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Can Competition Among Health Plans Save Medicare? (Press Release)
Alexandria, VA (November 13, 2003) -- Legislation to add a Medicare drug benefit is likely to add new costs to beneficiaries, but may not save Medicare, warns a national seniors organization. "Competition among health plans and traditional fee-for-service Medicare is supported by some as a way to save Medicare," states George Smith, Chairman of TREA Senior Citizens League. "But according to a Congressional Budget Office (CBO) estimate, competition provisions in Medicare legislation would save the government less than $1 billion between 2010 and 2013," (1) Smith notes." Meanwhile, beneficiaries will continue to have rapidly escalating premiums, and are likely to have higher Part B deductibles and new co-payments for services where there are none now." Medicare drug legislation could increase subsidies to private plans to entice them to offer coverage. If subsidies are counted, the CBO estimated that Medicare drug legislation would actually increase Medicare spending between $7.5 to $18 billion. (2) This is not the first time the government has tried to encourage private plans to play a greater role in Medicare. Under the 1997 Balanced Budget Act, the government offered higher reimbursements to Medicare + Choice managed care plans. In the late 1990's, Medicare HMOs were highly popular because they covered prescription drugs, and had low premiums and deductibles. Health plans, however, complained that government reimbursements weren't generous enough. Many plans did not renew their Medicare contracts, and those that remained cut benefits and raised costs to Medicare beneficiaries. "If private health plans can save money, they should be allowed to prove it. Why give them a crutch if they can walk alone?" asks Smith. "Those who argue for competition between private plans and Medicare should accept competition on a level playing field." TSCL is a national group of politically active seniors concerned about the protection of their earned Social Security, Medicare, military, and other retirement benefits. TSCL members participate in a number of grassroots lobbying and public education campaigns designed to ensure governmental bodies, including the Social Security Administration and the Centers for Medicare and Medicaid Services, live up to their commitments. For more free information on this issue and our organization, please contact TREA Senior Citizens League, Department S606Q, 909 N. Washington St., Suite 300, Alexandria, VA 22314, or visit our website at: www.tscl.org. (1) CBO Cost Estimate H.R.1 and S.1, Prescription Drug Legislation, Congressional Budget Office, July 22, 2003. November 2003 | ||||||||
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