Robert Greenstein
2008-03-26 07:00:00.0
Current rank: Not ranked

WASHINGTON -

Policymakers cannot solve Medicare’s problems in the absence of larger reform throughout the U.S. health care system that lowers costs to the extent possible and — in particular — slows the rate at which health care costs increase in the future. The needed reductions in projected Medicare costs cannot be achieved in isolation from changes that address health costs systemwide unless policymakers are willing to institute increasingly draconian cuts in health care for tens of millions of elderly and disabled Medicare beneficiaries who cannot afford to buy large amounts of supplemental health care on their own.

This does not mean that policymakers can or should do nothing to make changes in Medicare itself to restrain the program’s costs. For example, federal policymakers have established an impressive expert advisory commission to advise them — the Medicare Payment Advisory Commission — which has recommended an array of Medicare economies and efficiencies. Faced with intensive lobbying by the health insurance industry and other health care industry interests, however, Congress and the president have failed in recent years to enact many of MedPAC’s recommendations.

Most egregious is their failure to adopt MedPAC’s long-standing and most significant recommendation — to halt the massive overpayments to private insurance companies in the Medicare Advantage program (the privatized part of Medicare). MedPAC reports that these companies are paid 13 percent more on average than it would cost to treat the same patients under regular Medicare, and the Congressional Budget Office estimated last year that MedPAC’s proposal to pay the insurance companies the same (rather than more) than it costs to treat the same patients in Medicare would save about $150 billion over 10 years.

Read the full statement at: www.cbpp.org/3-25-08health-stmt.htm.