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Medicare News
Medicare '45 Percent Rule' Attacked by Families USA
Before Annual Trustees Report
Health care consumer advocates fear drastic action to
be triggered by 'faulty rule'
 March 29, 2007 Anticipating drastic actions that
will impact people on Medicare resulting from the Medicare Trustee's
annual report due to be released by May 1, the Families USA
organization has released a report detailing why the "45 percent
threshold" has no "real significance." Current law mandates the
government take corrective action when the trustees project that 45% of
the program must be financed by the general fund.
"The upcoming Medicare Trustees report is expected
to project that, by the year 2012, more than 45 percent of Medicares
total funding will come from general revenues," says Families USA.
"Under the 2003 Medicare Modernization Act (MMA),
this projection will trigger a series of specific steps to deal with
this so-called 'problem.' A closer look, however, reveals that this 45
percent threshold has no real significance. Moreover, addressing this
non-existent problem could do serious harm to Medicare beneficiaries and
distract policymakers from honest discussions about how best to
strengthen Medicare," the group states.
After the trustees issue the warning, the President
is required to propose policies in the following years budget that are
designed to reduce general revenues as a share of Medicare costs below
45%, according to Families USA.
Congress must consider these proposals from the
President. Such proposals would include some combination of reductions
in benefits under Part B and Part D, increases in Part B and D premiums,
or, ultimately, a cap on the amount the government will pay per
beneficiary, regardless of that persons health care needs.
"In his 2008 budget proposal, the President hinted
at his plans: He proposed an across-the-board cut in Medicare to address
a future 45 percent warning. If implemented, these policies would raise
the costs and reduce the availability of health care for seniors and
people with disabilities," they say.
The document prepared by Families USA says:
"Proponents of the 45 percent threshold claim that
it is supposed to act as an early warning system to identify problems
with Medicares costs and affordability. But as a warning system, it is
fundamentally flawed in at least three ways:
● It fails to recognize that Medicare is covering more outpatient
services, rather than hospital care.
● It makes unnecessary and erroneous assumptions about the federal
budget and our spending priorities.
● It violates basic accounting principles by not allocating interest from
the Medicare Part A Hospital Insurance Trust Fund to the Medicare
program.
"Such a meaningless measure should not be the
catalyst for policy decisions, which could have a potentially
devastating effect on the health care of millions of seniors and people
with disabilities."
>>
Click here for a pdf copy of the analysis by
Families USA
Families USA says it is the national organization
for health care consumers. It is a nonprofit, nonpartisan organization
that advocates for high-quality, affordable health care for all
Americans. Web site:
www.familiesusa.org
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