By Kathleen Sebelius and Doris Matsui
May 17, 2011
Today, nearly 48 million people – our parents, grandparents, neighbors and friends – rely on Medicare for the medical treatments and prescription drugs they need to get healthy and stay healthy. For nearly half a century, the program has freed a generation of Americans from the fear that sickness or injury would cost them their life savings. In doing so, Medicare has made America a stronger, more prosperous nation.
But that doesn't mean Medicare can't be improved. There are critical gaps in coverage, especially for prescription drugs. And Medicare continues to face rising costs.
In the last year, we've seen two very different proposals for how to address these challenges. And it's clear that there is a right way to reform Medicare and a wrong way.
The first plan was put forward in the health care law passed by Congress and signed by President Barack Obama a little more than a year ago. It begins by making some immediate improvements to Medicare benefits.
For example, we know that as many as one in four Medicare beneficiaries may have gone without their medications at some point because of sudden out-of-pocket costs created by the coverage gap commonly called the doughnut hole. That's just not right.
So beginning this year, people with Medicare in the doughnut hole are getting a 50 percent discount on covered brand-name drugs as a result of the health care law. In just its first two months, this program saved the average person in the doughnut hole nearly $800. And by 2020, the doughnut hole will be closed completely.
We also know that too many seniors go without critical preventive care such as cancer screenings because they can't afford these services. Thanks to health care reform, seniors no longer have to pay any co-pays and deductibles for key preventive screenings such as mammograms. And they'll also be able to get a free annual wellness visit.
At the same time, the health care law is putting Medicare's finances on a more sustainable path to preserve Medicare for this generation and generations to come.
We are giving law enforcement unprecedented new tools and resources to fight fraud and abuse, already saving the program more than $4 billion in 2010. And we are gradually reforming the way we pay for care so that we reward the highest quality care. A recent report from the Center for Medicare and Medicaid Services found that the administration's actions will save $120 billion for Medicare over the next five years.
This is one plan for Medicare's future: improving benefits and slowing growth in costs by reducing waste and promoting more effective patient care.
But we've recently seen a very different plan proposed and passed by House Republicans. Instead of strengthening the Medicare program, House Republicans voted to end Medicare as we know it by turning it into a voucher program. Then, in order to bring costs down, the amount of care paid for by vouchers would be capped and would grow more slowly than the cost of care.
This is simply shifting the cost of care from Medicare to seniors themselves. In fact, the independent Congressional Budget Office has estimated that, in order to get the same health benefits that seniors rely on today, the average person with Medicare would pay $6,400 more a year for their care once the new plan begins. Shockingly, the Republican proposal would, in a little over 10 years, leave seniors paying more than double their own health costs, from $6,150 to $12,500, on average.
Even worse, this plan would do nothing to close the worst gaps in coverage or address what's really driving up Medicare costs, which is the growth in the underlying cost of health care.
Now is not the time to turn Medicare into a private insurance company voucher program. Instead, we should continue with our plan to strengthen the Medicare that seniors depend on with better benefits and better, more effective care.
Kathleen Sebelius is secretary of the U.S. Department of Health and Human Services. Doris Matsui is California's 5th Congressional District representative, who serves as the co-chair of the congressional task force on seniors.