Press Release             

Contact: Mitchell Clark
Senior Communications Associate

March 29, 2012

Statement by Medicare Rights Center President Joe Baker on Passage of House Budget

New York, NY— Today’s vote puts health and economic security at risk for millions of present and future Medicare beneficiaries and their families. The FY 2013 House Budget ends Medicare as we know it today by providing people with vouchers that will be insufficient for individuals to buy coverage that they need. This plan balances the budget on the backs of Medicare beneficiaries, half of whom have incomes of $25,000 or less per year, by increasing out of pocket costs for people with Medicare and undermining the guaranteed benefits required to serve a population with high rates of multiple chronic conditions. People with Medicare already have enough skin in the game and cannot afford more. On average, Medicare households spend 15 percent of their incomes on health care costs, three times as much as non-Medicare households.

While proponents of the House budget argue Original Medicare is still a viable option under their plan, this is highly unlikely. Private plans would attract healthier beneficiaries and because Original Medicare provides superior coverage and flexibility to those who are sick, it would likely attract those in serious need of care. This would result in higher premiums under Original Medicare for all of its beneficiaries, even those enrolled before vouchers take effect in 2023.

Furthermore, the budget cuts over $800 billion in Medicaid funding and block grants the program. Millions of people with Medicare rely on Medicaid for long term care and such drastic cuts would result in reductions in payments to Medicaid providers, cuts to benefits, and changes in eligibility rules. This means it will be more difficult, and in some cases, impossible for older adults and people with disabilities to access important long term care services, including those that allow them to stay in the community and in their homes.

Lastly, the House budget does nothing to control the underlying cause of rising Medicare spending, which are rising costs in the health care sector overall. Medicare is more efficient and has a lower per enrollee growth rate than its private counterparts. From 2002 to 2009, Medicare spending grew by 4.6 percent per enrollee compared to private health insurance, which grew by 6.7 percent for similar benefits. This is partially the result of low administrative costs under Original Medicare that private insurers are unable to match.

This is not an effort to preserve Medicare for future generations as much as it is an effort to dismantle it. After all, what is the purpose of the Medicare program if it does not provide adequate coverage for the people it serves?

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Medicare Rights Center is a national, nonprofit consumer service organization that works to ensure access to affordable health care for older adults and people with disabilities through counseling and advocacy, educational programs, and public policy initiatives.


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