A FEW FACTS ABOUT MEDICARE
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A FEW FACTS ABOUT MEDICARE Who does Medicare serve? Medicare was established in 1965 under Title XVIII of the Social Security Act. It is a federal entitlement program that provides health insurance to individuals 65 and older as well as permanently disabled individuals. Today, one in seven Americans are served by Medicare and almost all of the population aged 65 and over. How does Medicare work? The Medicare program consists of four parts and is financed through two trust funds, Hospital Insurance Trust (HI) Fund and Supplementary Medical Insurance (SMI) Trust Fund: (1) Part A (HI) covers inpatient hospital services, skilled nursing care, and home health and hospice care; (2) Part B (SMI) covers physician services, outpatient services, and some home health and preventive services; (3) Part C (Medicare Advantage, or MA) provides optional private plan for beneficiaries that covers all Part A and B services, except hospice; and (4) Part D that covers outpatient prescription drug benefits. Is Medicare headed for bankruptcy? Medicare spending is growing at an unsustainable rate of 7.39 percent per year. If this rate of spending continues, Congress would need to consider immediately raising the payroll tax on worker wages and employers by 24 percent or reducing benefits enjoyed by millions of retirees by 17 percent -- or both. The Centers for Medicare and Medicaid Services (CMS) issued its annual report on the fiscal status on Medicare, the 2011 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds. (The report can be located at: www.cms.gov/ReportsTrustFunds/downloads/tr2011.pdf.) According to the report, the Trustees predict that the hospital insurance program will go bankrupt in 2024, five years earlier than they estimated in last year’s report. Two Medicare Trustees recently testified before the House Ways & Means Committee about the need for legislative action to strengthen and preserve Medicare so that it can serve current recipients and future retirees. Charles Blahous, Ph.D., Public Trustee for Social Security and Medicare: "The Medicare program faces real and substantial financial challenges. It will best serve the interest of the public if these financial changes are made at the earliest possible time." Robert D. Reischauer, Ph.D., Public Trustee for Social Security and Medicare: "Further legislative changes have to be considered by the Congress. The sooner those are enacted the less disruption there will be for taxpayers, beneficiaries and for providers." Raids Medicare – Slashes $575 billion from the Medicare program to expand Medicaid and create an unaffordable new entitlement program. According to Center for Medicare & Medicaid Services Actuary Rick Foster, Medicare Advantage enrollment will be 50 percent lower because of the federal health care law, thereby jeopardizing the Medicare Advantage plans of 32,380 seniors here in the 6th District. More power to bureaucrats – The new law creates the 15-member Independent Payment Advisory Board (IPAB) to make decisions about cutting Medicare and whether seniors will have access to a particular treatment. While IPAB members will have the authority to make decisions better left to seniors and their doctors, they will not be required to have any medical training. During the health-reform debate, even House Democrats who for the bill commented that IPAB would “threaten the ability of Medicare beneficiaries…to access the care they need.” Fewer hospitals -- According to the Center for Medicare and Medicaid Services Chief Actuary, 15 percent of hospitals nationwide will go out of business as a result of the federal health care law’s reductions in Medicare reimbursements. That means 29 Pennsylvania hospitals could close. Time for real solutions I strongly support a plan that keeps the promises we’ve made to seniors and those nearing retirement. It’s a plan to preserve and strengthen Medicare so that all seniors have access to quality, affordable healthcare when they need it. And it’s a plan that would give those age 54 and younger the freedom to choose from competing plans that best fit their needs and give them similar choices Members of Congress currently have. I have listened carefully to the seniors in my district and have heard their thoughtful comments about how best to strengthen and preserve Medicare. I made sure those in Washington also got the message loud and clear. Thanks to input from seniors here in the 6th District and across the country, the plan that passed the U.S. House of Representatives earlier this year does not change Medicare at all for anyone 55 or older and it would put in place reforms that will preserve and protect the program for future generations. In that process, we also need to root out waste, fraud and abuse in the Medicare system to save billions of dollars each year. This plan would help eliminate waste, fraud and abuse. |