Medicare/Medicaid

2009 marks the 44th anniversary of the establishment of Medicare and Medicaid.  These two programs provide vital health care benefits to millions of Americans.  In 2008, the Medicare program covered an estimated 44.6 million persons, while Medicaid paid for medical services and long-term care for more than 63 million persons.

Today, Medicare is financed almost equally between payroll taxes (41%) and general revenue (39%), with beneficiary out-of-pocket costs making up the balance.  However, the portion financed by general revenue continues to grow, placing a significant strain on the federal budget.

According to CBO, Medicare spending is projected to nearly double from $477 billion in 2009 to $871 billion in 2018.

The Hospital Insurance Trust Fund has accrued $321 billion in Treasury Bonds, meaning the federal government will have to raise taxes, increase the debt, or find other funds to cover these obligations to Medicare Part A.

It is clear that Congress must act.  As MedPAC said in a recent report to Congress, “with each passing year, the Commission’s concern about Medicare’s long-term sustainability intensifies…. Changes in Medicare are complex to develop and implement.  Time, therefore, is of the essence.”

Congress needs to act in a bipartisan fashion to protect and preserve these vital programs.  Medicare and Medicaid need good management and innovative ideas to ensure they remain solvent.  Prudent actions now will save taxpayers money in the long term while meeting the health care needs of those who cannot care for themselves and millions of seniors. 

 

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Medicare Prescription Drug Benefit
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) provides Medicare prescription drug coverage for all seniors who choose to participate.  For many of the seniors I have talked to, this “choice” is a key element to the package.

In 2004, nearly 600,000 of the over 2.4 million Medicare recipients in Texas did not have prescription drug coverage.  Since enrollment in the Medicare Prescription Drug Benefit Program began, millions of seniors nationwide have voluntarily signed up for the coverage benefits.  The program is filling more than one million prescription drugs per day for America’s seniors.

The Center of Medicare and Medicaid Services (CMS) reports that beneficiary premiums are substantially lower than expected, falling from $37 per month to an average of $25 per month.  Competition among the program’s plans is working.  CMS reports that retail pharmacies are discounting the program’s top 25 drugs by 35 percent, and mail-order prescriptions are experiencing 46 percent discounts.

In addition to providing prescription drug coverage, the Medicare Modernization Act strengthens the Medicare program by increasing preventive services such as initial physicals and cholesterol screenings.  The act strengthens Medicare further by adding chronic disease management benefits to keep seniors healthy and out of the hospital.

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Medicare Physician Reimbursement
Under current law, annual payment updates for physicians are linked to a formula, typically referred to as the Sustainable Growth Rate, or SGR formula.  Under the formula, if cumulative spending on Medicare physician services since April 1996 exceeds cumulative target expenditures over the same period, a reduction in the update for physician payments is required (i.e., a reduction in the conversion factor). This has been the case since 2002; however, Congress has overridden the reduction since 2003. I have consistently voted to override the scheduled reductions in reimbursement rates for physicians.

Unless Congress acts to implement a long-term fix to this issue, each year we will be faced with the need to pass a more expensive patch in order to avoid drastic cuts to physician reimbursement rates.  This will make it more difficult for seniors to see doctors because more doctors will stop accepting Medicare.

I am very concerned about Medicare physician reimbursement rates.  It is disheartening to know that many physicians are feeling a financial burden brought on by flawed Medicare reimbursement policies.

I strongly support a long-term fix to the Medicare physician reimbursement rate issue, and will continue working hard to try and find a way to get a long-term solution to the flawed Sustainable Growth Rate (SGR) formula in place.