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Public Policy: Medicare


As the new 114th Congress begins its work, we've detailed a myriad of legislative priorities which would continue to build and strengthen Social Security and Medicare's historic legacy for current and future beneficiaries. 

The 2014 Medicare Trustees Report shows an improved financial outlook for Medicare, including a four-year extension of the Medicare Part A Hospital Insurance (HI) trust fund, due to implementation of the Affordable Care Act (ACA) and other changes in the health care system.

The Affordable Care Act (ACA) includes important improvements to Medicare prescription drug coverage      (Part D) such as reducing expenses for seniors in the donut hole now and eliminating the gap altogether by 2020.  Seniors receive additional savings each year on their prescription drugs until the donut hole is closed. The ACA also provides additional assistance for low-income beneficiaries.  Since passage of the ACA in 2010, more than 7.9 million people with Medicare have saved over $9.9 billion on prescription drugs.  

Medicare is the principal source of health insurance coverage for over 50 million Americans, including over 8 million disabled workers who have been receiving Social Security benefits for two years or longer. Since the program's inception in 1965, America’s seniors have been able to count on receiving Medicare when they reach age 65. But now, some in Washington who are looking for ways to reduce federal spending want to make seniors wait for up to two additional years - to age 67 - in order to qualify for Medicare.  

For decades, policymakers have debated how much to reimburse private Medicare Advantage (MA) plans for serving seniors.  Currently, the federal government pays MA plans, which cover about 30 percent of Medicare beneficiaries, more per beneficiary than traditional Medicare for providing the same services.  The Affordable Care Act (ACA) gradually levels MA and traditional Medicare payments, saving $156 billion over 10 years.  


The Affordable Care Act (ACA), also referred to as “Obamacare,” includes important provisions to reduce wasteful Medicare spending. This will strengthen the solvency of the Medicare program and reduce the rate of increase in Part B premiums for all Medicare beneficiaries. The ACA also improves the care provided to Medicare Advantage enrollees and limits their out-of-pocket costs. 


H. Con. Res. 96, the House-passed Republican Budget Resolution for Fiscal Year 2015, introduced by Budget Committee Chairman Paul Ryan (R-WI), would achieve savings for the federal government by privatizing Medicare. Beginning in 2024, when people became eligible for Medicare they would not enroll in the current program; rather, they would receive a capped payment to be used to purchase private health insurance or traditional Medicare. This could increase their out-of-pocket health care costs and limit their choice of doctors. 

Congressional deliberations about how to reduce federal Medicare spending, as well as how to pay for preventing a reduction in payments to physicians, include proposals for means testing 

Medicare beneficiaries are being denied access to Medicare’s skilled nursing facility (SNF) benefit because acute care hospitals are increasingly classifying their patients as “outpatients” receiving observation services, rather than admitting them as inpatients. Patients are called outpatients despite the fact that they may stay for many days and nights in hospital beds and receive medical and nursing care, diagnostic tests, treatments, medications, and food, just as
they would if they were inpatients. Under the Medicare statute, however, patients must have an inpatient hospital stay of three or more consecutive days, not counting the day of discharge, in order to meet Medicare criteria for coverage of post-acute care in a SNF.
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