Press Release             

Contact: Akiko Takano
Communications Associate
Deane Beebe
Public Affairs Director
Medicare Rights Center

February 15, 2008

President Bush Puts Health of Americans with Medicare in Jeopardy While Overpaying Medicare Private Insurers

Statement by Robert M. Hayes, President, Medicare Rights Center

The 45 percent threshold that triggered the legislation proposed by President George W. Bush today is not a true measure of the financial health of Medicare. Rather it measures how much care people receive in the outpatient setting - such as doctor visits and prescription drugs.

Health care provided in outpatient settings are funded by general revenues unlike hospital care, which is paid for by payroll taxes. It is good, not bad, that Medicare covers health care that keeps older and disabled Americans out of the hospital.

The proposal in today's legislation to means test the premium subsidy for Part D drug coverage--charge a higher premium to upper-income people with Medicare---takes Medicare in the wrong direction. Part D, which is delivered only by private companies and not through Original Medicare, is already fragmented and overly complex. Charging higher premiums based on income further divides people with Medicare. Instead, Congress should allow people with Medicare to the option to receive drug coverage through Original Medicare and use the negotiating power of Medicare to save money on drugs for both consumers and taxpayers.

The proposals to tie Medicare payments to hospitals, doctors and other health care providers to measures of quality and efficiency are worthy of consideration but are completely unworkable in the context of the drastic, across-the-board payment cuts included in the President's budget. Paradoxically, the President's budget allows insurance companies to continue to bilk Medicare, even though the Medicare Payment Advisory Commission has concluded that these private Medicare health plans are overpaid.

Medicare Rights Center (MRC) is the largest independent source of health care information and assistance in the United States for people with Medicare. Founded in 1989, MRC helps older adults and people with disabilities get good, affordable health care.