There are three important recent issues whose impact could affect the financial well-being of seniors. The first issue is a change in the PBGC (Pension Benefit Guaranty Corporation) that affects blue-collar workers in multi-employer pension plans. These pensioners no longer have pension protection because of a change in the PBGC that was passed at the end of last year. This PBGC change could conceivably affect more than one million private pensions. Retirees in all 50 states are affected, although the biggest of the pension plans in danger of collapse is the Teamster-affiliated Central States Pension Fund, which has some 410,000 participants in the Midwest and South. This change was enacted despite four decades of federal law promising that vested pension benefits would not be cut.
The second issue is the possible reduction by 20% to monthly Social Security disability payments beginning in 2016. This is due to the new House rule adopted by the 114th U.S. Congress, that bars the U.S. House from replenishing the disability (DI) trust fund by shifting some payroll tax revenue from Social Security’s retirement trust fund. This was done even though the Center on Budget and Policy Priorities states that reallocating some taxes between the retirement and disability trust funds is a historically noncontroversial measure that the U.S. Congress has taken 11 times, in both directions depending on which trust fund was running short.
The third issue is a pending Supreme Court case: King v. Burwell. Approximately six million Americans, over 125,000 of which are Arizonians, could lose tax subsidies to buy health insurance plans through the Patient Protection and Affordable Care Act (ACA) if the appellants in this Supreme Court case are successful. Arguments in this lawsuit will be heard by the Supreme Court in March with a decision expected sometime in June. This lawsuit challenges the legality of tax subsidies in states that did not set up their own state-run health insurance exchanges.
Many will lose the ability to buy affordable health insurance policies if these tax subsidies are denied. Seniors who have not reached the age of 65 and who do not have health insurance either through an employer or retirement benefits such as TRICARE will see large increases in their health insurance premiums. This will force many to drop their health insurance coverage; negatively impacting the financial health of Arizona hospitals, especially rural ones, because of an estimated increase in uncompensated care. It’s possible that the U.S. Congress could make a quick technical fix to restore the ACA subsidies. In the event that this does not occur Arizonians could still retain their subsidies if the state of Arizona establishes its own ACA health insurance exchange.
Irrespective of political affiliation or ideology, it’s unconscionable that our U.S. Congress, which bailed out the fat cats on Wall Street during the 2008 financial crisis, is now turning its back on our nation’s most vulnerable. To paraphrase a quote by Howard Beale in the movie Network “we should be mad as hell, and we should not take this anymore!” Write your United States Congressional representatives in Washington, asking them how they intend to resolve these three issues. Contact your state legislature representatives and governor to ask what they will do if their constituents lose valuable federal tax subsidies that would be available in other states. Each of us has the civic responsibility to at least vote during each election. It may be a good idea to keep a scorecard and keep track of how your elected officials vote on important issues. Use your scorecard and avoid all the political advertisements during political campaigns to determine if a candidate deserves your vote.
Ed Bagnaschi is a Member of SEAGO Region VI Advisory Council on Aging.