23 Mar 2004 Opponents of 2003 Expansion of Drug Benefits Address New Report on State of Medicare: Medicare Trustees’ Report Expected to Bode Ill for Future of Federal Health Care Benefits

The Medicare Board of Trustees will release their annual report on the fiscal stability of Medicare on March 23. Experts predict the report will not be positive about the long-term solvency of the program. Representatives of organizations opposed to the 2003 drug benefit expansion of Medicare will be available for questions at a Tuesday, March 23 press conference to be held at 3:00 pm in the West Room of the National Press Club (529 14th Street NW, 13th floor) in Washington, D.C.

Representing The National Center for Public Policy Research will be executive director David W. Almasi. To follow is Mr. Almasi’s prepared statement:

The Medicare bill that Congress approved in 2003 had lots of spending on drugs for today’s seniors, but no meaningful Medicare reform for tomorrow’s retirees.

The basic structure of Medicare will likely have a greater impact on a typical American’s retirement than the solvency of Social Security or the type of investments in his IRA or 401(k).

Aside from skyrocketing costs, there are three quality-of-care reasons why the current Medicare system desperately needs to be changed.

First, contrary to popular perception, Medicare isn’t an entitlement to health care for the elderly. Nothing in Medicare says that a beneficiary has a right to be seen by a doctor, or a right to receive an operation, drug or medical device. All Medicare does is entitle doctors and hospitals to get paid, at a rate that Medicare sets, if they provide services that Medicare deems “appropriate” to people covered by Medicare. In other words, Medicare is really an entitlement for the health care industry, albeit one with low prices, lots of rules, caveats and strings attached and literally over 100,000 pages of regulations. There is no guarantee any beneficiary will actually get a specific medical treatment under Medicare.

Second, Medicare provides substandard care, and the cost pressures that will result when the baby boomers retire and the size of the program almost doubles from 40 million to 70 million beneficiaries virtually guarantee that the standard of care will get worse if nothing is done now to change its basic character. Medicare offers an outdated structure of benefits, cost sharing, and limitations and it delivers care in an episodic, fragmented, acute-care fashion. Medicare is looking more and more like an urban public school system – ever more tax dollars go into the program, but the results keep declining.

Third, access to health services for the elderly under Medicare is decreasing and getting care will become harder for future retirees. According to physician surveys conducted for the Medicare Payment Advisory Commission, by 1999, 24 percent of doctors were refusing to take some, or even all, new Medicare patients, and in just the past three years that figure has increase to 30 percent. Another measure: it already takes Medicare up to four or five years to approve new treatments. In the meantime, beneficiaries have to either do without or pay out of their own pockets.

And just because Medicare covers something, it doesn’t follow that a Medicare beneficiary can get it. Take, for example, Vice President Cheney’s widely reported Implantable Cardiac Defibrillator. Under current Medicare rules, an ICD is deemed “medically necessary” for only about 55,000 Medicare beneficiaries. But cardiologists believe a more realistic estimate of the number of beneficiaries for whom an IDC is “medically necessary” is about 270,000. Now, even if we assume that the cardiologists are over-estimating, that still leaves a discrepancy of about 200,000 patients. And remember, this is a serious question of who needs a new device to keep them from suddenly dropping dead!

If current and future retirees alike are going to have a secure retirement, we need to focus on this issue, but quick, and make sure that our congressmen and senators know that we are paying attention.

National Center publications and statements regarding Medicare and Social Security can be found at https://nationalcenter.org/Health.html. For more information, contact David W. Almasi at (202) 507-6398 x106 or [email protected], or visit The National Center website at https://nationalcenter.org.

The National Center is a conservative/free-market think tank established in 1982.