Protect Medicare: Reject Paul Ryan’s Budget Proposal

Statement of Judith Stein, Executive Director, Center for Medicare Advocacy

Nothing new. Paul Ryan’s “new” budget proposal recycles ideas that will harm older people, people with disabilities, families and Medicare. It is a plan about a governing philosophy, not about saving money, preserving Medicare, or reducing the national deficit.

We know we need action to keep Medicare strong and viable. However, turning it into a private voucher system, as Mr. Ryan proposes, would end Medicare’s promise and increase out-of-pocket costs for the program’s 50 million beneficiaries. Mr. Ryan’s proposal only pretends to protect the program for future generations – that’s why it has already been rejected by most Americans.

The Center for Medicare Advocacy has long offered real solutions to ensure Medicare’s solvency, without shifting costs to beneficiaries or leaving them on their own to negotiate with private insurance companies. The Center’s solutions would save billions of dollars, help beneficiaries, and maintain the integrity of the Medicare program. Here’s what we suggest:

1.  Extend Drug Rebates to Medicare Beneficiaries who Qualify for Medicaid or the Part D Low-Income Subsidy

Low-income dual eligible people (people eligible for both Medicare and Medicaid) comprise one-fourth of all Medicare drug users, and are among the most costly beneficiaries. Because Medicare, rather than Medicaid, covers most of their drugs and because Medicare cannot negotiate drug prices, their drugs are not eligible for the same rebates as they were, and would be, under the Medicaid program. According to a 2012 Congressional Budget Office report, aligning Medicare drug payments with what Medicaid pays, just for low-income beneficiaries would save $137.4 billion over ten years.[1]

2.  Negotiate Drug Prices with Pharmaceutical Companies

The pharmaceutical industry gained 50 million potential new customers when Medicare began covering prescription drugs in 2006, but drug companies did not have to adjust their prices in return. In fact, the 2006 law prohibits Medicare from negotiating what it pays for drugs. Repealing this prohibition and requiring negotiations has the potential to save up to $30 billion annually.[2] It’s time to end this seven year give-away to prescription drug companies and require them to negotiate with Medicare. The Veterans Administration does it. Big companies like Walmart do it. Medicare should too.

2.  Stop Paying Private Medicare Plans Anything More Than Traditional Medicare

According to the Medicare Payment Advisory Commission (MedPAC), Medicare pays, on average, 10% more for beneficiaries enrolled in private insurance (Medicare Advantage or MA plans) than for comparable beneficiaries enrolled in traditional Medicare.[3]  These private plans do not better serve enrollees and should not be paid more to offer Medicare coverage.

4.  Include a Drug Benefit in Traditional Medicare

Offering a drug benefit in traditional Medicare would give beneficiaries a choice they do not have, encourage people to stay in traditional Medicare rather than joining more expensive private plans, and save money for Medicare and taxpayers.

5.  Lower the Age of Medicare Eligibility

People between 55 and 65 who are not disabled are currently unable to enroll in Medicare. Lowering the age of eligibility to also enroll this younger population would add revenue to Medicare from people who generally cost less, as they need less health care than older beneficiaries.

6.  Let the Affordable Care Act Do Its Job

The Affordable Care Act includes many measures to control costs as well as models for reform that will increase the solvency of the Medicare program and lower the deficit while protecting Medicare's guaranteed health care benefits.

The way to protect Medicare is not to destroy its intent ­­– to protect older people, people with disabilities, and their families, from illness and related financial ruin. The Center for Medicare Advocacy offers six real solutions. On the other hand, Mr. Ryan again proposes a private voucher system. His plan would unravel Medicare, leave its beneficiaries and their families adrift, and continue unnecessary, wasteful overpayments to private companies. There are ways to preserve and strengthen Medicare for future generations, but Ryan’s recycled voucher plan is not one of them.

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Please contact Lauren Weybrew at lweybrew@douglasgould.com or call 646-214-0514 if you’d like to speak with a representative of the Center for Medicare Advocacy. Learn more about the Center for Medicare Advocacy, Inc. at https://www.medicareadvocacy.org

Judith Stein is the founder and executive director of the Center for Medicare Advocacy, Inc. and has been focused on legal representation of older and disabled people for more than three decades. She has been lead or co-counsel in a number of federal class action lawsuits and individual cases challenging improper Medicare policies and denials. She was recently appointed to the Congressional Commission on Long Term Care by House Minority Leader Nancy Pelosi.

The Center for Medicare Advocacy, Inc., established in 1986, is a national nonprofit, nonpartisan organization that provides education, advocacy and legal assistance to help older people and people with disabilities obtain fair access to Medicare and necessary health care. We focus on the needs of Medicare beneficiaries, people with chronic conditions, and those in need of long-term care. The organization is involved in writing, education, and advocacy activities of importance to Medicare beneficiaries nationwide.

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