Senate Aging Committee Hears Changes to
Medicare Unpopular with Senior Citizens, Voters
First hearing of this Congress lays out the
problems and the options with a focus on fixing the cost of healthcare
28, 2013 - The first hearing by the Senate Special Committee
on Aging since the leadership was handed to Sen. Bill Nelson (D-Fl) and
ranking member, Susan Collins of (R-Me) took on the challenge of
Medicare’s future yesterday. But, rather than a doom-and-gloom hand wringing, it
was an earnest, straight-forward approach at helping the popular senior
program survive with little or no damage to its services.
Sen. Collins, it her opening statement, said,” The
real key to getting Medicare costs under control is to get health care
costs under control. Today, the United States spends 18 percent of its
gross domestic product on health care, more than any other
industrialized county. Yet we lag behind other nations on many measures
This was close to the line expressed by all the
speakers at the hearing, who discussed the options available for change
and their suggestions on solutions.
Chairman Nelson noted there was good news
“According to the Congressional Budget Office,
federal spending on Medicare has been significantly lower than predicted
over the past three years,” he said in his opening statement.
“Medicare spending in FY2012 grew by just 3%, to
$551 billion, according to CBO. That represents the slowest rate of
growth since 2000.
“While this is great progress, we all know
financial challenges lie ahead. As more and more baby boomers retire and
health care costs continue to rise, Medicare spending could reach $1
trillion by 2023.
“We’re making progress, but we know we can do
The hearing received a briefing by Juliette
Cubanski, Ph.D., Associate Director, Program on Medicare Policy, The
Henry J. Kaiser Family Foundation, on the current situation of Medicare
based on empirical evidence and the attitudes of American voters and
senior citizens toward the program based on polling.
Two points that stood out – Medicare is very
popular with senior citizens and a significant majority of U.S. voters
do not want to see any cuts in the program.
Cubanski also pointed out that “Medicare is
expected to face significant financing challenges due to rising health
care costs, the aging of the U.S. population, and the declining ratio of
workers to beneficiaries.”
And noted that “a number of Medicare proposals have
been made, including:
● restructuring Medicare benefits and cost sharing;
● eliminating “first-dollar” Medigap coverage;
● increasing Medicare premiums for all beneficiaries or those with
relatively high incomes;
● raising the Medicare eligibility age;
● changing from its current defined benefit structure to a “premium
support” system; and
● accelerating the implementation of delivery system reforms (Kaiser
Family Foundation 2013a).
“While policymakers weigh potential Medicare
savings options to reduce the deficit, the public does not perceive a
need for significant cuts,” she said.
“The Foundation’s recent polling shows that a
majority of the public (75 percent) believes that deficit reduction can
occur without major reductions in Medicare spending.
“In fact, 58 percent of Americans say they would
not be willing to see any reductions to Medicare as part of deficit
“When asked about specific proposals to reduce
Medicare spending in the context of deficit reduction, a majority of
Americans expressed support for two proposals:
1) requiring drug companies to give the federal government a better
deal on medications for low-income people on Medicare; and
2) requiring high-income seniors to pay higher Medicare premiums;
these proposals were supported by 85 percent and 59 percent of
“Notably, the survey also shows that relatively few
Americans (roughly two in ten) are aware that wealthier Medicare
beneficiaries already pay higher premiums for their Medicare coverage.
“Other proposals are opposed by a majority of
1) requiring all seniors to pay higher Medicare premiums;
2) increasing the payroll taxes workers and employers pay to help
3) reducing payments to hospitals and other health care providers
for treating people covered by Medicare; and
4) gradually raising the age of Medicare eligibility from 65 to 67
for future retirees.
“These proposals were opposed by 85 percent, 55
percent, 51 percent, and 51 percent of Americans, respectively.”
David Blumenthal, M.D., M.P.P., President, The
Commonwealth Fund, noted that the views he presented are his own and not
necessarily those of the Commonwealth Fund or its directors, officers,
Dr. Blumenthal recognized the cost of Medicare is
forcing policy makers to face a “fork in the road.”
“On one path, policies could be pursued that cut
Medicare payments to providers, reduce the benefits available through
the program, or restrict program eligibility. These policies could
produce program savings, at least in the short run, but they would be
both morally and politically difficult, as they shift costs onto elderly
Americans, renege on historic promises, and raise the prospect of second
class care for a group that is particularly vulnerable.
“Moreover, these policies generally do not address
the underlying causes of the health spending problem, so the payment
cuts, reduced benefits, and restricted eligibility would have to become
increasingly severe over time.
“An alternative - and far preferable - strategy
would support comprehensive payment and delivery system changes that
produce lower costs and better value not just in Medicare, but across
the entire U.S. health system. This path builds on the Affordable Care
Act and continues to lead away from our current fee-for-service
reimbursement system with a set of initiatives that reward providers,
consumers, and payers for choices that improve outcomes and use
“We know this approach is viable, as many
innovative changes of this type are already beginning to emerge on the
health system landscape as the reform law is implemented and both public
and private stakeholders act on the increasing awareness that
reengineering health care is preferable to rationing it.
He concluded by saying, “In summary, it
should be possible to stabilize health care spending growth for both
public and private payers while also improving the performance of the
health system overall and both quality and efficiency of care. Through a
combination of reforming provider payment, engaging consumers to make
high-value choices, and improving the way health care markets function,
with all stakeholders involved and pulling together, we can achieve this
In combination, these policies would lead to wiser
and more efficient expenditures of health care dollars, while also
enhancing the benefits of health care. These policies not only would
strengthen Medicare for today and tomorrow but also make our health care
system as a whole more viable. The resulting savings could be redirected
to other essential uses, both in the public and private sectors.
“In the end, reduced health spending by federal,
state, and local governments and private employers would accrue to
households, which ultimately bear the burden of rising health spending
through higher taxes, reduced wages, or direct out-of-pocket costs.”
Witnesses at the hearing included the following
(click names to read their presentations).
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