Thank you to Dr. Reischauer and Dr. Blahous, our two public trustees for joining us here today. I believe it’s been a few years since you’ve been before this Committee, and I look forward to hearing your thoughts on the Medicare program’s financial status.
As in the past, my Republican colleagues have used this hearing to continue harping on Medicare’s supposedly dire finances and scaring the public into believing that Medicare is going bankrupt.
Well, I’ve been outside this morning, and I can assure you that the sky is decidedly not falling. The latest Trustees Report projects two additional years of solvency - to 2026 - and that’s pretty healthy by historical standards.
Additionally, the Affordable Care Act is improving conditions across the Medicare program. Projected Medicare spending is down from where we were headed before the ACA. Before the ACA we projected spending would reach 11.4 percent of GDP in 2082 and this year it’s down to 6.5 percent in 2087. The long-term 75-year deficit has also improved, dropping from 3.88 percent in 2009 to 1.11 percent in 2013, a 72 percent decline.
The ACA is also resulting in historically low health care spending rates. Per capita Medicare spending growth was only 0.4 percent in 2012 and national health expenditures grew only 3.9 percent in 2011 - the third straight year of slower growth. And these rates are expected to remain low throughout the decade. These are a result of the initiatives within the ACA and initiatives it has catalyzed throughout the country. Providers and insurers have gotten the message loud and clear: they need to transform into high-value, efficient providers if they want to compete in the health care system of the future.
While all of this good news won’t keep my Republican colleagues from playing Chicken Little, I’d like to remind them that repealing the ACA - their singular goal for the last three years - would actually put the program on worse financial footing. The last estimate from the actuaries said that repeal would shorten solvency by eight years. It would also increase beneficiary costs, and eliminate benefit improvements such as free preventive services and closure of the Part D donut hole.
So, rather than using this year’s Trustees Report to invoke panic and fear, rather than using it to justify shifting costs onto beneficiaries or undermining the program in the name of solvency, I challenge my colleagues to think bigger. Let’s figure out how to ensure Medicare is an efficient program that provides a quality benefit to those who rely on it.
While I support improvements to the Medicare program, I reject calls to slash the program in order to “save" it. Let’s give the ACA - and its delivery system reforms - the chance to work. After all, the sky isn’t going anywhere tomorrow, either.
