By the TSCL Legislative Staff
The "sticker" shock of higher than expected Medicare Part D costs for many seniors last January could be a preview of what lies ahead. The 2003 drug legislation which was billed as the biggest expansion in the history of Medicare also greatly expanded out-of-pocket costs for millions of seniors from rich to poor. In addition to adding a drug benefit, it will make some seniors pay more for the doctors' and outpatient care starting next year, and already makes all beneficiaries pay more every year for the Part B deductible.
A Medicare "train wreck" is imminent and many advocates, including TSCL, are pressing Congress to take immediate action to prevent a disaster. The funding for Medicare Part D is made up in part by premiums paid by beneficiaries that go to the drug plans, and payments made by the states to the federal government to cover dual eligibles who formerly received their drugs through state Medicaid programs. There are hundreds of billions in costs, however, that must come from the general federal revenues —cash resources that the federal government must now borrow. The growing financial deficits create enormous pressure to cut the program.
Legislative initiatives to cut Medicare Part D and other Medicare spending are in fact well underway. In addition, Congress is considering multiple proposals that would further increase costs for beneficiaries. Last December the Congressional Budget Office (CBO) examined the following options to cut government Medicare spending:
- Raise premiums or co-payments
- Go to a "premium support" system (which could cap the amount the government contributes for care)
- Gradually raise the eligibility age for Medicare from 65 to 67
TSCL is fighting proposals that would raise seniors' Medicare costs, and is working for a more fair and adequate annual Cost of Living Adjustment (COLA). We encourage any senior having problems getting the Part D prescription drug coverage, or with other Medicare costs, to contact their Members of Congress and ask for their help. Every Member of Congress has staff that helps resolve problems constituents may have in receiving promised government benefits. Please let them know how high health care costs are affecting you and ask them to support measures to protect seniors for higher costs in the future.
Source: "The Long-Term Budget Outlook," CBO, December 2005, pages 32 - 34.
March 2006
