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What does the Republican platform do for seniors?

Personal Finance
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House speaker John Boehner asked recently, “Have you ever met anybody who has read the party platform?”

We have – especially the sections that most affect seniors and retirees. Of course, no candidate has pledged to slavishly follow every precept in the document, and Presidential candidate Romney has insisted that he will at some point reveal his own intentions regarding Medicare, Medicaid (Medi-Cal in California) and Social Security. Until he does, however, we can be guided by the details he has allowed into the platform.

Details, details . . . let’s see, where are they? At this point, details will have to wait; someone can fill them in later. Maybe after the election. What is clear is that our open-handed approach to meeting the healthcare needs of seniors is costing the country more than it can afford, and is in danger of bankrupting the system of healthcare “entitlements” itself. The problem is that currently, as doctor bills pile up, the government tends to keep paying those bills. And Obama’s Affordable Care Act (“ACA”) compounds the problem by, among other things, closing the “donut hole” that puts seniors on the hook for drug expenses in a specific dollar range. The solution is to give future seniors a voucher with which to cover their expenses. They may use that money to purchase Medicare coverage (if they can afford it) or go onto the open market and look for coverage there.

Here’s how the Republican platform expresses those intentions:

The first step is to move the two programs away from their current unsustainable defined-benefit entitlement model to a fiscally sound defined-contribution model. This is the only way to limit costs and restore consumer choice for patients and introduce competition; for in healthcare, as in any other sector of the economy, genuine competition is the best guarantee of better care at lower cost.

If you wanted a guarantee, there it is. There’s also an implied guarantee of what will happen when the government grant runs out, which everyone, including Republicans, expects it to: you’ll be on your own. But the programs – Medicare and Medicaid – with their costs reined in, will be in improved fiscal health.

If you’re already on Medicare, you won’t be affected by changes in that program. Since the platform, like Paul Ryan’s proposals, repeals the ACA, presumably no one has to worry about any of the ACA reforms should the Republicans win the election. Watch for details. If you’re under 55, however, your version of Medicare will follow the defined-contribution model” mentioned above, with a contribution limited by law. And you’ll have to be older to join, which will reduce the number of retirees covered by the program. Here’s how that is phrased:

Without disadvantaging retirees or those nearing retirement, the age eligibility for Medicare must be made more realistic in terms of today’s longer life span.

What else can we do to bring expenses into line?

Medicaid, as the dominant payer in the health market in regards to long-term care, births, and individuals with mental illness, is the next frontier of welfare reform. It is simply too big and too flawed to be managed in its current condition from Washington.

Here we’re talking about the very needy, primarily the old and the indigent – people for whom Medicare isn’t enough. People, many of them in nursing homes with fairly bleak futures – folks who may not vote, but who are dependent upon the charitable impulses of the society they helped build. Again, the solution is to cut their entitlements, and let the states distribute what’s left. The expectation is that the states will make up the difference, while implementing efficiencies that Washington couldn’t see from so far away.

Finally, there’s Social Security – born, as the platform says, “in an old industrial era beyond the memory of most Americans.” Again, “ . . . no changes should adversely affect any current or near-retiree [but we should] allow younger workers the option of creating their own personal investment accounts as supplements to the system.” This is the previously discredited idea of letting people invest some of their Social Security benefits in the stock market. If you get lucky, this might work out quite well for you.