GOP Agenda a Threat to Americans’ Retirement Security, House Panel on Pensions Learns

Jun 14, 2011 Issues: Retirement and Pensions

WASHINGTON, D.C. – Seniors’ retirement security would be put in danger if the Republican plan to end Medicare were to be successful since Americans would need hundreds of thousands of dollars in additional retirement savings, a House pension subcommittee discussed today.
 
“Obviously it makes a lot of sense to talk about ways we can work together to try to enhance and improve retirement income for our retirees. In that light, I would respectfully suggest that the majority withdraw their proposal to end Medicare,” said U.S. Rep. Rob Andrews (D-NJ), the senior Democrat on the Health, Employment, Labor and Pensions Subcommittee. “If we want to talk about elevating the standard of living for America’s retirees, we ought to be talking about withdrawing this disastrous proposal from Republicans.”

View Rep. Andrews’ opening statement.

The House Republicans in April voted to end the Medicare guarantee for those under 55 and instead give them a voucher or premium support and find an insurance policy in the private market. The value of the support would diminish over time.

“These two dramatic changes in Medicare will shift trillions of dollars of costs onto future beneficiaries,” said Max Richtman, executive vice president and acting CEO of the National Committee to Preserve Social Security and Medicare. “According to the Congressional Budget Office, the cost of purchasing insurance from private companies will more than double a retiree’s out-of-pocket costs in the first year.  And the vouchers used to subsidize the premiums will grow more slowly than health inflation, further reducing the value of the federal contribution over time.”

In other words, under the Republican plan, seniors would be responsible for vast majority of their health costs. According to the Center for Economic and Policy Research, a 54-year-old today would have to save an additional $182,000 over the next decade just to afford private health coverage under the Republican plan to end Medicare.

Americans younger than 54 would need to save much more

 

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