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Fact Sheet: Medicare
Wednesday, April 21, 2004(Updated February 2004)
- Medicare is the nation's largest and most successful health insurance system serving the health needs of 40 million senior and disabled beneficiaries.
- Medicare beneficiaries on average are spending about 20 percent of their incomes for health needs-far higher than younger age groups-particularly for prescription drugs.
- One of Medicare's most important characteristics is that it is a social insurance entitlement and not a welfare benefit available only to the very poor.
- Medicare is very popular: 95 percent of Americans of all ages think it is important that Medicare be preserved for everyone at retirement.
- Medicare is solvent for at least the next 23 years according to the most recent Medicare Board of Trustees report.
- Medicare is financially efficient-administrative costs average only 2 percent of program outlays compared with 25 percent in private small group market plans and 5-6 percent in the large market plans.
- Coverage under private retiree benefit programs, the Medicare + Choice program, and Medigap plans is declining while beneficiary costs are becoming increasingly unaffordable for most seniors.
- Medicare HMOs and PPOs should not be used as the prototype for Medicare changes such as a prescrition drug program.
- Medicare + Choice (M+C) is a failed experiment. A recent study shows that out-of-pocket costs for enrollees jumped 10 percent in 2003, and has increased 101 percent over four years. Additionally, the Medicare preferred provider organization (PPO) demonstration costs beneficiaries more out-of-pocket than even M+C and traditional Medicare.
- The Medicare program does not cover the costs of annual physical exams, dental health, eyeglasses, hearing aids and foot care which are particularly important to seniors.
- Thousands of Americans who are forced to retire before age 65 and who do not have continuing employer health coverage face huge costs for even minimal health insurance coverage.
The
Medicare Law
Under the guise of
providing a prescription drug benefit, Congress
and the Bush Administration have enacted a law
(The Medicare Prescription Drug, Improvement,
and Modernization Act of 2003, P.L. 108-173)
that will lead to the privatization of the
Medicare program (See 15 Reasons Why the 2003 Medicare Law
Fails Seniors). Beneficiaries will be
enticed to leave Medicare for additional
benefits offered by private insurers.
Beneficiaries staying in traditional Medicare
would lose their choice of doctors, experience
increased out-of-pocket costs, experience
disruptions in care and face loss of
benefits
The Congressional Budget office estimates that 2.7 million retirees will likely lose the drug coverage they now have. In 2010, the Medicare program will be forced to compete with private insurers in six metropolitan areas. The insurers will receive significant subsidies to enhance their ability to compete with Medicare. Ultimately, Medicare would no longer be an entitlement but would become a part of the private health insurance market.
Additionally, the law does nothing to control prescription drug price inflation while at the same time it gives unprecedented tax shelters to the wealthy non-Medicare population through the establishment of Health Savings Accounts.
Alliance
Position
The Alliance supports a
strengthened Medicare program with expanded
benefits including a meaningful prescription
drug benefit; annual physical exams, dental
health, eyeglasses, hearing aids and foot care;
affordable home and community-based long term
care; rehabilitative, nursing home and other
vital services, and extended preventive
services without co-payments.
The Alliance supports a prescription drug benefit under Medicare that is: universal, voluntary, affordable, not means-tested but particularly protects low and moderate income persons and those with high out-of-pocket costs, and which includes a system of cost control as well as strong maintenance of effort provisions covering employer provided retiree benefits. A Medicare plan must protect retirees who currently receive drug benefits from their former employers. The new Medicare law does not meet most of these criteria.
The Alliance opposes any premium support, voucher plan or undermining of federal administration of Medicare by turning it, or any part of it, over to insurance companies and other private sector plans.
" target="">15 Reasons Why the 2003 Medicare Law Fails Seniors). Beneficiaries will be enticed to leave Medicare for additional benefits offered by private insurers. Beneficiaries staying in traditional Medicare would lose their choice of doctors, experience increased out-of-pocket costs, experience disruptions in care and face loss of benefitsThe Congressional Budget office estimates that 2.7 million retirees will likely lose the drug coverage they now have. In 2010, the Medicare program will be forced to compete with private insurers in six metropolitan areas. The insurers will receive significant subsidies to enhance their ability to compete with Medicare. Ultimately, Medicare would no longer be an entitlement but would become a part of the private health insurance market.
Additionally, the law does nothing to control prescription drug price inflation while at the same time it gives unprecedented tax shelters to the wealthy non-Medicare population through the establishment of Health Savings Accounts.
Alliance
Position
The Alliance supports a
strengthened Medicare program with expanded
benefits including a meaningful prescription
drug benefit; annual physical exams, dental
health, eyeglasses, hearing aids and foot care;
affordable home and community-based long term
care; rehabilitative, nursing home and other
vital services, and extended preventive
services without co-payments.
The Alliance supports a prescription drug benefit under Medicare that is: universal, voluntary, affordable, not means-tested but particularly protects low and moderate income persons and those with high out-of-pocket costs, and which includes a system of cost control as well as strong maintenance of effort provisions covering employer provided retiree benefits. A Medicare plan must protect retirees who currently receive drug benefits from their former employers. The new Medicare law does not meet most of these criteria.
The Alliance opposes any premium support, voucher plan or undermining of federal administration of Medicare by turning it, or any part of it, over to insurance companies and other private sector plans.