The following is the statement of Ron Pollack, Executive Director of Families USA, about this year’s Medicare Trustees report:
“This year marks the second consecutive year that the Trustees Report has predicted that more than 45 percent of Medicare’s total funding will come from general revenues by the year 2013. Under the 2003 Medicare Modernization Act, this means that the President will now be required to propose policies in next year’s budget to reduce general revenues as a share of Medicare’s overall costs.
“This 45 percent threshold is completely arbitrary, but correcting this so-called 'problem' risks doing serious harm to Medicare beneficiaries. It will undoubtedly lead to attempts to reduce benefits, increase premiums, or cap the amount Medicare will pay per beneficiary.
“The trigger is fundamentally flawed, as it fails to recognize how health care and Medicare are changing. Medicare, like all health insurers, is paying for more outpatient services, and by design, these services are paid for primarily by general revenue. In addition, the Medicare Part D prescription drug program, which began last year, is funded primarily from general revenues.
“In addition, the trigger has no relationship to the so-called solvency of the Part A Trust Fund. The Trustees now project that the Trust Fund will be exhausted by 2019.
“Projections of when the Trust Fund will be exhausted have varied dramatically over the past 15 years—from as early as 2001 to as far in the future as 2030. They are highly dependent on projections of economic growth, Medicare policies, and overall health care costs.
“Nonetheless, the current projection shows the need to address Medicare’s financial future thoughtfully, especially as the population ages. This trigger should not be the catalyst for policy decisions that would have a potentially devastating effect on the health care of millions of seniors and people with disabilities.
"In the end, the debate about Medicare’s fiscal status should focus on implementing sensible cost-saving measures throughout the program that do not harm beneficiaries and ensure continued access to affordable, high-quality health care.”
