Congratulations, Mr. Chairman, on taking the reins of this Subcommittee. I enjoyed working with you on trade matters, and look forward to working with you to improve Medicare and other health programs. Certainly, there will be times when we agree to disagree, but I hope we will find common purpose as well.
Republicans often assert that Medicare is outdated and needs reform, but they ignore the substantial progress we’ve already made to strengthen this essential program. The ACA reduces Medicare spending, extends its solvency, and brings growth in per patient costs to record lows. Preventive services are now free of charge to beneficiaries, and we finally have laid the groundwork to reward treatment value over volume. Yes, further improvements are needed, but much of the current Republican proposals will do more harm than good.
Benefit restructuring specifically to generate savings - whether in the name of deficit reduction, paying for other initiatives, or simply masquerading as “reform," is bad policy and bad politics. It may be tempting, when running the numbers and calculating the averages, but it is all too easy to lose sight of the very real people whose lives and wellbeing hang in the balance.
For example, we’ve long sought to add catastrophic coverage to Medicare. If it is combined with a unified deductible to offset the change, it inevitably will mean raising costs for roughly four of five beneficiaries. Moving to a combined deductible of $500 or more will more than triple the current Part B deductible. A surprising number of beneficiaries have costs below $500 and so would pay monthly premiums for benefits they don’t use. Meanwhile, the catastrophic cap almost certainly will need to be set at such a high level that it will benefit only a few - probably five percent of beneficiaries or fewer.
These challenges become even more complicated if cost-sharing is reconfigured by creating new co-pays or increasing co-insurance for current services like hospital visits and home health services. And given that the average beneficiary makes only $22,500 annually and already spends disproportionately more on health care than a younger person, additional premium cost is unreasonable. At a minimum, benefit “redesign" would require a substantial expansion of the Medicare Savings Programs to ensure affordability for lower-income Medicare patients.
