Fix for Medicare, Medicaid: Fairness

By Ethan Rome – Executive Director, Health Care for America NOW!
National Journal
September 27, 2011

President Obama says he will veto any proposal that cuts Medicare benefits without asking the richest Americans and corporations to pay their fair share and help the nation make real progress on the deficit.

The President also made it clear that if there are changes made to Medicare and Medicaid, they must not betray the fundamental commitment our country has made to the seniors, people with disabilities and children who benefit from both programs.

We’re skeptical that Republicans will drop their extremist ideology regarding these programs.

The Republicans have staked out their position and dug in pretty deep. The want to eliminate Medicare and Medicaid as we know it. The want to strip seniors of new drug benefits and preventive care provided by the Affordable Care Act. The Republican Ryan budget would raise costs for Medicare beneficiaries by more than $6,000 in its first year. The average Medicare beneficiary’s contribution to the cost of Medicare benefits would skyrocket from 25 percent under the existing system to an astonishing 68 percent in 2030, according to the Center for Economic Policy Research and the Congressional Budget Office.

The Republicans would also decimate Medicaid, leaving it to the states to manage this program and starving it year after year with more than $1 trillion in cuts over the next decade. Without a strong Medicaid program, America will turn its back on millions of children and people with severe mental and physical disabilities who are unable to care for themselves.

So how do we achieve real savings in these programs? One way is to have pharmaceutical companies chip in. Before Congress passed the Medicare drug benefit, drug manufacturers were extending Medicaid rebates to dually eligible Medicare beneficiaries, but that requirement was lifted with the creation of Part D. Reinstating this discount would be a commonsense move. We can’t afford to give such a gift to Big Pharma.

Today’s budget hawks like to gloss over the fact that President Obama and congressional supporters of the Affordable Care Act (ACA) made significant progress toward protecting Medicare’s long-term health. The ACA took on waste, fraud and abuse in the system and made wise improvements, particularly in experimenting with new payment systems and incentivizing quality. Instead of demonizing these steps with empty political rhetoric, the Republicans and others should give these policies time to work.

Medicare’s actuary credits the ACA with extending Medicare’s trust fund by eight years and reducing hospital trust fund costs by one-quarter over the next 25 years. Those are significant achievements in saving money without cutting benefits. We need to find new ways to reduce costs, not shift them, especially in the worst economy since the Great Depression.

The No. 1 goal right now is to create jobs. When it comes to health care in particular, it’s important to remember that health care is an engine of job growth and one of the bright spots in recent economic reports. Medicare and Medicaid not only provide life-saving care to more than 100 million people in those programs, they generate millions of good jobs, none of which can be shipped overseas. Cutting Medicaid alone by one-third would cost up to 1.7 million jobs nationwide, according to an analysis by Families USA.

Any cuts to these essential health care programs would endanger the health of our parents, families and neighbors and put the livelihoods of hardworking Americans at risk – with grave consequences for economic growth. Public opinion polls show that clear majorities of Americans agree with the administration’s approach.

The only way the super committee can pass a rational, balanced plan would be to increase revenue from corporations and the wealthy. That’s why the administration is demanding that millionaires, billionaires and big corporations pay their fair share.

Click here for the full story.