Medicare Part D is a voluntary prescription drug benefit that Medicare beneficiaries can purchase to help cover the costs of their drugs.  Medicare Part D, established under the Medicare Modernization Act of 2003, went into effect in 2006.  Previously, Medicare did not offer a prescription drug benefit.  In 2012, almost 65 percent (over 30 million) of Medicare beneficiaries were enrolled in a Part D plan.

Rising health care costs have led policymakers to look for ways to reduce overall spending without affecting the quality of care.  Two proposals, aimed at saving the Medicare program money, that are receiving attention are: 1) allowing the federal government to negotiate with drug companies for lower prescription prices and 2) restoring drug manufacturer rebates (discounts) for coverage provided to low-income beneficiaries.

The National Committee to Preserve Social Security and Medicare has endorsed the Medicare Drug Savings Act (S. 740, H.R. 1588), introduced by Senator Rockefeller and Representative Waxman.  This legislation would require drug manufacturers to pay rebates for the drugs used by individuals who are dually eligible for both Medicare and Medicaid and for people receiving the Medicare Part D Low-Income Subsidy (LIS).  Drug manufacturers provided rebates for the dual eligible population prior to the enactment of the Medicare Modernization Act of 2003, which established the Medicare Part D drug benefit.  The Congressional Budget Office (CBO) estimates that this bill would save $141 billion over 10 years. 

On April 10, 2013, President Obama submitted his Fiscal Year (FY) 2014 budget to the Congress. This budget proposes a total spending level of $3.78 trillion in FY 2014 and calls for over $1 trillion in budget reductions that include some unacceptable proposals. This paper summarizes some of the key proposals affecting seniors in the President's FY 2014 budget.

Since passage of the Affordable Care Act (ACA), Republicans have accused Democrats who voted for health care reform of "cutting" Medicare. At the same time, Republicans in the House of Representatives have supported three Republican budget resolutions, introduced by House Budget Committee Chairman Paul Ryan (R-WI), that retain the same savings in Medicare spending while repealing the Affordable Care Act's Medicare improvements.

The House Budget Resolution for Fiscal Year 2014, H. Con. Res. 25, was introduced by Budget Committee Chairman Paul Ryan and passed by the House of Representatives on March 21, 2013.  It would end traditional Medicare, make it harder for seniors to choose their own doctors, and increase health care costs for both current and future retirees.  Chairman Ryan's plan privatizes Medicare and achieves savings for the federal government by shifting costs to Medicare beneficiaries.

In 2013, Representative Paul Ryan (R-WI) introduced legislation that would end traditional Medicare and put seniors at the mercy of private insurance companies, dramatically increasing their health care costs and limiting their choice of doctors.

As Congress moves forward to deal with the debt limit, the sequester, the Fiscal Year 2013 Continuing Resolution and the Budget for Fiscal Year 2014, the National Committee to Preserve Social Security and Medicare, along with the vast majority of Americans of all ages and political affiliations, urges Congress to oppose all efforts which would adversely affect Social Security, Medicare and Medicaid beneficiaries today and in the future. 

Medicare is the principal source of health insurance coverage for nearly 48 million Americans, over 39 million Americans ages 65 and older and 8 million disabled workers who have been receiving Social Security benefits for two years or longer. Medicare is a comprehensive package of health care insurance.

Congressional deliberations about how to address the nation's long-term deficit include proposals for means testing Medicare - that is, requiring higher-income beneficiaries to pay more of Medicare's costs.