Testimony for the Record
Barbara B. Kennelly, President and CEO National Committee to Preserve Social Security and Medicare

United States House of Representatives Committee on Ways and Means Hearing on "The Health Care Law's Impact on Medicare and Its Beneficiaries"

February 10, 2011

Mr. Chairman and Members of the Committee:

I am Barbara Kennelly, President and Chief Executive Officer of the National Committee to Preserve Social Security and Medicare, and I appreciate the opportunity to submit this statement for the record. With millions of members and supporters across America , the National Committee is a grassroots advocacy and education organization devoted to preserving and promoting the financial security and health of maturing Americans.

During Congressional debate on the Patient Protection and Affordable Care Act of 2010, Public Law 111-148, and the Health Care and Education Reconciliation Act of 2010 , Public Law 111-152, collectively referred to as the Affordable Care Act, we at the National Committee and our members and supporters were aware that without changes Medicare would become unaffordable for seniors and the federal government. Already nearly 30 percent of the average Social Security benefit is spent on health care costs, and 14 percent of the federal budget is spent on Medicare. Clearly changes were needed to reduce the rate of increase in both general health care inflation and Medicare spending, as well as to improve the program for beneficiaries.

The Affordable Care Act (ACA), which we support, includes the following provisions among others that will strengthen the future of the Medicare program and improve it for beneficiaries.

Medicare Trust Fund solvency is extended by 12 years. By reducing the rate of increase in provider payments and leveling the playing field between traditional Medicare and Medicare Advantage plans, Trust Fund solvency more than doubles - from 2017 to 2029.

Seniors prescription drug costs are reduced. The ACA fixed a major flaw of the Medicare Part D program, the "donut hole" coverage gap, which the law phases out by 2020. The average beneficiary in the doughnut hole is expected to save $700 this year due to the 50 percent discount on brand-name drugs and the discount on generics contained in the health care reform legislation.

Full coverage for preventive services begins this year. The health reform law's provisions eliminating Medicare out-of-pocket payments for preventive services such as screenings for cancer, cardiovascular problems, and diabetes, began in January 2011. This provides an incentive for beneficiaries to seek early diagnosis and treatment for serious diseases which place the largest burden on the Medicare program.

Medicare Advantage (MA) beneficiaries receive additional protections. The ACA prohibits Medicare Advantage plans from charging seniors more than traditional Medicare for crucial services such as chemotherapy, skilled nursing facility care, and renal dialysis. In the past, some MA beneficiaries have faced substantially higher costs for these and other services covered by traditional Medicare.

Efforts to reduce fraud and abuse are improved. The ACA provides an additional $350 million for anti-fraud activities and gives the government important authority to screen and approve health care providers for the Medicare program.

Mr. Chairman, thank you for holding this hearing today. I hope that my testimony, on behalf of the National Committee's millions of members and supporters who are Medicare beneficiaries, will be helpful in highlighting the beneficiary improvements and protections provided by the Affordable Care Act as well as the provisions to strengthen the Medicare Trust Fund. Continuing to implement provisions of this legislation that control spending and improve quality, such as reducing preventable hospital readmissions and providing coordinated care for beneficiaries with multiple chronic conditions, will strengthen the Medicare program and improve health care services for seniors.

Barbara B. Kennelly
President & CEO