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The Trustees Report and the Need for Action

June 22, 2016
4:56 pm

On a day in which the House Republicans are announcing their alternative health reform plan, House Democrats are staging a sit-in over gun laws, and the presumptive presidential nominees are firing insults at each other, it’s understandable if the annual issuance of the Medicare Board of Trustees report gets a little lost in the mix.

It’s a report quite worthy of attention, though, because its pages contain more than one call to action.

First, the trustees are now projecting that the Medicare program will reach insolvency in 2028, two years earlier than last year’s estimate.  This is not an insignificant change.  Think of the time required to enact comprehensive health reform, from the Nixon Administration’s efforts in the early 70s to the Affordable Care Act signing in 2010, or the decades spent trying to bring a prescription drug benefit to Medicare.   Twelve years may seem like a considerable amount of time to make Medicare financially sustainable and reliable for future generations but, in legislative terms, it’s not long at all.

We need serious discussions on how to modernize and strengthen Medicare.  The successes of the Medicare Advantage and Medicare Part D prescription drug programs provide sound examples lawmakers can use in shaping the future.  Those programs have utilized consumer choice and competition as drivers to provide high-quality care at reasonable costs.  And, in fact, the Congressional Budget Office has concluded that bringing those choice-and-competition qualities to Medicare as a whole would reduce program spending and beneficiary out-of-pocket costs.

The Medicare Trustees report sends a clear signal that this discussion shouldn’t wait.

Another important aspect of the trustees report concerns the Independent Payment Advisory Board (IPAB).  Many expected projected spending levels in this year’s report to trigger IPAB into action.  That wasn’t the case, although that threshold is expected to be reached next year.  Congress shouldn’t wait until then to make this bad idea go away for good.

Over 500 organizations representing patients, healthcare providers and employers have written to Congress already, pointing out that a mechanism which shifts power from elected representatives to unelected appointees would do significant damage to Medicare beneficiaries and the healthcare system as a whole.  By making harsh, arbitrary cuts to Medicare payments to healthcare goods and services instead of focusing on bringing greater value to the program, quality and access would be adversely affected.

No, the Medicare trustees didn’t flip the switch to activate IPAB this year, but it’s an imminent problem and it needs to be addressed sooner rather than later.