SLIDE 1
National Retirees Legislative Network
NRLN Villages Chapter Meeting - February 23, 2017
Welcome Chapter Members – Debbie Austin Opening Comments – Bill Kadereit NRLN Website and Communications Tools – Ed Beltram Prescription Drugs Price Gouging – Ed Beltram Pensions, Social Security, Medicare & Other Issues – Bill Kadereit Discussion – Growing the Chapter – Debbie Austin
SLIDE 2 What is the National Retiree Legislative Network (NRLN)?
Non-Partisan Retiree Advocacy and Lobby Network Headquarters in Washington D.C. Contributions are not tax-deductible. Members ired from over 200 U.S. Companies, reside in all 50 states CD leader teams in 75% of the 435 CD’s. Executive Director and strategic advisor work on the Hill in Washington D.C. and h formed alliances with other advocacy organization's there.
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The NRLN’s mission and focus is to serve retirees only and only on matters of income and healthcare security through use of objective whitepapers. The NRLN has linked grassroots advocacy and lobby effort for over 15 years. Over 70% of NRLN revenue comes from individual contributors. NRLN helped form the American Retiree Education Foundation (AREF) in 2015. The AREF conducts research and does advocacy work for retirees, and sponsors conferences and joint research. Donations are tax-deductible.
SLIDE 3
2017 - What to Expect – A new President and His Congress The 1st 100 days – Executive Branch Regulatory Changes and Federal Agency Staffing - Execute as Promised. Then Conflict and Confusion as Legislative Branch sets the pace – The ACA Challenge -Tax Reform – Will Middle income lose (RE tax deduction bracket losses), Medicare dilemma). Then Budget Surprises and Conflict – House Legislative Push Medicare Preservation Tested by Privatization Zeal Massive Federal Subsidies Needed to Keep Insurers in. Maybe Social Security Saber Rattling
SLIDE 4 Prescription Drugs Price Gouging A Few Facts
- Total prescription drugs spending in U.S. reached $424.8 billion in 2015 (2016 number not yet available), an
increase of 12.2 percent from 2014.
- Medicare Part D spent $137.4 billion on prescription drugs in 2015, up from $121.5 billion in 2014.
- Medicare Part B spent $24.6 billion on prescription drugs in 2015, up from $21.5 billion in 2014.
- Average annual growth rate in total Medicare spending on prescription drugs was 4.4% between 2010 and
2015.
- Unless Medicare is allowed to do competitive bidding on drug prices, it is projected the annual growth rate in
spending will be 7.1% between 2015 and 2025.
SLIDE 5 Prescription Drugs Price Gouging What the NRLN is Advocating
- Congress remove prohibition on Medicare competitive bidding. Replace it with a competitive bidding
mandate applied wherever two or more FDA approved generic drugs, or two or more brand drugs, or a generic and brand drugs (upon patent expiration) treat the same medical condition.
- Import safe, lower priced prescription drugs from Canada and other countries that meet the FDA’s quality
standards.
- Why shouldn’t Americans have the benefit of lower price imported prescription drugs when over 90% of
the active ingredients used in antibiotics, diabetes, and other prescription brand and generic drugs sold in USA are manufactured in China and India.
SLIDE 6 Prescription Drugs Price Gouging What the NRLN is Advocating
- Petition signed by 5,824 NRLN Members sent to President Donald Trump requesting he add
two campaign promises to First 100-Days Action Plan:
- Allow Medicare to negotiate prices with drug companies, and
- Allow safe, cheaper pharmaceutical drugs manufactured abroad to be sold in the U.S.
- Pointed out that Congress passed the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 and it became Public Law 108-173 in December 2003.
- Under TITLE XI - Subtitle C - Importation of Prescription Drugs, Sec. 1121 gave authority
to the Secretary of Health and Human Services to import prescription drugs from Canada into the United States. But, no HHS Secretary so far and exercised that authority.
- Having HHS Secretary Tom Price exercise this authority, would be a good start for the
importation of prescription drugs manufactured abroad.
- NRLN letter sent to HHS Secretary Tom Price urging him to use authority he has to create
regulations to import Rx from Canada for personal use.
SLIDE 7 Prescription Drugs Price Gouging What the NRLN is Advocating
- Socialized medicine countries exact low prices demanding below market pricing from USA
pharmaceutical manufacturers.
- There are two counter measures to USA manufactures being forced to take losses:
- A. Pharma companies should exit these markets, thus protecting Americans and our economy from
subsidizing socialized medicine.
- B. To the extent pharma and Congress don’t eliminate this unethical practice of absorption and passing of
losses on to Americans and the U.S. economy, Congress must pass laws allowing importation of safe, and lower priced prescription drugs from Canada and elsewhere so that Americans and our economy benefit. Start with Canada NOW.
SLIDE 8
Prescription Drugs Price Gouging Examples of Lower Drug Costs from Canada
Drug Use USA Canada Less Lower Jevtana Prostate Cancer $8,659 $4,618 $4,041 47% TysAbri Multiple Sclerosis $4,842 $2,573 $2,269 47% Rituxan/Mab Thera Rheumatoid Arthritis $3,678 $1,820 $1,858 51% Cimzia Crohn’s Disease $2,357 $1,058 $1,299 55% Eylea Macular Degeneration $1,930 $1,129 $ 801 42% Lucentis Macular Degeneration $1,936 $1,254 $ 682 35% Halaven Breast Cancer $1,003 $ 389 $ 614 61% Abraxane Cancer $ 968 $ 426 $ 542 56% Orencia Rheumatoid Arthritis $ 881 $ 390 $ 491 56% Herceptin Breast Cancer $ 858 $ 493 $ 365 43% Xolair Asthma $ 852 $ 487 $ 365 43% Erbitux Colorectal Cancer $ 527 $ 278 $ 249 47%
SLIDE 9 Prescription Drugs Price Gouging Rx Bills NRLN is Advocating
- S. 92, Safe and Affordable Drugs from Canada Act of 2017, introduced by Senator John McCain
(AZ) would require the FDA to establish a personal importation program to allow individuals to import a 90-day supply of prescription drugs from an approved Canadian pharmacy.
- S. 41 and H.R. 242, Medicare Prescription Drug Price Negotiation Act of 2017, introduced by
Senator Amy Klobuchar (MN) and Rep. Peter Welch (VT) to allow Medicare to negotiate the best possible price of prescription drugs.
- S. 124, Preserve Access to Affordable Generics Act of 2017, introduced by Senator Amy
Klobuchar (MN) with Senator Chuck Grassley (IA) to expand consumers’ access to the cost-saving generic drugs and increase competition between drug manufacturers to end “pay for delay” deals—the practice of brand-name drug manufacturers using anti-competitive pay-off agreements to keep more affordable generic equivalents off the market. NRLN is working to gain companion bills in House to S. 92 and S. 124.
SLIDE 10
NRLN Legislative Agenda – 2017
Funding of Defined Pension Plans - Company, State plans Plan Derisking and Voluntary Terminations Bankruptcy Protection - Underfunded Terminated Plans Social Security Next Generation Savings and Income Security Risk Prescription Drug Importation and Competitive Bidding Medicare ACA Repeal and Replacement Risks
SLIDE 11
SEVEN(7) CHANGES TO SOCIAL SECURITY IN 2017 1 - COLA (SSA’s press release) to be .3% or ~ $4.05 / Month 2 - Taxable Earnings increase from $118,000 to $127,000 3 - Max monthly benefit up $48 / month but some will be taxed 4 - Earnings needed to earn 1 Soc. Sec. work credit increases by $40 (to $1,300). Can earn 4/yr. max, need 40 credits to qualify. 5 - Applicants born after 1955 must be 66 and 2 months to be eligible for full benefit. Add 2 mo./yr. if born after 1960 – age 67 6 - Early filers who reach Full Retirement Age (FRA) in 2017 can earn $44,880 (+$3,000) before facing the withholding threshold. 7 - Minimum earnings needed to qualify for SS disability benefits increases by $40 & $130/mo. for non-blind & blind applicants.
SLIDE 12 University of Maryland Social Security Survey, Motley Fool Study and NRLN Member Survey VS NRLN 2016 Proposals. Solution
Major Social Security Reform Proposals Under Consideration. Motley Fool Research Statistics Published Jan 1, 2016 University of Maryland Program for Public Consultation - 8,697 Ten-State Simulation Study and Survey. NRLN Oct. 2016, 700+ Responses to University of Maryland Study NRLN Current (2016) Whitepaper Proposal
1
Raising the cap on income subject to the payroll from the current $118,000 to $215,000. 80% Support eliminate cap over 10 yrs. Reduces shortfall 71%. 88% support (84% of Rep.- 92 % of Dems.). ~ 40 % support, many wanted higher cap. 2016 - increase cap to $250,000. 2017 – increase cap to $250,000 & Increase Payroll tax by 1.5%.
1a
Eliminate the cap on taxable earnings entirely OR increase cap to 90% of earnings
shortfall 30%. 59% support (Party split not available). 20-25% support, many want a $250,000 cap. 2016 - increase cap to $250,000. 2017 – increase cap to $250,000 & Increase Payroll tax by 1.5%.
2
Raising the payroll tax from 6.2% to 6.6%. 83% support 7.2% in 2022 & 8.2% in
shortfall by 77%. 66% support (72% of
Over 66% support this but many didn't understand the impact of a 1% tax change. 2016 – increase payroll tax .5-1.5% with a sunset provision. 2017
1.5% with a sunset provision.
SLIDE 13 University of Maryland Social Security Survey, Motley Fool Study and NRLN Member Survey VS NRLN 2016 Proposals.
Solution
Social Security Reform Proposals Under Consideration. Motley Fool Research Statistics Published Jan 1, 2016 University of Maryland Study
Simulation Study and Survey. NRLN Oct. 2016, 700+ Responses to University of Maryland Study NRLN Current (2016) Whitepaper Proposal
3
Reduce benefits for the top 25% of lifetime earners (means testing). Extremely unpopular (means testing). Reduces shortfall by 20%. 76 % support (72%
Many said only top 10% (protect those in middle–income) . Data confusing? 2016 – oppose; Social Security benefits are
Change
4
Gradually raise the retirement age to 68 years old. Ryan wants 69. Extremely unpopular (no jobs /no income) Reduces shortfall by 15%. 79 % support (81% of Reps - 78 % of Dems.) 15% support, said most over 65 are physically unable to earn income or are disabled. 2016 – oppose; would cause 20% benefit
unable to work. 2017 - no Change.
5
COLA - Change CPI-W (Urban Wage Earners &
Clerical Workers) to CPI-
C (chained index) No support (not justifiable). Reduces shortfall by 20%. Not Included Not Included 2016 – keep CPI-W, but prefer CPI-E (Elderly, healthcare weighted). 2017 - no Change.
6
Payroll tax revenue must be held in trust and no longer be use as general revenue. Not Included Not Included Not Included 2016 – Hold in trust, investment board to manage assets. 2017 – no change.
SLIDE 14 2010 2015 2020 2025 2030 2035 2040 2045 2050 % BB of Pop. 26% 24% 22% 20% 17% 14% 11% 7% 4% % Annual Pop. Incr. 0.0% 4.9% 4.9% 4.7% 4.5% 4.3% 4.1% 4.0% 4.0% % BB over 65 34% 59% 77% 88% 61% 53% 36% 21% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
NRLN Analysis of Baby Boomer (BB) Impact on Social
Security and Medicare. Source: 2000 Census Data - February 2017
SLIDE 15 NRLN PROPOSED SOCIAL SECURITY CHANGES - 2017
Leading Reform Subject Debated Positions Taken 1 Payroll Income Cap 80% - Support 10 yr. Phase out – Saves 71% 88% - Raise cap to $250,000 plus Increase Tax 59% - Raise Cap to 90% of Earnings
NRLN Position Proposed - Raise Cap to $250,000, then Phase out if needed. 2 Raise Payroll Tax Rate 66% - Support raising from 6.2% to 6.6% - Raise to 7.2% in 2022 & 8.2% in 2052 – Saves 77% NRLN Position Proposed - Raise payroll tax 1.5% to 7.7% ASAP NRLN Position (1&2)
- Sunset Rule – adjust cap & tax if actuarially funded
SLIDE 16
NRLN PROPOSED SOCIAL SECURITY CHANGES - 2017
Leading Reform Subject Debated Positions Taken 3 Reduce Benefits for Motley Rejects; MD Supports; - Saves 20% Top 25%-Means Testing NRLN Survey- Top 10% - exclude middle income NRLN Position Proposed No means testing – Soc. Sec. benefits are earned 4 Raise Retirement Age 79% in MD study support – Saves 15% 15% NRLN survey – old & disabled don’t work NRLN Position Proposed Leave at age 67 - raising reduces benefits by 20%
SLIDE 17
NRLN PROPOSED SOCIAL SECURITY CHANGES - 2017
Leading Reform Subject Debated Positions Taken 5 COLA – From CPI-W to Little Support, not justifiable - Saves 20% CPI – C (chained) NRLN Position Proposed Use CP-E (elderly) or no change 6 Hold Soc. Sec. Assets in Trust Stop spending payroll taxes revenue NRLN Position Proposed Hold assets in trust and manage professionally as a reserve.
SLIDE 18
2017 ACA Repeal Affect on Medicare
Sources: Congressional Budget Office (CBO) report 50252, kff issue briefs, MedPac
CBO says: Would add $802 billion Medicare Costs 2016–2025 Part B Preventative Services added by ACA would be lost 14% Subsides Paid to Medicare Advantage Plans would add back Medicare D spending to offset copay gap would decrease However, Part D premiums could be lower .9% Medicare A payroll tax on earnings > $200,000 would be lost Budget that support HHS Innovation Center would be lost Assertion is ACA slowed Spending/Beneficiary – could be lost
SLIDE 19 2010 2015 2020 2025 2030 2035 2040 2045 2050 % BB of Pop. 26% 24% 22% 20% 17% 14% 11% 7% 4% % Annual Pop. Incr. 0.0% 4.9% 4.9% 4.7% 4.5% 4.3% 4.1% 4.0% 4.0% % BB over 65 34% 59% 77% 88% 61% 53% 36% 21% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
NRLN Analysis of Baby Boomer (BB) Impact on Social Security and Medicare. Source: 2000 Census Data - February 2017
SLIDE 20
MEDICARE IS AT RISK !
Source: CBO March 2016 Updated Budget Projections for 2016 – 2026 Medicare 2015 Benefit Payments = $632 billion = 100% Medicare Advantage Private Health Plans = 27% (31% of Enrollees) Hospital Inpatient Services, Medicare A = 23% Prescription Drugs, Medicare D = 12% Physician Services, Medicare B = 11% Services 13%, Home Health 3%, Skilled Nursing 5%, Outpatient 7% Average Annual Medicare Spending Growth 2010-2015 (5 yrs. actual) = 4.4% 2015-2025 (10 yrs. projected) = 7.1% 3.2 % GDP in 2016, to 3.9% in 2026, 5.0% in 2036, to 5.7% in 2046. Medicare Funding – General Revenue 42%, Payroll Tax 27%, Premiums 13%
SLIDE 21
MEDICARE IS AT RISK !
Source: CBO March 2016 Updated Budget Projections for 2016 – 2026
Medicare 2015 Benefit Payments = $632 billion = 100% Medicare Advantage Private Health Plans = 27% (31% of Enrollees) Total Traditional Medicare A & B + D = 46% (69% of Enrollees) Other 13%, Home Health, 3%, Skilled Nursing 5%, Outpatient 7% Medicare Advantage Private Health Plans = 27% x 632 = $171 (served 31%) Traditional <Medicare A & B plus D = 46% x 632 = $291 (served 69%) Medicare Advantage Private Health Plans = 31% consumed $171 or $5.5/1% Traditional Medicare A & B plus D Plans = 46% consumed $291 or $4.2/1% Medicare Advantage plans consumed 31% more funds than did Traditional Medicare for every 1% of Enrollees Served
SLIDE 22
MEDICARE IS AT RISK !
Source: CBO March 2016 Updated Budget Projections for 2016 – 2026
$ (~ 15% of Federal Budget) % Total Payments % of Medicare Enrollees Medicare Outlays for Every 1% of Enrollees Served Total 2015 Medicare Benefit Payments $632,000,000,000 100% 100% Medicare A - Hospital Inpatient Services $145,360,000,000 23.0% Medicare B - Physician Payments $69,520,000,000 11.0% Total Traditional Medicare - Plans A & B $214,880,000,000 34.0% 69% $3,114,202,899 Medicare C - Medicare Advantage Plans $170,640,000,000 27.0% 31% $5,504,516,129 Medicare D - Prescription Drug Plans $75,840,000,000 12.0% 100% $758,400,000 Other Services $82,160,000,000 13.0% Hospital Outpatient Services $44,240,000,000 7.0% Skilled Nursing Services $31,600,000,000 5.0% Home Health $18,960,000,000 3.0% Total Other, Patient, Nursing & Home Health $176,960,000,000 28.0% 100% $1,769,600,000 Grand Totals (+1% rounding error) 101% 100% $11,146,719,028 Net Federal Outlays to Medicaid & Soc. Sec. are included in the "Other" Category of the Federal Budget
SLIDE 23 Plan Coverage
Medicare - (Plans A and B), Fee for-Service (FFS) Plans Medicare Advantage (Plan C) - (HMO's, HMOPOS, PPO's, FFS)
Premium Support Plan Proposal (Voucher Plan) and Federal Subsidies
Plan Access for those over age 65
Only One Plan-Everywhere
Varies by State, Region & Insurer - many plans
Supplants Medicare C (MA, HMO,PPO,plans) in 2022. Must be 69.
Over Age 65 Health Care Plan Options A & B plus buy D and/or Medigap A & B mandatory plus insurer adds. Private HMO plans on a
REGIONALMedicare Exchange would compete with FFS A & B
Premium Cost
Part B- Only; Part A is prepaid with 1 1/4% payroll tax. Pay B premium & MA insurer premiums in-
- State. PPO & FFS out-of-net plans are more
expensive.
Raises eligibility age to 69, includes
Chained CPI, changes tax, premiums & subsidies
set using 2nd lowest plan cost as well as Traditional Medicare.
How FFS Premium Rate formula schemes affected Medicare and Privatized Plans.
Rates are set based on recovery of incurred costs and 3 - 5% overhead. Most Medicare Advantage plans are "Community Rated". Premiums are the same for everyone regardless of age. Plan would include means testing and If cost &
expense not in control by 2033 then payments will be capped at 1% over GDP + 1% + inflation
The MMA 2003 significantly increased Federal Subsidies paid to insurers from the Medicare Trust .
MA plan subsidies paid for on behalf of
- nly those who paid in 30% of money into
the Medicare Trust. 12%-17% cost subsidies are refunded to insurers from Medicare Trust - covers 30% who are on an MA plan. Federal subsidies in vouchers not FFS based - designed to drive traditional Medicare A
& B FFS plans out of business.
Deductible Cost
Pay Plan B Deductible Only. Varies by Plan To be set by multiple insurers Regionally
SLIDE 24
SUMMARY
HAVE TO SET ASIDE POLITICAL PARTY BIASES THINK SHORT & LONG TERM – for Seniors, Heirs & U.S. Economy THE NRLN IS PREPARED GRASSROOTS GROWTH IS ESSENTIAL WE NEED “NRLN VILLAGERS” - WE NEED YOU!
