Posts filed under ‘Fiscal Responsibility’
Benefit Cuts or Drug Discounts?
According to a 2012 Congressional Budget Office report, aligning Medicare drug payments with what Medicaid pays just for low-income beneficiaries would save $137.4 Billion over ten years. (CBO Estimates for President’s Budget for 2013, 3/16/2012).
While the President suggested this reform in his State of the Union address, discounting what Medicare pays for drugs has thus far not been taken seriously by decision-makers.
Instead, we have repeatedly been told that Medicare cannot be sustained and that benefit cuts are necessary. Yet all these Medicare benefit cuts combined would only equal $35.4 Billion in savings over ten years:
1. Increasing income-related Part B premiums;
2. Increasing income-related Part D premiums;
3. Increasing Part B deductible for new enrollees;
4. Adding a Part B premium surcharge for first-dollar Medigap coverage;
5. Adding home health co-pays for new enrollees.
If all of these benefit cuts, that would hurt older and disabled people, save only 25% of the savings that would be achieved by requiring drug companies to give the same discounts to Medicare as it gives to Medicaid, why don’t we choose drug discounts? How can benefit cuts be preferable if the goals are to reduce the deficit and save Medicare for future generations?
Lower Medicare payments for prescription drugs. Choose People and Medicare over PRxOFITS!
New CBO Report Shows Medicare Leading the Way on Lowering Costs
Last week, the Congressional Budget Office released a new budget outlook with updated data on expected federal costs of programs including Medicare and Medicaid over the next ten years. According to the CBO, Medicare spending in 2012 grew by only 3% – the lowest rate of growth in over a decade,[1] and a rate much lower than that of the private market.[2] In fact, the Washington Post notes that “From the March 2010 baseline to the current baseline…[CBO] lowered estimates of federal spending for the two programs in 2020 by about $200 billion — by $126 billion for Medicare and by $78 billion for Medicaid, or by roughly 15 percent for each program”.[3]
The new baseline estimates indicate that Medicare is leading the way in controlling costs, and that Medicare has significantly contributed to lowering the nation’s deficit through innovative payment and delivery models as well as reductions in overpayments to private insurance plans under the Affordable Care Act.[4]
CBO’s outlook illustrates that Medicare is not the problem, but rather the solution that policymakers should look to for addressing the real issue of overall health care costs affecting payers system-wide. While many look to slash Medicare and Medicaid in the name of deficit reduction through proposals like raising Medicare’s eligibility age or fragmenting the program through further means-testing, the CBO estimates reveal that such proposals are not rooted in fiscal policy. As the Post points out, “…$200 billion out of [Medicare and Medicaid] is nothing to sneeze at; that’s about double the revenue the government would generate by raising the Medicare eligibility age from 65 to 67.”
The Center for Medicare Advocacy has long maintained that if policymakers are really concerned about strengthening Medicare and reducing the deficit, cutting benefits is the wrong approach – and new polling shows that over 60% of Americans agree.[5] In fact, 85% of Americans strongly favor one of the Center’s Solutions to reduce the deficit: Requiring drug companies to give the government a better deal on medications for people on Medicare. Whether Congress chooses instead to protect the windfall profits of pharmaceutical companies rather than protecting people living on less than $22,000 a year and rely on Medicare to maintain their health remains to be seen.
[1] Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2013 to 2023, available at http://cbo.gov/publication/43907.
[2] http://www.healthcostinstitute.org/news-and-events/press-release-2011-health-care-cost-and-utilization-report
[3] Washington Post, Wonkblog: Three Ways CBO Expects Health Spending to Change. Available at http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/05/three-ways-cbo-expects-health-spending-to-change/
[4] Center for Medicare Advocacy, Medicare Facts and Fiction: Costs and Spending Edition, available at http://www.medicareadvocacy.org/2013/01/10/medicare-facts-and-fiction-costs-and-spending-edition/
[5] Kaiser Family Foundation and Harvard School of Public Health: The Public’s Health Care Agenda for the 113th Congress, available at http://www.kff.org/kaiserpolls/8405.cfm.
Medicare and … the Military?
I read David Brooks’ New York Times editorial yesterday with dismay. It seems Medicare is not only to blame for the federal deficit, but also for Sen. Hagel’s nomination and the end of America’s military might. I have been representing Medicare beneficiaries and studying Medicare since 1977. Even I was surprised by these positions.
The determination to slash Medicare seems never ending. One hardly knows where to begin responding. But we need to try, before it’s too late. Before the next deficit cutting activities get underway, we need to set the record straight.
The basic, public Medicare program was a cost-effective success. Medicare brought access to health care to older people who were refused private health insurance. It dramatically decreased poverty among older people. Unnecessary payments to private Medicare plans, unrestricted payments for prescription drugs and policies aimed at privatizing Medicare increased the program’s costs exponentially. These expensive provisions should be the targets for those whose true goal is to reduce the deficit. If the will exists, there is a way to reduce costs while preserving Medicare’s promise.
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Watch this short video from the Kaiser Family Foundation: http://www.kff.org/medicare/medicare-timeline2.cfm. It will remind you why Medicare matters.
Annual Medicare Payment Limits for Home Health – Even Worse Than Co-Pays for Beneficiaries
The Center for Medicare Advocacy has represented Medicare beneficiaries since 1986. As one of the few advocacy organizations in the nation solely serving Medicare beneficiaries, we strongly oppose home health episodic payment caps or any other such defined payment limits. The counterpart to this notion, caps on outpatient therapy, has created significant barriers to necessary care for thousands of our clients with long-term and chronic conditions. We have no doubt that episode caps would be harmful to some of those in greatest need of home care. Thus, we are adamantly opposed to such limits in the home health context.
The Center has long opposed Medicare home health co-payments, and continues to do so. Like caps, co-payments will limit access to in-home care for those most in need of these services. However, we are increasingly concerned about proposals to introduce home health payment limits. There is no question that home health payment limits would be disproportionately harmful for people with conditions such as traumatic brain and spinal cord injuries, Alzheimer’s, Parkinson’s disease, MS, and other such illnesses and disabilities. Without the possibility for ongoing home health care, these individuals may well need costly nursing home or hospital care.
For example:
• Our client, Mrs. Berkowitz, who is 81 years old and receives skilled physical therapy and home health aide services for her Multiple Sclerosis and related health needs, will require a nursing home if payment caps are instituted for Medicare home health.
Payment caps contradict and undermine growing efforts to promote better care, at lower costs, by encouraging and investing in home and community-based services.
Payment caps would also undermine the settlement just arrived at with the U.S. Department of Health and Human Services in the national class action law suit, Jimmo vs. Sebelius. The Jimmo Settlement makes it clear that Medicare coverage is available for home health patients who need skilled nursing or therapy to maintain or slow deterioration of their conditions. Jimmo holds the promise of continuing care at home for people with long-term conditions who would otherwise often need more intense and expensive institutional care. Medicare home health payment caps, however, would create a barrier to this care and provide a disincentive to home health agencies to offer care to this particularly vulnerable population.
We Don’t Need the Ryan Plan − Medicare Is NOT Going Broke
According to researchers from the Urban Institute, writing in the New England Journal of Medicine, Medicare’s purported dire financial condition isn’t actually all that dire. Given the aging of our population, increases in enrollment have obviously contributed to spending growth. But, according to the Urban Institute, “in recent years “spending growth per enrollee slowed in Medicare and Medicaid, and per-enrollee growth rates in the next decade are projected to be very close to the expected growth in [Gross Domestic Product] per capita. These data do not support the need for major restructuring of either program.” (emphases added)[1]
In short, contrary to repeated assertions, Medicare is not broke, going “bankrupt” or running out of funds,[2]. Further, Medicare provisions in the Affordable Care Act (ACA) have improved Medicare’s economic outlook − extending the solvency of the Medicare Trust Fund by 8 years.[3]
The real problem that needs to be addressed is rising overall health care costs. Overall healthcare expenditures per capita in the United States are higher than in any other country, and show no signs of slowing.[4] Addressing US health system costs in general is the only real solution to the fiscal issues ahead. The Affordable Care Act addresses many of these pressing concerns. Let it work.
[1] Holahan, J., McMorrow, S. Medicare, Medicaid and the Deficit Debate. Washington DC: Urban Institute, April 2012. Published in the New England Journal of Medicine, August 2012.
[2] See, e.g., “Medicare is Not Bankrupt” by Paul N. Van de Water, Center on Budget and Policy Priorities (April 24, 2012), available at:http://www.cbpp.org/cms/index
[3] See, e.g., CMS Press Release: “Medicare Stable, But Requires Strengthening” (April 23, 2012), available at:http://www.cms.gov/apps/media/press/release.asp
[4] See, e.g. Kaiser family Foundation at http://www.kff.org/insurance/snapshot
Fight for Medicare
The so-called Medicare wars are really a unilateral assault to the community Medicare program by those who favor privatization. Private plans are well known to cost more within and outside of Medicare. For decades, various experiments with private Medicare plans have proved more expensive than traditional Medicare. Nothing in Mr. Ryan’s plan is new or any more likely to save Medicare money. In fact, his plan would reintroduce vast overpayments to private Medicare plans that were rolled back by the Affordable Care Act. If the goal is to save Medicare, provide fair access to health care for its beneficiaries, and reduce spending – defeat efforts to turn Medicare into a private voucher system.
Scary Ryan Medicare Plan
The Center for Medicare Advocacy is a national leader for Medicare and the people it serves. “We have represented Medicare beneficiaries since 1986,” says Judith Stein, founder and executive director of the Center. “We’ve seen Medicare coverage save lives and bring peace of mind to thousands of families. We know how Medicare works and what keeps Medicare strong. Mr. Ryan’s plan sounds the death knell for Medicare,” continues Ms. Stein. “The private plans added to Medicare since 2003 have cost Medicare and all its beneficiaries dearly. Unfortunately, Mr. Ryan’s vision is to privatize Medicare.”
The Ryan plan would provide each beneficiary with a limited amount to purchase an individual private policy. The Ryan plan would gut the community Medicare program. It would reduce coverage and increase costs for seniors – while doing nothing to address the real problem of rising overall health costs.
“Medicare has dramatically increased access to health care and economic security for millions of older and disabled people and their families since 1965. Mr. Ryan’s plan puts all this in jeopardy. He purports to save Medicare – but will actually end the Medicare program as we know it.”
More Information:
CMA Heath Policy Post: “Medicare ‘Reform’ – Beware the Wolf in Sheep’s Clothing” at: https://cmahealthpolicy.com/2011/12/16/medicare-reform-beware-the-wolf-in-sheeps-clothing/
CMA Alert: “So What Would You Do? real Solutions for Medicare Solvency and Reducing the Deficit” at: http://www.medicareadvocacy.org/2011/06/09/so-what-would-you-do-real-solutions-for-medicare-solvency-and-reducing-the-deficit/
Save Medicare From Private Vouchers
Once again, Rep. Paul Ryan has reiterated his plan and commitment to “save” Medicare through priatization. (http://washingtonexaminer.com/opinion/op-eds/2012/05/medicare-two-paths-two-futures/568246) If only the logic of his plan was as clear as his determination to change Medicare into a set of capped vouchers. If passed, the popular community Medicare program would be replaced. Instead, individuals eligible for Medicare would get an annual alloawance to shop for their own insurance coverage.
Yet again, the Ryan plan would eliminate Medicare, not save it.
CMA Health Policy Blog 