HEALTH REFORM: Medicare Reform Will Benefit Seniors

November 2, 2009 - 4:32pm

Seniors are a primary target of the misleading rhetoric in the health reform debate. Though the harmful rumors have been proven false time and time again, seniors have had to worry about everything from "death panels" to Medicare cuts. Organizations like the AARP have stepped up to get the truth out to seniors -- health reform will protect Medicare, not diminish it. A recent report from the Center for Budget and Policy Priorities (CBPP), House Health Reform Bill Would Strengthen Medicare, came to the same conclusion. 

The CBPP reports that the House health reform bill would help all beneficiaries, and it highlights the provisions that will improve care for seniors:

Eliminate the "doughnut hole" in the Medicare drug benefit over time. Currently, Medicare beneficiaries have to pay for 100 percent of the cost of their medications once they exceed an initial coverage limit, until catastrophic coverage kicks in. Many seniors who fall in this hole are already struggling to pay their bills -- and when they can't afford their medication, they end up sicker in the long run. CBPP reports that closing the doughnut hole would, on average, lower beneficiaries' out-of-pocket drug spending by providing greater financial protection against high drug costs.

Expand access to preventive care services for Medicare beneficiaries. To enable seniors to get vital preventative care services (such as cancer screenings), the House bill will waive Medicare deductibles and co-insurance for all preventive care services.

Expand eligibility and increase participation in programs that assist low-income Medicare beneficiaries with their premiums and cost-sharing. Many low income Medicare beneficiaries receive additional assistance through from state Medicaid programs, in the form of Medicare Savings Programs (MSPs) and the Low-Income Subsidy (LIS) that help pay for prescription drugs and certain benefits. The House bill would both increase the number of beneficiaries eligible for these programs and make it easier for beneficiaries to enroll and stay enrolled.

Create incentives for health care providers to improve the quality of care they furnish to Medicare beneficiaries. The House bill would change how Medicare pays a variety of health care providers like hospitals, physicians, and nursing homes in order to encourage greater coordination of care that could produce better health outcomes for patients at lower cost. (For more about realigning incentives to promote value in the health care system, check out our Health CEOs for Health Reform paper, Realigning U.S. Health Care Incentives to Better Serve Patients and Taxpayers).

Make Medicare more efficient by modifying payment rates in order to lower costs while maintaining beneficiary access to the providers that care for them. The House bill would eliminate the overpayments that private insurers receive through the Medicare Advantage program. Medicare Advantage pays private insurers, on average, 14 percent more to cover the same beneficiaries through private plans instead of traditional Medicare. This, as well as other payment changes, would produce significant savings that would help pay for the cost of Medicare improvements and the overall health reform legislation. These measures also extend the solvency of the Medicare program by five years.

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