Tuesday, December 08, 2009
Cutting waste will protect Medicare
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Bill Kallio
Kallio lives in Richmond and is the state director for AARP Virginia.
AARP has been fighting for affordable health care for older people for 50 years. We want to thank Rep. Tom Perriello for his vote in favor of better health care for every Virginian by voting in favor of H.R. 3962, the Affordable Health Care for America Act. The House bill takes a large step toward making health care more affordable and accessible for everyone.
As state director for AARP Virginia, I represent more than 1 million AARP members in the commonwealth. In Virginia, more than 996,000 people depend on Medicare for health care coverage. Nearly 12 percent of Virginia's population is over age 65.
There has been much discussion about the various components of the bill. Some well-intentioned people also are spreading some misinformation about the proposal that AARP endorsed.
AARP is fighting for legislation that protects traditional Medicare benefits and holds down out-of-pocket costs. Removing waste and inefficiency from Medicare is critical to saving Medicare money and making sure it is financially sound for future retirees.
AARP is dedicated to protecting traditional Medicare benefits and ensuring it is there for future generations. We also want to preserve consumers' ability to choose their doctor, and make sure Medicare pays doctors fairly.
Some reform opponents have interpreted a report by the Centers for Medicare and Medicaid Services to mean that H.R. 3962 would negatively affect Medicare provider reimbursement rates. The CMS actuary's analysis on Medicare payment rates relates primarily to three types of health care providers -- hospitals, nursing homes and home health agencies.
The House health care reform bill includes Medicare savings measures supported by the nation's largest hospital associations. The other providers are nursing homes and home health agencies, which traditionally enjoy high profit margins and still benefit from yearly pay raises.
By tying these pay raises to the productivity increases in the economy overall, these providers will still get billions more in funding over the next 10 years. The House reform plan would continue to allow people to receive the services they need, without padding excessive profit margins.
For example, Medicare is paying billions of dollars in subsidies to private insurance companies that cover some Medicare patients in Medicare Advantage plans, costing the government 14 percent more per patient. When these subsidies were created, they were supposed to be temporary -- private insurance companies said that over time, they could "do more with less" than traditional Medicare. Instead, the subsidies increased. We can save Medicare billions of dollars and make sure patient care isn't taking a back seat to insurance companies by reducing these subsidies.
The House plan would provide $502 billion in savings by cutting fraud, abuse and waste in the Medicare program. While this seems like a large cut, it represents only 7.1 percent of Medicare spending over the next 10 years.
Savings to the Medicare program will be plowed back into the program in the form of improvements to the overall program under the House health reform plan. For example, it would close the Medicare Part D "doughnut hole," where 27 percent of all Virginia Medicare beneficiaries find themselves every year. It also would provide preventive benefits at no cost to beneficiaries, would better reward high-quality providers of Medicare services and would provide additional money to fighting fraud and abuse in the Medicare program. Most of these savings are consistent with recommendations from the nonpartisan, independent Medicare Payment Advisory Commission.
Passing the House health care plan was a step in the right direction, but the fight isn't over. AARP members will continue to work with our members of Congress to make sure any final health care bill means people who have worked hard their whole lives will feel secure that they will have the health care they need, when they need it.
