AARP Hearing Center
1. Shoring up Social Security
Social Security’s trust funds will fall short by 2034; if that happens, benefits would drop by about 20 percent, a 2018 government report says. Some elected officials have proposed cutting Social Security as part of deficit reduction. The results of congressional races in November could determine whether that gains momentum in Washington. And if Republicans still control Congress next year, Social Security’s cost-of-living adjustment (COLA) could face a major change. The consumer price index (CPI), which determines increases based on inflation, might be ditched for the “chained CPI,” which assumes consumers will buy cheaper goods if relative prices change, so it substitutes less expensive things for pricier items — chicken, not steak . If that happens, Social Security benefit increases tied to inflation would fall. “It compounds against you the longer you receive benefits,” said Gary Koenig, vice president of financial security in the AARP Public Policy Institute.
2. Rising drug prices
Prescription drug costs are increasing at a rate 10 times faster than inflation, and state legislatures, Congress and the federal government are starting to take on pharmaceutical companies. At the state level, more than 80 bills to try to lower drug prices were introduced in 2017, according to the National Academy for State Health Policy (NASHP). But only a few have passed so far. President Trump, too, announced his plan to cut drug prices, although he dropped his campaign vow to allow the federal government to directly negotiate lower prices for Medicare beneficiaries. AARP supports allowing Medicare to negotiate drug prices, permitting the importation of safe lower-cost drugs and speeding generic drugs to market. “Drug prices are just way too high,” said Leigh Purvis of the AARP Public Policy Institute. “The trends simply can’t continue.”
3. Medicare funding
Medicare’s trust fund will fall short by 2026, according to a report by the program’s trustees in June. House Republicans have proposed a budget that would give seniors a voucher-type option to enroll in private health plans, and have proposed other changes that would squeeze $537 billion out of Medicare. Whether that proposal moves ahead could depend on who controls Congress after November. Lina Walker, vice president of health security for the AARP Public Policy Institute, said, “If your legislator tells you that Medicare is going broke and requires draconian changes to fix it, ask more questions.” For example, does his or her proposal simply shift more costs onto the consumer, or does it try to reduce health costs and cut wasteful spending?
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