries an average of $600 a year, according to the Department of Health and Human Services.
Romney has not said whether he would end these provisions if he and Congress rewrite the health-reform law.
Translation, if you are under 55: Under Romney’s approach, which would restrict the government's contribution to Medicare, people currently 55 or younger who reach 65 would pay more of the program’s costs.
Romney’s proposal to change Medicare coverage based on a beneficary’s income would be a dramatic shift. Today, all Medicare beneficiaries are entitled to the same benefits; your income doesn't affect the cost of an X-ray or hip replacement. Romney hasn’t spelled out whose benefits would be reduced due to their income or which benefits they’d see trimmed.
What it is: The federal-state health program for the poor and disabled that, among other things, pays nursing home bills for low-income Americans.
What Romney said: “I would like to take the Medicaid dollars that go to states and say to a state, 'You're going to get what you got last year plus inflation — inflation — plus 1 percent. And then you're going to manage your care for your poor in the way you think best.'”
What Obama said: “Governor Romney talked about Medicaid and how we could send it back to the states, but effectively this means a 30 percent cut in the primary program for seniors we help who are in nursing homes. …”
Translation: Federal law now requires that all states cover nursing home care for the poor in return for receiving federal Medicaid dollars. If Romney’s plan took effect, a state could theoretically decide to eliminate or reduce its nursing home coverage. Since nursing home care costs roughly $70,000 a year, on average, this could become a financial burden for some of America’s impoverished elderly population, especially people 85 and older — 40 percent of them are in institutional care.