As a great, prosperous and compassionate nation, we must ensure access to health care and retirement income security for our seniors. But we must also face the fact that changes are needed to preserve and protect these programs for future generations.
In 1965, health care programs and Social Security spending were less than a sixth of Washington's budget, but today they consume almost half of all federal spending and crowd out other national priorities. Without action, the problem will only get worse: Spending will more than double -- as a share of our economy -- by 2040. Unless we make changes to Medicare and Social Security, their trust funds will be exhausted and benefits will be cut. In Medicare, hospital benefits will be cut by nearly 15 percent in 2030. In Social Security, benefits will be cut by more than 20 percent in 2034.
If we do not have an honest conversation about what it will take to protect Medicare and Social Security, we fail seniors and we will fail the next generation of Americans.
I have a proven record of leadership on fixing entitlement programs like Medicaid. We stabilized Medicaid spending, modernized a 1960s-era program and gave patients real control over their health care. The Weekly Standard said, "On health care, no governor has attacked Medicaid, whose costs are swamping state budgets, more boldly
" and The Club for Growth called me a "champion of reforming entitlement programs." I don't just talk about problems -- I know how to solve them.
Here's how I will strengthen Medicare:
First, I'll work to implement bipartisan Medicare premium support (where Medicare provides seniors with a fixed amount toward a set of guaranteed coverage options):
Seniors will still get a simple brochure in the mail from the government every fall. They will be able to review and choose from their local options from Humana, Anthem, United or another private plan, or traditional Medicare. Seniors will have access to new options, like plans that specialize in treating congestive heart failure or diabetes or Alzheimer's.
Tech-savvy or homebound seniors might choose a plan the covers the ability to talk to their doctors with technology like video on their laptop, tablet, or smartphone. The government will base its payments on the average price of those competing plans. And premiums will be lower for seniors by 6 percent on average.
Representative Paul Ryan (R-WI) and other courageous conservatives have championed this approach to improve the structure of Medicare. If we act now, we can leave the next generation of Americans with a more prosperous future.
Second, I will immediately offer seniors better options for their care.
Today, seniors may be responsible for co-pays, deductibles and premiums, which can be difficult to afford on a fixed income. Once an individual enrolls in Medicare, he or she cannot save money in a tax-free health savings account, or "HSA." I will allow seniors to keep their HSAs to help cover out-of-pocket health care spending and have more financial security.
Finally, I will stabilize Medicare's finances with common-sense reforms.
I will work to reduce waste, fraud and abuse. I will lower the government subsidies that wealthier seniors receive. And I'll make sure that we're paying the right amount to hospitals, doctors and other health care providers.
Here's how I will strengthen American retirement income security:
First, I'll encourage private saving to reduce dependency on the government.
While access to private retirement accounts is at an all-time high, more can be done to help workers in small businesses. Under my plan, small businesses who cannot afford to contribute toward workers' retirement plans can set up "starter 401(K)s" for their workers, and businesses would have the ability to pool together to access a single retirement savings plan, which will save administrative costs and reduce complexity.
Additionally, I'll stop the Obama Administration's proposed regulations to limit consumers' choice of financial advisors and drive up the costs of private saving. Instead, I will review and streamline regulations that add unnecessary costs and make it difficult for individuals to save.
Second, we need to recognize that Americans are living longer, healthier lives, and we should make it easier for those who choose to work longer.
Life expectancy has increased substantially since Social Security was created in 1935. Yet Social Security's structure still discourages work past the age of 62. Reforms should update Social Security to respect seniors' desires and abilities to work later in life.
Finally, I will stabilize Social Security's finances by implementing reform proposals to slow the growth of costs. These kinds of reforms will require bipartisan support, and I propose using many of the ideas from the Simpson-Bowles Commission. No senior who has worked for more than 30 years should live in poverty, so I will increase the minimum social security benefit. And we can change Social Security so that higher-income workers, who can afford to save for retirement on their own during their careers, get a smaller check when they retire. These kinds of reforms will ensure that Social Security remains stable over the next 75 years.
Improving security for current seniors and prosperity for the next generation will require experienced leadership. Bipartisan solutions have been proposed, and thoughtful problem-solvers know what needs to be done. The country now deserves an honest debate and strong leadership to prepare us for the 21st century.