In an effort to recapture the attention and enthusiasm of Republicans, Gov. Christie today in a speech in New Hampshire proposed substantial changes to Social Security, Medicare, and Medicaid. What he calls “entitlement reform” may appear as bold and appealing to conservative primary voters, but the plan is cynical, crafty, unnecessary and contrary to what is needed. It may stimulate discussion, it may backfire on him, or as a third-tier candidate it may not survive many news cycles, but it’s not a sensible plan.
Christie’s plan is cynical as it disregards the needs of less wealthy ageing Americans who would have to wait longer for Social Security and Medicare. Daniel Kurz, who has blogged on Blue Jersey, expresses his outrage on Facebook: “I guess people in their 60’s never get seriously ill in large numbers and can, for the most part, continue to sell their physical labor and compete with 26 year olds. The message from the NJ governor is clear: if you’re 67, and you’re chronically unemployed, and you have been paying into Social Security for four decades, then do us all a favor and drop dead.”
Christie’s plan is crafty because it has no immediate impact, delays the start date and is implemented gradually. Even Tea Party, Evangelical, and fiscally conservative Republicans are on these plans or hope to be. It starts raising the retirement age to 69 (from 67) in 2022 and then only by two months each year until it reaches 69 in 2044. For Medicare it raises eligibility age at a pace of one month per year, so that by 2064 it would be 69. As Christie explains, “The changes I propose today would not affect seniors currently in these programs or seniors approaching retirement, so let me repeat that, before they start running these pushing granny in the wheel chair off the cliff ads.” He got a few laughs from this ugly remark, and maybe a few sighs of relief.
Christie’s plan is unnecessary because neither Social Security nor Medicare are in such dire straits as was once believed. In their 2014 report The trustees project that the combined trust fund asset for Social Security and its related disability program reserves at the beginning of each year will exceed that year’s projected cost through 2027. For Medicare Hospital Insurance (Part A) Trust Fund revenue will be positive through 2020 and then will have sufficient funds to pay 85% of costs through 2027. (ACA may have a more favorable impact by then.) The Trustees project that Part B of Supplementary Medical Insurance (SMI), which pays doctors’ bills and other outpatient expenses, and Part D of SMI, which provides access to prescription drug coverage, will remain adequately financed into the indefinite future.
“Many and arguably most working Americans are saving much too little for their retirement. They’re also investing these savings badly. Social Security is simple and clean, with low operating costs and minimal bureaucracy. It provides older Americans who worked hard all their lives with a chance of living decently in retirement, without requiring that they show an inhuman ability to think decades ahead and be investment whizzes as well. So why not make it bigger?”
Likewise the same argument pertains to Medicare which operates at a low cost and is the ideal vehicle upon which to expand American health care. Christie also called for phasing out Social Security retirement payments to those with more than $200,000 a year in other retirement income, which would not be a big hardship for them but which they would dislike. Instead why not increase the upper limit of income on which one pays into the plan in order to generate more revenue and reduce income inequality?
Christie’s plan for Medicaid is for the federal government to send the states a fixed amount per enrollee. He calls for requiring co-pays. It would save the states money, but it’s unclear that it would provide the same or better quality of health care. One of the problems with Medicaid now is the high expense incurred by use of emergency rooms, but ACA is working to funnel patients away from unnecessary emergency room usage toward preventive care and direct access to physicians.