Robert Romasco: The TT Interview
The AARP president on what entitlement programs like Medicare and Social Security offer and what his organization will be examining after Gov. Rick Perry's announcement that Texas would not accept expanded Medicaid.
The benefits espoused by the AARP have been at the forefront of Texas politics for several years. And with federal and state lawmakers looking for ways to trim budgets, such entitlement programs have come under fire.
Most recently, Gov. Rick Perry’s announcement that Texas will not expand Medicaid — a choice the Supreme Court relegated to states in its ruling on the Affordable Care Act — has raised questions about the future of the program in Texas. In his failed bid for the presidency, Perry criticized Social Security, which the AARP champions, as a “Ponzi scheme.”
In light of such discussions, AARP President Robert Romasco spoke with The Texas Tribune about what the entitlement programs have to offer and their immediate and long-term futures. The following is an edited transcript of the conversation.
TT: Looking at the Supreme Court ruling on the Affordable Care Act, how do you think that affects the group that you and the AARP represent?
Romasco: Obviously we’ve been in support of the Patient Protection and Affordable Care Act since it was passed. We spent a fair amount of time and energy trying to educate our members about what benefits are in the act and how it affects them. Now that the Supreme Court has ruled on the constitutionality, we’re going to continue our efforts to make sure that everybody over 50 understands how this affects them on a day-to-day basis across the board. The strengthening of Medicare, the insurance reforms such as not being denied health care because of prior conditions, the medical-loss ratio being 80 percent, which we know will result in $1.2 billion in refunds to people across the country. And the whole process of making insurance available to more and more Americans. All the benefits and how that affects people —making sure people know how it affects them personally.
TT: Looking at Texas more specifically, Gov. Rick Perry said Texas would not accept expanded Medicaid. About 6 percent of the AARP membership lives in Texas. How do you think this decision might affect them?
Romasco: Well we really are looking at — obviously, since the decision was handed down, we’re looking at the implications of the Medicare/Medicaid ruling, potentially on people over 50 and involved in the program. Generally speaking, we haven’t looked in detail at the Texas population specifically, but as we all know, Medicaid is a hugely important benefit for Americans. Particularly for older Americans, Medicaid is often the funding source for nursing homes. So the concept that some — that it will be either reduced or the broadening of it in health care in general could be jeopardized is clearly a concern, and we will be looking at it very closely, hoping to understand the full implications of that. And to the extent that it will harm people, we’ll make the case that maybe another decision would be more helpful.
TT: So do you think Perry’s announcement was that the wrong decision?
Romasco: We want to look in detail at what the true impacts of that are and make sure our members understand what that does. And the extent that that does — again, these laws are very complex, and the interrelationship between that decision and current Medicaid funding and potential future Medicaid funding still needs to be sorted out to make sure we understand that. But in general terms, Medicaid has been an important issue for older Americans, particularly ones with limited resources. And we really need to understand what that does to people in terms of current benefits and potential future benefits as well as access to health care, which the Affordable Care Act did in fact do that. So that’s a place where we’ll be looking carefully and educating members about what its true impacts are, and hopefully public officials will learn as well.
TT: Another big question here has been how much funding Medicare should be receiving. One thing the state has done has been cutting back on Medicare funding, especially for those who are jointly eligible for Medicare and Medicaid. What kind of effect do you think that might have?
Romasco: Again, one of the things we’re doing in our education efforts is conducting a campaign called “You’ve Earned a Say,” which is designed to bring forward out of the conference rooms in Washington, D.C., the policy alternatives for Social Security and Medicare that would take the funding mechanisms and change laws for the programs that would both strengthen and preserve those very vital programs. So the dual-eligibles, which is really that overlap that you’re speaking about, is one place where we need a lot of understanding to understand what the true impact is. Are there any opportunities there for better coordination of benefits and actually looking at the financial structure of that without hurting any of the recipients? A lot of this conversation is about solving the budget equation. We recognize the fiscal challenge that the nation faces, but at the same time, we need to understand what the true impacts of any of these decisions are on real people. And the financial security that they’ve paid into these programs that depend on going forward.
TT: You mentioned that one of your campaign goals is looking at potential alternatives. Are there any you have in mind right now?
Romasco: Right now we’re focused on education and helping people understand what the proposals are. We’ve got a full campaign going — you can go to our website and see the several ideas that have been proposed by a variety of different individuals. We’ve gotten outside think tanks to comment pros and cons, both conservative and progressive, so that people are able to be involved in this conversation. We think it’s extremely important that the very people who paid into these programs, the very people who paid into these programs both now and in the future have an understanding of what the alternatives are and have a say in this very important debate.
TT: There’s been this recent analysis of how a lot of Medicare funding has been going to weight-loss surgery. Do you think this says anything about the effectiveness of the program or how it’s being run?
Romasco: Well I think the program is always undergoing review and scrutiny, and there’s always opportunities to strengthen the program, to make it more efficient. In fact, the Affordable Care Act has a substantial amount of money in that program to stamp out waste, fraud and abuse, an area which has been a real problem for Medicare going forward. There are all kinds of different ways for looking at the programs to strengthen them and improve them, and that could be a very interesting one to look at.
TT: Texas has been involved in a lot of debate over Social Security reform. Last year, when Perry was running for president, he called it a “Ponzi scheme.” What are your thoughts on the debate surrounding that?
Romasco: Well, we clearly don’t think it’s a Ponzi scheme. We think it’s an earned benefit that we as a nation came together in the 1930s and put this program in place. We’ve made several changes to it over the last 70 years. It’s a promise we’ve collectively made to ourselves as we age, to future generations as they pay into the program. Two-thirds of people who receive checks — that represents half or more of their income. As I talk to audiences across the country, I ask, how many people with an average benefit of $14,000 a year would like to live only on $14,000 a year. So it’s a modest benefit, but it’s a reliable benefit, and it’s an earned benefit, so we think the program has served the nation quite well. It’s raised particularly women out of poverty over the last 40 years. It is well-financed, it has a funding source. It has some challenges starting in the year 2030, but if we’re very thoughtful and understand the variety of possibilities to shore up those finances, I’m sure the nation could come together and renew that promise.
TT: Speaking to those challenges, are there any reforms that you think are necessary?
Romasco: Well I think the math is pretty clear — in 2030, the [Social Security] program will only be able to pay 75 percent of its benefits. And I think that’s something that obviously as the program continues is not a good idea. Remember, the program was put in place, and it was part of a three-legged stool: the Social Security benefits, the pensions that people received from work and savings. Obviously we find the benefit pensions have disappeared by and large and are a thing of the past. People’s savings, as we’ve seen, got decimated in the last decade in the Great Recession we’ve just experienced. So Social Security remains the single reliable and determinative piece of security for the nation as we age. We need to make sure that that program continues to be strengthened, continues to be properly financed and the benefits are appropriate considering the circumstances we find ourselves in.
TT: Speaking to that question of the program being properly financed, how do you think reforms — particularly cuts in Social Security — will affect older citizens in states like Texas?
Romasco: We need to help people understand what the program is. Fifty-two million people today receive Social Security benefits. Two-thirds of those are retired, but one-third of those are children of survivors and the disabled. It’s a social insurance program. It’s an earned benefit. We all — the vast majority of Americans — pay into that program, as do employers, and it’s been put in place to be one very important, reliable component for our financial security as we age. So that’s the broad context, and the question we’re trying to raise is as we’ve heard ideas — and we’ve heard a host of them on the revenue side, on the benefits side — what are the true implications? It’s really a question of what kind of country do we want and what can we afford and what are we willing to pay for it. But until people understand different options, it’s hard to come in favor of one things or another. We have a lot of confidence and respect for our members that they’ll tell us, and in their willingness to engage and understand. They need the information to be presented in a balanced way, and they need to be invited so that their views will be known and their opinions will be brought forward to the policy-makes in Washington. And we intend to do that.
TT: What do you think would be economic consequences if the program did lose some funding?
Romasco: The state of Texas for instance: The Social Security program on an annual basis — the benefits that come to Texas are $43 billion a year. If for some reason that were substantially reduced, that would be a significant hit to the economy, in just pure economic terms. But the real issue is what does it do to people’s lives? How can people maintain a reasonable standard of living if those benefits are reduced? And most importantly, what’s the tradeoff between any adjustments in benefits and the costs of those things? And I don’t think people have really understood that. But if we have a conversation and look at the alternatives, we’re confident that people will come to a reasonable decision. But until they have that information, until they understand who gets affected by whatever that is, it’s very hard to — we want to eliminate the political spin and the demagoguery that surrounds these programs too often.
TT: How do you think that climate of belt-tightening and cutting all these benefits — how is that affecting the elderly in Texas and in the country?
Romasco: I travel around the country, and one of the privileges I have as the AARP’s president and as a member of the All-Volunteers Board is to talk around the country and speak to people who depend on these programs. You know, whether they’re somebody who privately said to me, “When I was a young girl, my dad died and the four of us got Social Security survivor benefits and that allowed us to stay in our home and our mom raised us and we moved on to have good careers, and without those Social Security benefits, it just wouldn’t happen.” Or the businessman who retired in Pennsylvania who told me that Medicare was the reason that he got a lung transplant — the first test he had was a financial test. If it wasn’t for Medicare, he’d be dead now. Those are just two examples of the myriad examples who show what these programs mean to people on an everyday basis. We need to understand that, we need to put that in the context of our overall financial choices that we made for the nation. We need to ask the question: What kind of country do we want? What kind of programs do we want? What can we afford and what do we want to pay for?
TT: Is there anything else you want to talk about we haven’t discussed?
Romasco: You’ve gotten the major message here, which is our role is to make sure the people who participate and are affected and will be affected by these programs have a good understanding of the pluses and minuses of any solution, know how it affects people, and then make their voices heard to the people who are ultimately in charge of deciding the strength of these programs. We’re dedicated to doing that. Interestingly enough, when we first did the survey in late spring, over half of the people we surveyed were happy we were doing it but doubted that people in Washington would actually listen to what came out of it. We think that’s an important finding and we want to make sure we prove those people wrong.
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