June 3, 2011
“The American Academy of Actuaries…urges action to restore the long-term solvency and financial sustainability of the [Medicare] program… Failure to act now will necessitate far more drastic actions later.” (bold in original) --American Academy of Actuaries May 2011
- Who really put an end to Medicare “as we know it”? President Obama and Democrats.
- President Obama and Democrats impose strict controls on both the amount and volume of future Medicare services and payments. Enforcing these controls will be a board of 15 unelected bureaucrats dubbed an “Independent Payment Advisory Board” who will decide which benefits to cut and how much less to pay providers.
- The Office of the Medicare Actuary predicts by the end of this decade Medicare will pay doctors even less than Medicaid pays and, by then, one in seven hospitals will have to leave the Medicare system. So the Medicare Actuary cannot but conclude “large reductions in Medicare payment rates to physicians would likely have serious implications for beneficiary access to care; utilization, intensity, and quality of services.”
- Today, access is a problem for Medicare beneficiaries. A recent AMA member survey reveals nearly a third of primary care physicians already restrict the number of Medicare patients in their practice mainly on account of low and unreliable payment.
- Yet President Obama and Democrats have no plan to avert a crisis they themselves have exacerbated. In fact, the Medicare Trustees just announced Medicare’s Hospital Insurance (HI) Trust Fund will become insolvent in 2024; five years sooner than predicted only a year ago. CBO predicts it could happen even sooner.
- “The projected [Medicare Hospital Insurance] HI deficit over the next 75 years is 0.79 percent of taxable payroll. Eliminating this deficit would require an immediate 24 percent increase in payroll taxes or an immediate 17 percent reduction in benefits—or some combination of the two. Delaying action would require more drastic tax increases or benefit reductions in the future.” (emphasis added)
- Insolvency of Medicare’s HI Trust Fund would be disastrous. According to CMS, “If assets were exhausted, payments to health plans and providers could be made only from ongoing tax revenues, which would be inadequate to cover total costs. Beneficiary access to health care services would rapidly be curtailed.” The Medicare Actuary leaves no doubt: “Medicare beneficiaries would almost certainly face increasingly severe problems with access to care.”
- This looming crisis is not limited to traditional Medicare. Medicare Advantage (Medicare Part C) which leverages private plans to deliver enhanced Medicare benefits likely would be fundamentally harmed. The Medicare Actuary predicts MA enrollment could be cut in half by 2017 if nothing changes. Today, nearly all Medicare beneficiaries have access to an MA plan and nearly a quarter are enrolled in one.
So when Democrats say that House Republicans will end Medicare “as we know it,” they’re just being modest. President Obama and Democrats already ended Medicare last year with their government takeover of healthcare.
For additional information, contact:
The House Republican Conference Policy Office