Last week I had the opportunity to appear on a local talk radio show to talk about the impact of health reform on Senior citizens. It is a timely topic, since it is election season and campaign ads are airing in my state and others on this subject. Most of these ads are focused on the subject of Medicare. Both parties contend that the other will “cut” Medicare. And both parties have technically done so over the years. A great teacher once told me that everything boils down semantics in American politics. The reality is that some forms of Medicare cuts will be inevitable due to growing costs, and serious quality measures will need to be added over the next decade.
Why such drastic changes to a program so popular? Well, Medicare is a major part of the health care system. It costs over $400 billion each year to operate and is full of complexities thanks to being part of the Federal bureaucracy. Nearly $50 billion is wasted annually due to fraud and abuse – a serious amount of cash, which if eliminated, would equal almost half of the necessary cuts assigned to the Congressional Super-Committee, the group of Members from both the House and Senate assigned to find $1.2 Trillion over the next decade. But this only solves part of the problem.
The other part is improving health care quality and Medicare provides a vehicle to do that. Since it controls a large part of the health care market, many providers look for Medicare to take the lead on reform efforts. The health reform legislation creates a Center for Medicare Innovation which looks at new ways to prove high quality care at lower costs.
The Affordable Care Act also included several provisions that strengthen Medicare benefits. These include rebates and discounts for drugs for seniors on Medicare Part D who find themselves in the Donut Hole. Other preventive measures are now covered as well, and the law looks at ways to bundle payments for services and cut down on costly hospital re-admissions.
Other improvements to Medicare could be made by Congress if they are willing to put politics aside. In 2003, the Medicare Modernization Act (MMA) created the Medicare Payment Advisory Commission (MedPAC) which reports semi-annually to Congress on ways to improve the Medicare program. Unfortunately, most of these reports end up on a bookshelf instead of being welded into policy changes. This is because many politicians are afraid to make serious changes to the program for fear of being attacked from the other side which delays the inevitable.
So the bottom line is this. Until both sides stop throwing bombs and get serious about solving the problem, expect little to be done to control this rapidly expanding program. And expect more talk of tax increases or cuts to other programs. Like I have said before, when one program grows faster than the others and revenues cannot keep up, there are two solutions: increased taxes or reduced services elsewhere. Medicare reform measures must be addressed annually with a bi-partisan approach which is an appropriate request since the original program was passed with support from both parties, eventually receiving 68 votes in the United States Senate, a near impossible feat in today’s political landscape.
Want more? Check out the resources section on this site and the ones listed below for some useful information on the Medicare program. Check back for more information on this subject and others as we follow the implementation of health reform.