AARP Board of Directors Public Policy Meeting – Day 1

Social Security reform, innovative approaches to health care and legal reform and the health care system were topics at the first in a three-day series of meetings of the AARP Board of Directors’ annual Public Policy Meeting in Washington, DC.

Representatives Jim Kolbe (R-AZ) and Robert Matsui (D-CA) shared their views on reforming Social Security. The Board also heard from John Kitzhaber, a physician and former Governor of Oregon, who outlined steps needed to change the nation’s health care system, and Philip K. Howard, an attorney and chair of Common Good, a bipartisan legal reform coalition, on the need to overhaul America’s lawsuit culture.

Both Kolbe and Matsui called Social Security reform a topic of major concern to all Americans and agreed for the need to be honest and upfront with the American public in advancing the national dialogue on reform of the system now.

“The American people are way ahead of the politicians on this issue,” Kolbe said. “Our obligation is to be honest with people about what we can do and how we can pay for (reforms).” They instinctively understand the issue and want solutions, he said.

But he and Matsui differed in their approach. Kolbe called for structural changes, including personal accounts carved out of the FICA payroll tax. In addition, he would change the bend points, the average years of earnings used to compute benefits. He would add a minimum benefit and cut the CPI two-tenths of one percent. The President, he said, told him that he would “rely on Congress to see if we can move a bill on Social Security this year, to give him a green light.”

Matsui, noting that the basic purpose of Social Security is income security, reminded the Board that 70 percent of beneficiaries are retirees but 30 percent are survivors and the disabled. He said a radical readjustment was not necessarily the correct approach and that there is a need to look at the impact the entire federal budget and proposed tax cuts will have on Social Security reform. The only way to solve the Social Security crisis, he said, is for Democrats and Republicans to meet with the White House and “sit down without any preconditions.” “It has to be bipartisan to work. That’s what happened in 1983,” he said. He predicted that Social Security reform would not be introduced in this Congress but that there will be an effort to move public opinion on the issue throughout the year.

Kitzhaber said that any meaningful reform of the health care system must challenge existing current health care policies. “Conventional inside-the-Beltway thinking is responsible for part of the problem.”

He outlined four areas — cost shifting and selection, Medicare and Medicaid, implicit subsidies, and the need to get a health benefit for health care. These four issues will force debate to focus on the real underlying problems facing our health care system.” There is not explicit policy to finance the poor. He said there is a need to re-examine through the lens of the 21st century the basic premises on which Medicare and Medicaid were built, premises based on circumstances that no longer exist. Medicare is based on inequitable funding that is unsustainable in which financing goes from the young to support the old, and from workers to support retirees. He said there is a need to eliminate categories of eligibility and make all citizens eligible for the health care safety net. “The current system has already created conflict between the young and the old, the rich and the poor.”

“We need to move the debate from ‘how and who’ pays for health care to ‘what’ we are paying for,” he said. “To reframe the national health care debate will require the involvement of physicians and health care providers, organized labor, business, and organizations like AARP. “It is not that we can’t see the solution; we can’t see the problem,” he said.

Common Good’s Howard said the American legal system is the principle barrier to improving the country’s health care system. He noted that the prevailing “lawsuit culture” in this country has undermined our freedom to make sensible decisions. The decisions of doctors and teachers, he said, are hampered by fear of legal action and litigation. “The law today makes people nervous about doing almost anything,” he said, noting that “the law is missing from the modern legal system.”

Doctors often order unnecessary tests and procedures because they fear law suits. Howard called for a reliable system of medical justice based on a court with specialized medical expertise — a Health Court. This would replace current jury trials, similar to how workers compensation claims re resolved. Common Good will shortly issue a manifesto — a reliable system of medical justice that patients and doctors, HMOs and lawyers, can trust, Howard said.