Medicare Watch

Majority of Americans Oppose Cuts to Medicare

The Washington Post and the Kaiser Family Foundation recently conducted a poll of both Democrats and Republicans and found that the majority of people, regardless of party affiliation, oppose cuts to Medicare and Social Security.

When asked about national economic issues that are most worrisome, 44 percent of those polled responded that the cost of health care is either the most or second-most worrisome issue. However, most people—77 percent of those polled—oppose cutting Medicare to reduce the nation’s budget deficit.

Additionally, 58 percent of people believe Medicare should remain the program it is today, guaranteeing core benefits, rather than be converted to a premium support model as proposed by Congressman and vice presidential candidate Paul Ryan. The Ryan proposal would end Medicare as we know it, providing beneficiaries with a government-issued voucher to purchase private insurance. Analysis shows that the amount of the voucher would be unlikely to keep pace with rising health care costs. Thus, over time, out-of-pocket expenses for Medicare beneficiaries would increase. Estimates suggest that the Ryan premium support model could cost beneficiaries an additional $6,400 per year. People with Medicare are in no position to pay more for health care: half of all Medicare beneficiaries have annual incomes below $22,000, and they already spend, on average, 15 percent of their incomes on health care.

Read “Medicare, Social Security Cuts Face Wide Opposition.”

Medicare Surpasses Private Plans in Cost Control

A recent article in the New England Journal of Medicine (NEJM) finds that Medicare controls spending better than private plans do. Yet in the midst of current deficit-reduction debates, where Medicare reform remains front and center, some policymakers claim that Medicare spending is unsustainable. These same policymakers argue that controlling the nation’s deficit requires drastic changes to Medicare’s structure—including making beneficiaries pay more for less health security.

Yet data on Medicare spending does not support such claims. Overall, health care spending slowed towards the end of the decade, but more so in Medicare than among private plans. The report finds that between 2000 and 2010, Medicare spending per enrollee grew at a lower rate annually than did spending among private payers. While the reasons behind this spending slowdown are not well-understood, the report partly attributes a number of specific policy changes, such as measures taken to reduce hospital spending and increased utilization of generic drugs.

Experts at the Centers for Medicare & Medicaid Services (CMS) anticipate that, over the next ten years, Medicare will continue to out-compete private plans on spending measures. While Medicare costs will increase, due to enrollment in the program by baby boomers and growing health care costs overall, CMS predicts that advancements passed through the Affordable Care Act (ACA) will still result in lower expenditures for Medicare than for private plans. Specifically, CMS estimates from 2012 to 2021 show that Medicare spending is projected to grow, per year per enrollee, by 3.1 percent compared to 5 percent for private insurance.

Proposals that would cut Medicare and shift costs to beneficiaries fail to recognize that Medicare is an innovator in delivery—and cost—reform that can improve spending in the health care system as a whole. As the NEJM report concludes, Medicare should not be restructured; rather, policymakers should look to the program for examples of how to successfully contain costs.

Read the NEJM article, “Medicare and Medicaid Spending Trends and the Deficit Debate.”

Read the Center on Budget and Policy Priorities’ summary of the NEJM report.

Medicare Reminder

Many states offer a state pharmaceutical assistance program (SPAP) to help their residents pay for their prescription drugs. Each program works differently.

Many states coordinate their drug assistance programs with Medicare’s drug benefit (Part D). If you do not have Part D but qualify for your state’s SPAP, you may be required to enroll in Part D and sign up for a Part D plan.

If a drug is covered by your SPAP and your Part D plan, both what you pay for your prescriptions plus what the SPAP pays will count toward the out-of-pocket maximum you have to reach before your Medicare drug costs go down significantly. Your SPAP may also help pay for your Part D plan’s premium, deductible, and copayments, including in the prescription drug coverage gap, or doughnut hole.

Learn more about your state’s SPAP at www.medicareinteractive.org or call our helpline at 800-333-4114.

Spotlight

To help people understand policymakers’ positions on Medicare, we have compiled two new resources: “Five Medicare Questions for Candidates” and “Medicare: Strong and Build to Last.” Individuals can direct the candidate questions to Presidential, Congressional and Senatorial candidates to inquire how the policies they support will affect Medicare beneficiaries. Many of the questions focus on Medicare’s future and the benefits and coverage that will be available to beneficiaries. These issues currently sit at the center of the deficit-reduction and budget debates.

To help inform that debate, our fact sheet on Medicare’s future includes key facts about Medicare’s role in helping American families stay economically secure. It also discusses health care spending trends and the success of the Affordable Care Act. Read these new resources and find out where your candidates stand on Medicare’s future.

Read Medicare Rights’ “Five Medicare Questions for Candidates.”

Read Medicare Rights’ “Medicare: Strong and Built to Last.”