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Congressman
Paul Ryan
Medicare is the cornerstone on which all other government health programs rest. Unfortunately, the deteriorating financial conditions of this program are threatening beneficiary access to its benefits. In fact the 2009 Medicare Trustees Report recently reported that the trust fund financing virtually all Medicare initiatives will be insolvent by the year 2017.
At the same time, other government health programs are growing at unsustainable rates and threatening to overrun many state budgets. If left unreformed, these health care costs will impose a crushing financial burden on our economy and fail in their promise to provide core benefits to those in the most need. One of the most important issues for Congress to focus on is managing the skyrocketing costs of health care and setting the Medicare program back on the path of long-term fiscal sustainability.
FY2010 Presidential Budget
Recently, President Obama released his fiscal year 2010 budget. While I applaud the President’s commitment to health care reform, I have serious concerns about the direction he has chosen. Without providing any specifics, his budget proposes to spend $634 billion on health care of which half is paid for by increasing taxes. The other half is paid for by cutting payments to benefits such as Medicare Advantage plans, Home Health programs, and Medicaid drug rebates. Further, the President’s budget implies a massive expansion of federal involvement over health care management. Leaving aside the problems the already exist within programs such as Medicare and Medicaid, it is irresponsible to propose massive expansions of deeply flawed government bureaucracies without requiring any reforms in return. I believe in the promise of health care security that Medicare and Medicaid offer and I believe it is Congress’ job to make sure these programs meet that mission. Unfortunately, the President’s proposed budget falls dramatically fall short of that goal.
That is why I have proposed an alternative approach to reforming our health care system. My bill,
A Roadmap for America’s Future would put patients and doctors in control of health care decisions. It fundamentally changes the mechanics of Medicare and Medicaid while strengthening the promise of health care and retirement security for all Americans.
A Roadmap for America’s Future
For more than a decade, legislation has been offered in Congress attempting to address Medicare’s financial shortcomings. Some proposals suggest comprehensive reform while others address only specific issues. While these initiatives have met with mixed results, none have addressed the underlying problem responsible for our current situation. The third-party-payer, first-dollar-coverage health care model that drives Medicare spending no longer meets the needs of patients, doctors, hospitals, and governments. Earlier this year, I comprehensive health care reform legislation that redesigns Medicare, protects beneficiaries access to health care services, and restores the fundamental relationship between doctors and patients.
My proposal preserves the current Medicare system for those individuals who are 55 years or older. While the program’s fiscal crisis demands change, I do not believe it is appropriate or necessary to force these reforms on seniors who are retired or nearing retirement. For those who are under age 55, my proposal restructures the way in which beneficiaries interact with Medicare to provide them with more direct control over health care decisions while fulfilling the program’s of health care security.
Beginning in the year 2019, Medicare will provide seniors who turn 65 that year with a voucher of at least $9,500 to purchase a health care plan of their choosing. For those seniors who are sicker, the amount of the voucher will be increased to account for the increased medical costs they will incur. Additionally, low-income seniors will also receive additional assistance to cover their out out-of-pocket costs. Seniors will receive a booklet of Medicare approved plans along with their voucher to assist them in deciding which coverage option to choose. This will be similar to the
Medicare & You pamphlet that beneficiaries already receive each year under the current program. Seniors would not be limited to the plans listed in this manual, but would have the freedom to choose any plan they find that fits their needs. Beneficiaries would receive a new voucher every year with its value increasing to keep pace with changing medical costs.
Medicare has provides millions of seniors every year with access to essential health care services. But unless Congress takes action to help reign in out of control spending and reform the program’s outdated policies, Medicare will not be there to provide future generations the same health care security it offers today. I look forward to working with my colleagues in Congress to address these serious issues and restore the promise of Medicare.
Medicare Reimbursements for
Physicians
Under current Medicare law, doctors providing health care services to Part B enrollees are compensated through a “fee-for-service” system, in which physician payments are distributed on a per-service basis, as determined by a fee schedule and an annual conversion factor (a formula dollar amount). The fee schedule assigns “relative values” to each type of provided service. Relative value reflects physicians’ work time and skill, average medical practice expenses, and geographical adjustments.
Medicare law requires that the conversion factor be updated each year. The formula used to determine the annual update takes into consideration the following factors:
• Medicare economic index (MEI)–cost of providing medical care;
• Sustainable Growth Rate (SGR)–target for aggregate growth in Medicare physician payments; and
• Performance Adjustment–an adjustment ranging from -13% to 3%, to bring the MEI change in line with what is allowed under SGR, in order to restrain overall spending.
Every November, the Centers for Medicare and Medicaid Services (CMS) announces the statutory annual update to the conversion factor for the subsequent year. The new conversion factor is calculated by increasing or decreasing the previous year’s factor by the annual update. Since 2003, Congress has chosen to override current law in order to prevent reimbursements from being cut as a result of the formula. In 2008, physicians were expected to receive a 10.1 percent decrease in Medicare reimbursements. On December 19, 2007 Congress acted to prevent this significant cut in physician reimbursements that severely threatened beneficiary access to doctors. Unfortunately, this legislation only provides funding to stave off this cut though June 30, 2008.
In 2008, physicians were expected to receive a 10.1 percent decrease in Medicare reimbursements. On December 19, 2007 Congress acted to prevent this from happening, but unfortunately, the legislation only staved off this cut though June 30, 2008. Congress recently considered legislation to extend this relief, but it has encountered multiple bureaucratic hurdles that have prevented it from being signed into law In early June, the Senate considered the first proposal to prevent these reimbursement cuts. The legislation, however, would have required cutting more than $13 billion from seniors Medicare Advantage benefit. As a result, while physician payments would have returned to normal, nearly 2.3 million seniors would have lost access to these plans. Fortunately, this proposal failed and the Senate resumed negotiations on a bipartisan basis to produce a more reasonable proposal.
Despite reports of the Senate arriving at a compromise that would receive overwhelming bipartisan support, new legislation was rushed to the House floor with provisions virtually identical to the proposal that had previously failed in the Senate. Worse, this legislation, H.R. 6331, was introduced in the dead of night without discussion or hearings by any of the House committees. In addition, this proposal relied upon faulty budgetary gimmicks and massive cuts to Medicare Advantage programs. Hopeful that a clean compromise would emerge to protect physicians from payment cuts, I voted against this bill. Despite my opposition, H.R. 6331 passed the House and later passed Senate.
While I certainly agree with the President’s concerns about the provisions in this bill, it appears this legislation will be the only attempt Congress will make to prevent the impending cuts in physician reimbursements. If these cuts were allowed to go into effect, Congressional inaction would drive doctors to drop their Medicare patients, threatening seniors’ access to essential health care services. This is unacceptable, and that is why I have voted to override the President’s veto of H.R. 6331.
The scheduled payment cuts reflect the acknowledged unsustainability of Medicare, which currently has an unfunded liability of $34 trillion. While it is unacceptable to let Medicare costs continue to spiral out of control, getting our fiscal house in order should not come at the expense of doctors and providers of health care. Rather than passing temporary fixes, I would prefer to address the more important matter of the wholesale reform to the Medicare reimbursement system. People should be paid for the work that they do and physicians should not have to wait on Congress to act every year in order to prevent pay cuts that are arbitrarily determined by an outdated formula. Fundamental reforms to Medicare and our broken health care system are urgently needed, and I will continue to push my colleagues to taking on this challenge.
Additional Information.
For more information on Medicare, please refer to the following
web sites:
Medicare
Information: www.medicare.gov
or 1-800-MEDICARE
Medicare Part D Plans in Wisconsin
Medicare
Enrollment Data
A
Roadmap For America's Future: http://www.house.gov/ryan/roadmap
www.americanroadmap.org
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