In spite of this flop, the Board of Directors is not ready to give up on advertising. We’ll regroup and reconsider.

WE ADVISE CONGRESS

Legislation has been introduced to guarantee seniors their full Social Security benefits (HR832, HR3135, S806 & S1558). The problem is that when the baby boomers are retired, this could result in a crushing level of taxes for the young taxpayers. We wrote letters to Delaware Senators Biden and Carper and Congressman Castle opposing such a guarantee.

This legislation is supported by United Seniors Association (USA), a large senior’s organization. USA is asking members to contact their Senators and Members of Congress to support this proposed legislation. The proposal does not limit the guarantee to current retirees. For example, H.R. 3135 states that the Secretary of the Treasury shall issue a benefit guarantee certificate to each individual entitled to benefits and "The Secretary shall also issue such a certificate to any individual on the date such individual is determined thereafter to be entitled to benefits under such title."

As this is written, we’re sending letters to local offices of members of the House and Senate subcommittees on Social Security. We hope the District Directors will bring our letter to the attention of the Senator or member of Congress during the August recess.

Here is the letter:

THE LETTER

The letter to the ranking staff member in the Senator’s (Congressman’s) home state with the heading "SOCIAL SECURITY UNFAIR TO YOUNGER TAXPAYERS" is as follows:

"We note that the United Seniors Association has asked their members to contact the Senator in

support of legislation to give seniors a written guarantee of future Social Security benefits. Bills to this effect were introduced last year. Both HR3135 and S1558 provide for Benefit Guarantee Certificates for all future retirees.

We oppose such a law. It would be very unfair to younger taxpayers. If Social Security is not reformed, maintenance of the current level of benefits would result in a crushing level of taxes in the future for the younger taxpayers. Perhaps enough to cause a taxpayers revolt.

Without a law guaranteeing a particular level of retirement benefits, we assume the pain would be shared, with a cut in benefits and an increase in taxes.

We believe this situation might be avoided if Social Security is reformed by institution of Personal Retirement Accounts.

We hope the Senator will oppose any legislative proposal to guarantee a particular level of Social Security benefits."

DAVID & GOLIATH

We hope some in the media will consider our opposition to guaranteed benefits newsworthy. On one side is SAFE, defending the future of the next generations.

On the other side is AARP and other large senior’s organizations focusing on current benefits for seniors, and ignoring the interest of seniors in the future welfare of their children and grandchildren.

With this in mind, we prepared the following news release to be mailed a few days after the letter to the home offices of members of Congress and Senate subcommittees on Social Security.

Recipients of the news release include a major newspaper in each city where the office of the ranking staff member in the home state is located. Contacts are SAFE President, Bill Morris and President-Elect, Barry Dorsch. After the heading "SENIORS OPPOSE GUARANTEED SOCIAL SECURITY", the release is as follows:

"In letters to each member of the House and Senate subcommittees on Social Security, SAFE stated its opposition to an attempt by the United Senior’s Association to get Congress to guarantee the present level of Social Security benefits into the future.

The reason: Unfairness to the younger taxpayers. As stated in the letter, "If Social Security is not reformed, maintenance of the present level of benefits would result in a crushing level of taxes in the future for the younger taxpayers."

SAFE is a senior’s organization formed in Delaware in 1997. While the large senior’s organizations such as AARP work to maintain and increase benefits to seniors, SAFE focuses on the future welfare of the next generations.

The large senior’s organizations do not pay enough attention to the financial future of our children and grandchildren, says Bill Morris, President of SAFE.

Goals of SAFE include cutting government spending, paying off the debt and using part of the Social Security tax for Personal Retirement Accounts.

From its inception, SAFE has opposed the policies of the Washington D.C. office of AARP. According to Barry Dorsch, President-Elect of SAFE, "We see the AARP as a huge business that does what it can to increase the size of the federal government."

PLEASE MAKE THIS CALL

If you’re in a state with a member of the Senate subcommittee having jurisdiction over Social Security, please call the local office and support the SAFE position on guaranteed Social Security. If you happen to be in the district of a member of the House subcommittee on Social Security, please make the same call.

Calls from constituents are very important. Please call early in August.

Here are the Senators and the phone numbers of the local offices:

SC Hollings, Columbia, 803-765-5731

HI Inouye, Honolulu, 808-541-2542

NV Reid, Reno, 775-686-5750

WI Kohl, Milwaukee, 414-297-4451

WA Murray, Seattle, 206-553-5545

LA Landrieu, Baton Rouge, 225-389-0395

WV Byrd, Charleston, 304-342-5855

PA Specter, Philadelphia, 215-597-7200

MS Cochran, Jackson, 601-965-4459

NH Gregg, Concord, 603-225-7115

ID Craig, Couer D’Alene, 208-667-6130

TX Hutchison, Austin, 512-916-5834

AK Stevens, Anchorage, 907-271-5915

OH Dewine, Xenia, 937-376-3080

Here are the numbers of the House subcommittee and phone numbers at the local office:

TX Johnson, Richardson, 972-470-0892

GA Collins, Columbus, 706-327-7228

AZ Hayworth, Mesa, 480-926-4151

MO Hulshof, Columbia, 573-449-5111

KY Lewis, Elizabethtown, 270-765-4360

TX Brady, Conroe, 936-441-5700

WI Ryan, Janesville, 608-752-4050

CA Matsui, Sacramento, 916-498-5600

MI Doggett, Dearborn, 313-846-8886

MD Cardin, Baltimore, 410-438-8886

ND Pomeroy, Bismarck, 701-224-0355

CA Bicerra, Los Angles, 213-483-1425

NEWARK COMMUNITY DAY

We’ll be there again this year at the Newark, Delaware Community Day, September 29^th on the Campus at the University of Delaware. Again, we’ll use the outstanding black on yellow banner, "Seniors Against Federal Extravagance." It is available for loan – let us know if you’re interested.

Call us stubborn (persistent is better) – we’ll use a 24" x 36" blow-up of the ad that failed. We hope it will catch the attention of attendees who walk by. Besides, we don’t have a better idea as this is written.

THE EFFECTIVENESS AND

FUTURE OF MEDICARE

In the last newsletter, we discussed the formation of government supported health care. The Kerr-Mills Act of 1960 involved the states in a voluntary, means tested program which was adopted too slowly by the states, as judged by the supporters of Federal Government Medical Services. The 1965 King-Anderson legislation produced the organization leading to the Medicare/Medicaid of today.

These programs now cost us on the order of $250-300 billion per year. It is reasonable to ask how effective Medicare has been in improving the lives of the seniors covered.

Benefits claimed by Medicare supporters are: extended life expectancy, reduced numbers of seniors in poverty and reduced out-of-pocket (OOP) medical costs. We need to decide if Medicare can honestly claim major credit for any or all of these.

Let us consider life expectancy. If the medical service for the general populace, and the oldest fifth in particular is significantly improved, life expectancy would reasonably be thought to increase. Supporters of Medicare attribute the actual increases in longevity to Medicare. On the other hand, however, life expectancy in the U.S. had been increasing for many years before Medicare came along.

For example, the Census Bureau shows life expectancy for those who have already reached 60, to be 74 in 1930, 77 in 1960 and 80 in 1990. Note that in each 30 year period, the change was about 3 years, whether Medicare was in place, or not. Many other factors have increased longevity, such as small pox elimination, better infant care and industrial safety.

Medicare supporters further claim it has reduced the number of seniors living in poverty after its inception in 1965. However, factors other than reducing medical costs for seniors were at work. The poverty rate was falling long before Medicare. In 1947, it was 57%, in 1959 it was 35% and it declined steadily to 10% in 1995.

We ought to be careful about allocating too much credit to Medicare; especially in light of Out-of-Pocket (OOP) costs. One of the major reasons for enacting Medicare was the promise of reduction in OOP costs. A number of studies show this goal has not been achieved.

One reason for this is the rapid increase in health care costs. These costs increased much faster than the federal actuaries had predicted. As hospital costs and Doctors’ fees increase, the co-pay and deductibles rise proportionally. Shortly after the institution of Medicare, auto workers union chief, Walter Reuther and a NYC Health Administration Officer complained that their constituents were worse off than before Medicare.

Congressman Claude Pepper noted in 1985 that Medicare beneficiaries were paying 20% of their income for medical costs, the same as in 1964.

In 2000, an AARP study estimated Medicare recipients spend an average of 19% of their income on OOP costs. This does not include spending on Medicare co-insurance or deductibles, prescription drugs, dental care and part B and private insurance costs.

A study by M. Moon of the Urban Institute in 1999 projects senior health care spending increasing steadily to exceed 25% of income within 20 years.

A 1997 study showed Medicare paid about 55% of the medical costs of the average beneficiary. The rest was paid for OOP, private insurance, Medicaid or other ways.

We have now seen that Medicare has not achieved the three strongest goals supporting the program, and other aspects may be examined.

Many seniors may be expecting more coverage than the program provides, especially in the important areas of long term health care, nursing home and home care costs. Some of these costs can be catastrophic and Medicare coverage is thin-to-none. Recognizing this, about 75% of seniors have supplemental insurance, another 12% qualify for Medicaid, another 2% have "other" assistance and 11% are without any coverage and at full risk.

The cost of nursing home care, for example, often depletes the senior’s life savings until he qualifies for Medicaid, or the burden is picked up by younger members of the family.

How efficient is Medicare as an insurer? Sixty insurance companies process claims for Medicare for 39 million people. A program of this size is clearly hard to supervise and with the enormous complexity, hard to understand. These two features, and the large amount of money involved, lead one to expect some errors and fraud to occur. But, $11.9 billion/year in waste, fraud and abuse?? That seems excessive. The people running Medicare don’t seem to have any effective procedures in hand to reduce this waste to tolerable levels.

This very expensive, but ineffective and inefficient program is in dire need of attention and change. Medicare has about 130,000 pages of regulations, which means to me that no one understands the whole system.

Instead of pouring more and more money into this program, shouldn’t we look to replace it with something giving each senior more control and more direct responsibility to contain costs?

Among proposed solutions are Medical Savings Accounts (MSAs) which allow the next generation to put aside some money monthly for basic medical care and to buy inexpensive, high deductible ($3,000 to $5,000) catastrophe insurance. This government botched an experiment with MSAs in 1996-2001, but the idea still seems perfectly sound.

There may be other possible solutions available, and we should be thinking seriously about them and providing input to the officials who can legislate a reduction in this burden.

John Boughton

Margaret Mead