Happy Birthday Medicare!

Jul 30, 2013, 11:02 ET from AARP Illinois

Association Presses for Responsible, Commonsense Solutions to Medicare on Anniversary of Bedrock Program

CHICAGO, July 30, 2013 /PRNewswire-USNewswire/ -- On July 30th, 1965, President Lyndon Johnson signed Medicare into law.  On the 48th anniversary of the program, AARP is sending a strong message to the Illinois Congressional Delegation: We need responsible, commonsense solutions to Medicare, not harmful cuts. Over 1.9 million Illinoisans, 49 million people nationwide, rely on Medicare for their health care coverage.  Currently, politicians in Washington are discussing changes to the program, some of which may negatively impact the benefits that seniors have come to rely on.

"Medicare is a bedrock program that provides health security for 1.9 million Illinoisans.  We cannot simply cut benefits and balance the budget on the backs of individuals who already spend a disproportionate share of their income on health care expenses," added Gallo.  "It is time for Congress to find responsible solutions that will keep Medicare strong without shifting the burden of higher health care costs onto seniors and future retirees."

According to a recent AARP Public Policy Institute report, half of all Medicare beneficiaries spend 17% or more of their household income on out-of-pocket health care expenses.  In 2011, Medicare beneficiaries in Illinois spent, on average, an estimated $3,700 on out-of-pocket health care costs.  The report also cites that traditional Medicare benefits are less generous than a typical large employer health plan, namely because Medicare does not have a cap on annual out-of-pocket spending. In addition, a recent Kaiser Family Foundation report found that 15% of Illinoisans over age 65 are below the federal poverty level when using a supplemental poverty measure that more accurately reflects the financial situation of older adults by deducting health care expenses from income. 

"There is no doubt that Medicare faces a significant fiscal challenge due to rising health care costs and changing demographics," said Bob Gallo, AARP Illinois State Director. "But cutting benefits or forcing seniors to pay more is not the answer.  There is a better way."

AARP is advocating for a variety of solutions that will address Medicare's fiscal challenges, including allowing Medicare to negotiate with pharmaceutical companies for lower drug prices, ending pay-for-delay agreements, improving access to lower-cost biologic drugs, cracking down on waste, fraud and abuse, and improving care coordination.  It is estimated that enhanced care coordination could cut down on unplanned hospital readmissions, which are estimated to cost Medicare $17 billion annually (according to a 2004 report). 

AARP has also publicly endorsed the PRIME Act (H.R. 2305/S. 1123), sponsored by Congressmen Roskam and Carney, which would crack down on the $60 billion lost annually to Medicare waste, fraud and abuse.  The organization also supports the Preserve Access to Affordable Generics Act, sponsored by Senators Klobuchar and Grassley, which would make it illegal for brand-name drug manufacturers to use anti-competitive pay-for-delay agreements to keep less expensive generic alternatives off the market.