Main Category: Medicare / Medicaid / SCHIP
Also Included In: Public Health
Article Date: 29 Jun 2011 – 9:00 PDT
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A bipartisan proposal to save Medicare and lower its debt was revealed today by Tom Coburn (R-OK) and Joe Lieberman (I-CT). They say over $600 billion would be saved over a decade, according to CBO (Congressional Budget Office) calculations, if the proposal goes through. They added that an extra $100 billion would also be saved as a result of employing the program integrity provisions.
Senator Lieberman, said:
“We can’t balance our budget without dealing with mandatory spending programs like Medicare. We can’t save Medicare as we know it. We can only save Medicare if we change it. And that’s what the Medicare Reform Plan Tom Coburn and I are proposing will do. Our plan contains some strong medicine but that’s what it will take to keep Medicare alive, but we believe our plan administers that medicine in a fair way. It asks just about everybody to give something to help preserve Medicare. But it asks wealthier Americans to give more than those who have less.”
(Senator) Dr. Coburn said:
“Our plan recognizes that continuing Medicare as it is currently structured is a financial impossibility. Medicare as we know it may not exist in five years if Congress does not take steps now to preserve the program. Every year we wait makes the inevitable task of structural reform more difficult. I’m encouraged Senator Lieberman has put a serious and significant Medicare reform proposal on the table. I understand these choices are difficult for members of Congress. I would encourage my colleagues to realize our partisan lines in the sand are being washed away by a rising tide of debt. Taking Medicare off the table won’t protect seniors. Doing nothing and letting seniors fend for themselves is the least compassionate and least responsible option. Our plan will preserve Medicare for current and future enrollees by taking important steps to realign the program with its original intent.”
The senators add that:
- By allocating half of the savings from the proposal to the Hospital Insurance Trust Fund, the solvency of Medicare Part A (hospital insurance) can be extended.
- The proposal would reduce 75-year underfunding of Medicare liabilities by approximately $10 trillion, as well as considerably reducing the financial burden of Medicare Part D and Part B on the federal budget.
- Seniors would have a yearly out-of-pocket maximum benefit within the Medicare program. The aim here is to minimize the risk of bankruptcy if they develop a chronic health condition or major illness.
- The proposal contains a three year fix to the Medicare physician reimbursement formula that is paid for and will bring stability and payments to the Medicare provider system, ensuring access for seniors.
- The proposal makes it more likely that Medicare continues being a government program for current and future beneficiaries.
- The proposal would raise the Medicare retirement age to 67 – rising by 2 months every year, starting with those born in 1949, until it reached 67 years by 2025. Wealthy individuals would have to pay more for care.
US lawmakers are trying to find a deal to raise the country’s $14.3 trillion debt ceiling. If no increase is agreed on, the government will have used up its borrowing authority by August 2nd, 2011 – effectively, the US would default on its debts. This would lead to global chaos in the financial markets, with devastating consequences.
The Medicare Trust Fund will probably have served about 48.9 million people by the end of 2011, and approximately 64 million by the end of 2021. It is a major driver of federal spending.
“Saving Medicare: The Lieberman-Coburn Plan”
(Background material detailing the proposal)
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