Archive for June, 2011

Sen. Lieberman: Wrong Way on Medicare

We’re sorry – Connecticut’s Senior Senator has once again entered the Medicare “reform” debate with the wrong perspective.  Instead of looking to insure more people while lowering costs, Senator Lieberman, and his colleague Sen. Coburn, unveiled a plan on June 28th that is misdirected – reducing the number of people covered by Medicare, and foregoing major opportunities to bring down costs.

The Lieberman-Coburn proposal would raise the age of eligibility for Medicare, raise the cost of Medicare for beneficiaries, limit the ability to purchase supplemental insurance to fill Medicare’s gaps, and continue billions of dollars of wasteful overpayments to pharmaceutical companies and private Medicare plans.

Listen carefully folks, this is not the right direction for Medicare!

Read more of Judith Stein’s comments on the plan nobody is going to like in the CT Mirror at http://www.ctmirror.org/story/13101/liebermancoburn

June 28, 2011 at 10:18 pm Leave a comment

Lower Medicare Age

Lawmakers continue to talk about the future of Medicare as they address the federal deficit, and many of the proposals that have emerged would have horrible repercussions for Medicare beneficiaries and their families. Just last week, Connecticut’s Senator Joe Lieberman suggested raising the eligibility age for Medicare; an unsound idea that would hurt the actuarial balance of the Medicare risk pool. Raising the eligibility age would increase the proportion of older, sicker people in Medicare, while younger, healthier people – and their largely unused premiums – would be excluded. That’s the exact wrong direction, and we at the Center had to respond.

Follow the links below to see our letters in the New York Times and the Washington Post

http://www.nytimes.com/2011/06/16/opinion/l16krugman.html?_r=2&partner=rssnyt&emc=rss

http://www.washingtonpost.com/opinions/what-joe-lieberman-got-wrong-on-medicare/2011/06/13/AGbup9UH_story.html

June 16, 2011 at 6:09 pm Leave a comment

So – What Would You Do? Real Solutions for Medicare Solvency and Reducing the Deficit

As lawmakers debate the future of Medicare as part of broader efforts to address the federal deficit, proposals have emerged from Congress that would have severe repercussions for beneficiaries and their families.[1] Sound and measured solutions that would protect Medicare coverage while reducing costs to taxpayers have not been seriously addressed.  The six solutions we propose would accomplish both of these goals. 

These solutions, unlike current proposals, do not shift costs to beneficiaries or completely restructure theMedicare program. They promote choice and competition while shoring up the solvency ofMedicare. Adopting these solutions would be a responsible step in reducing our deficit the right way.

 1.  Negotiate Drug Prices with Pharmaceutical Companies

The Medicare prescription drug law passed in 2003 prohibits the Secretary of Health and Human Services from negotiating prices with pharmaceutical companies.  These companies gained 44 million customers when Medicare began covering prescription drugs, but they did not have to adjust their prices in return.  Requiring the Secretary to negotiate drug prices for Medicare would save taxpayers billions of dollars – potentially over $200 billion over ten years.[2] Taxpayers currently pay nearly 70% more for drugs in the Medicare program than through the Veteran’s Administration, which has direct negotiating power.[3] Savings realized from reducingMedicare drug cuts could be used to improve benefits for beneficiaries and reduce the deficit.

 2.  Stop Paying Private Medicare Plans Anything More Than Traditional Medicare

According to the Medicare Payment Advisory Commission (MedPAC), Medicare pays, on average, 10% more for beneficiaries enrolled in private insurance (Medicare Advantage or MA plans) than for comparable beneficiaries enrolled in traditional Medicare.[4] Despite these extra payments, beneficiaries in private plans who are in poor health, or who have chronic conditions, often have more limitations on coverage than they would under traditional Medicare.[5]

A large portion of the overpayments made to private plans actually goes to insurers rather than to benefit Medicare beneficiaries.[6] Although the Affordable Care Act (ACA) changed the payment formula forMedicare Advantage plans, some plans will continue to be paid as much as 115% of the average traditionalMedicare payment rate for their county when the new rates are fully implemented. MedPAC estimates that by 2017Medicare Advantage payment benchmarks will average 101% of traditionalMedicare.  ACA also provides additional payments for plans that receive high quality ratings, increasing the likelihood that some MA plans will continue to be paid more than under traditionalMedicare.  Reducing private MA payments to 100% of traditionalMedicare, as MedPAC proposed before the enactment of ACA, will increase the solvency of theMedicare program and curb costs for taxpayers.  Private plans simply should not receive higher pay than traditionalMedicare.

 3.  Include a Drug Benefit in Traditional Medicare

Offering a drug benefit in traditional Medicare would give beneficiaries a choice they do not now have, encourage people to stay in traditional Medicare, and save money for taxpayers.  It would also provide an alternative to unchecked private plans that leave many with unexpected high out-of-pocket costs. A drug benefit in traditional Medicare would protect beneficiaries against expensive and sometimes abusive marketing practices.  Further, traditional Medicare’s lower administrative costs could free up money for quality care, would result in lower drug prices for beneficiaries, and save taxpayers over $20 billion a year.[7]

4.  Extend Medicaid Drug Rebates to Medicare Dual Eligibles

Dual eligibles (people eligible for both Medicare and Medicaid) comprise one-fourth of all Medicare drug users, and are among the most costly beneficiaries. Because Medicare, rather than Medicaid, covers most of their drugs and because Medicare cannot negotiate drug prices, their drugs are not eligible for the same rebates as they would be under the traditional Medicaid program. Extending these rebates for dual eligibles would save at least $30 billion over ten years.[8]

5.  Lower the Age of  Medicare Eligibility

People between 55 and 65 who are not disabled are currently unable to enroll in Medicare.  Lowering the age of eligibility to allow this healthier population to enroll in the Medicare program would add revenue for people who will likely need less care and fewer services than older and disabled enrollees.

6.  Let the Affordable Care Act Do Its Job

The Affordable Care Act includes many measures to control costs as well as models for reform that will increase the solvency of the Medicare program and lower the deficit while protecting Medicare’s guaranteed benefits. The Congressional Budget Office estimates that repealing or defunding ACA would add $230 billion to the deficit while ignoring the real issue of rising overall health care costs, which contribute heavily to the growing national debt. ACA includes strong measures to allow CMS to combat fraud, waste, and abuse that will bring down costs, as well as a variety of pilot and demonstration projects that aim to bring better care and quality to beneficiaries.[9] The bipartisan Bowles-Simpson Deficit Commission recommended that these projects be  implemented as quickly as possible.[10] Allowing ACA to do its job will create a foundation on which to build by improving care and holding down costs for taxpayers.

Conclusion 

Protecting”Medicare by shifting costs from the federal government to beneficiaries and their families – whether through the creation of a voucher program or through measures that would be required by spending caps – is a perversion of Medicare’s original purpose, which was to protect older people and their families from illness and financial ruin due to health care costs.  The solutions proposed by the Center forMedicare Advocacy promote financial solvency without doing it at the expense of beneficiaries.


[1]See previous Alerts from the Center, “Why Medicaid Matters to Medicare Beneficiaries and Their Families”, “What Happens to Current Nursing Home Residents if House Budget Resolution Becomes Law?”
[2]National Committee to Preserve Social Security and Medicare, available at http://www.ncpssm.org/pdf/price_negotiation_part_d.pdf
[3]Center for Economic and Policy Research, “Negotiating Prices with Drug Companies Could Save Medicare $30 Billion”, March 2007, available at http://www.cepr.net/index.php/press-releases/press-releases/negotiating-prices-with-drug-companies-could-save-medicare-30-billion.
[4]MedPAC, Report to the Congress, March 2011, Chapter 12 (March 2011), available at http://www.medpac.gov/documents/Mar11_EntireReport.pdf.
[5] Neuman P. Medicare Advantage: Key Issues and Implications for Beneficiaries. Testimony before the House Committee on the Budget, United States House of Representatives, June 28, 2007, available at http://www.allhealth.org/briefingmaterials/NeumanTestimony-830.pdf,
[6] Medicare Payment Advisory Commission. March 2009 Report to Congress, Chapter 3: The Medicare Advantage Program. P. 251-253, available at http://www.medpac.gov/chapters/Mar09_Ch03.pdf.
[7]Senator Dick Durbin, available at http://durbin.senate.gov/public/index.cfm/pressreleases?ID=555cc1e8-cc54-4ead-9d85-d5e6275b3789.
[8]
Congressional Budget Office, Letter to Honorable Charles Rangel, available at http://www.cbo.gov/ftpdocs/104xx/doc10464/hr3200.pdf
[9]See previous Alert from the Center, “Combating Fraud, Waste, and Abuse in Health Care.”
[10]The National Commission on Fiscal Responsibility and Reform, “The Moment of Truth,” December 2010.

June 10, 2011 at 5:40 pm Leave a comment

10 Years of Tax Cuts for the Rich, 10 Years of Increased Debt

June 7, 2011, marked the 10th anniversary of Bush tax cuts that disproportionately benefited wealthy Americans. The rich are opening champagne bottles to celebrate, while advocates for older people and people with disabilities are trying to stave off the cuts to Social Security, SSI, SNAP, Medicare and Medicaid that some claim are needed so that these cuts can continue or even be expanded.

Why are the wealthy celebrating? According to the Center for Budget and Policy Priorities, people with incomes in excess of $1 million saw a 6.2% increase in after-tax dollars as a result of the tax cuts, as opposed to the 2.2% increase experienced by average families earning $40,000-$50,000 per year.  The average dollar tax benefit per tax payer for millionaires was $128,832 (or about three times the income of the average family).  The average dollar tax benefit per tax payer for the $40,000-$50,000 tax payers was $860.

What’s more, CBPP says that the cost of extending tax cuts for the richest Americans is about the same as the projected Social Security shortfall as a share of the gross domestic product (GDP) over 75 years, .7% for tax cut extensions versus .8% for the Social Security shortfall.

And finally, if the tax cut for the rich was allowed to expire, the increase in the debt would stop over the next 10 years.

So why are we talking about capping spending for programs that help middle and low-income Americans, or turning Medicare into a voucher program and Medicaid into a block grant?  The simplest solution would be drink one more glass of champagne for the Bush tax cuts and let them wither away on the vine.

June 8, 2011 at 8:27 pm Leave a comment


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We provide effective, innovative opportunities to impact federal Medicare and health care policies and legislation in order to advance fair access to Medicare and quality health care.

Judith A. Stein, Executive Director

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