Calls Continue For Major Medicare Changes

Calls Continue For Major Medicare Changes

New TSCL Poll:  70% Oppose Medicare Overhaul

Despite cutting Medicare by more than $600 billion over the past two years, the program remains the target of Congressional deficit reduction plans.  Budget experts are pressing Congress to move — and soon — to avoid a fast-approaching federal budget crisis that could erupt by year end.

Proposals are under debate that would transform Medicare from a program that guarantees coverage for a fixed set of benefits, to one that guarantees a fixed federal payment to cover a portion of beneficiaries' healthcare expenses.  According to a new poll conducted by TSCL, seniors overwhelmingly oppose the widely - debated Medicare plans.  Seventy percent of respondents said Medicare should not be changed, and only 13 percent supported changing the system.

The proposals would transform Medicare into a system of "premium support," under which beneficiaries would receive a fixed amount of money to purchase their Medicare coverage.  Proposals differ in how the payments for beneficiaries would be determined, and whether the Medicare fee-for-service system would remain a choice.  Plans also differ in the extent to which the federal government would cap the contribution per beneficiary, as well as protections for low-income beneficiaries.

Proponents say competition between plans could help reduce spending.  But the Congressional Budget Office and Medicare's Chief Actuary have said that, while the proposals would save the federal government money, the main risk is in setting premium support levels too low.  If that occurs, beneficiaries would have to pay a larger portion of their income to cover costs than they already do under current law.

Medicare Part B premiums are one of the most rapidly growing costs that seniors have.  Since 2000 Medicare premiums have grown as fast as gasoline prices.  A TSCL survey conducted in the fall of 2011 indicates that seniors already spend a significant portion of their Social Security benefits on Medicare costs.  Thirty-six percent reported spending up to $299 a month, a sum that’s about one quarter of today’s average monthly Social Security benefit.  Another 27 percent of respondents to the survey reported spending up to $599 a month, about half of the average monthly Social Security benefit.

"Plans to further cut Medicare just don’t add up," says TSCL Executive Director, Shannon Benton.  "Over the past two years, Congress has cut Medicare by one of largest amounts in the history of the program," she notes.  "But that savings was not set aside to ensure Medicare’s financing," Benton says.  TSCL believes that should not be allowed to occur. "Before squeezing any more money out of beneficiaries, we believe Congress should be putting the squeeze on Medicare fraud, waste and abuse," Benton says.  To learn more about Medicare cuts contained in healthcare reform legislation, see "How Did the Supreme Court Decision About the Affordable Care Act Affect Medicare?"

Sources:  Estimated Cost of the Affordable Care Act, Congressional Budget Office, March 11, 2010.  Estimated Impact of Automatic Budget Enforcement Procedures in the Budget Control Act, Congressional Budget Office, September 12, 2011.