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Issue Position: Reform Medicare and Medicaid to Improve Health Care

Issue Position

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Reform Medicare to be Sustainable for the Long-Term

Medicare is a program in crisis. According to an analysis by the Urban Institute, a single-earner couple earning the average wage will pay $60,000 in Medicare benefits over their lifetime but receive $357,000 in benefits.48 A program that continues to pay out far more than it collects is simply unsustainable. CBO wrote that the program will be insolvent by 2020.49 And instead of shoring up Medicare for future generations, ObamaCare took $500 billion from the program to create even higher levels of unsustainable entitlement spending.50

According to CBO's own calculations, repealing ObamaCare will reduce the cost of health insurance premiums and reduce federal spending on health care.51 But total repeal of Obama's unconstitutional health care law is only the beginning. More steps are needed to ensure Medicare's sustainability, along with continually improving quality health care available at a lower cost.

Lawmakers like Rep. Paul Ryan, Sen. Tom Coburn, Sen. Jim DeMint, and Sen. Joseph Lieberman have recognized the importance of tackling Medicare's fiscally unsustainable future and put forward serious, credible proposals that deserve to be fully considered and debated as the nation moves forward to reform Medicare.

Viable Medicare reform options must keep our promises to those at or approaching retirement age, they must ensure the long-term solvency of the program, they must address the enormous fraud and waste that plague the current system, and empower individuals to make choices that best fit their needs in a competitive marketplace.

In particular, Medicare reform options include gradually raising the age of Medicare eligibility (alongside the gradual increase in the full retirement age under Social Security); adjusting Medicare benefits to be paid on a sliding scale based on the income of the recipient; and giving Medicare recipients more control to choose the plan that best fits their unique, individual needs through bundled premium support payments directly to the individual or as a credit against the purchase of health insurance coverage offered through the program.
Gradually Raise the Eligibility Age for Medicare

Just as recommended for Social Security, advances in medical technology and innovation have allowed Americans to lead longer, more productive lives today than ever before. As a result, full retirement and eligibility for programs like Medicare and Social Security must adapt to reflect these changes and the viability of the program going forward.
Empower Consumers While Reducing Fraud and Waste

The adage that nobody spends someone else's money as carefully as they spend their own is certainly true in Medicare where estimates of fraud and waste are often thought to meet or exceed $100 billion annually, or 10% of Medicare spending.52 Giving Medicare recipients greater control over their health care dollars not only empowers these individuals to choose the coverage and care that best meets their needs, but also puts an important check against fraud and waste when those dollars belong to people, not a bureaucracy. Whether Medicare benefits are bundled with other payments to retirees, or simply applied to the purchase of health insurance coverage, the value of the benefit is transparent to the recipient.

Medicaid Rolls Expanding
Return Medicaid Responsibility to States to Increase Health Care Quality and Access

Medicaid was originally designed as a safety net for the poorest of the poor, but it has since grown to the point where it can no longer provide quality care or ensure health access to those who need it most.53 Due in part to the recent economic downturn, Medicaid rolls have been increased dramatically, increasing from 42.3 million in June 2007 to over 50 million in July 2010.54 The system is rapidly approaching a breaking point.

The current administration's response to the myriad problems facing Medicaid has only made matters worse. Instead of working to find a sustainable path for Medicaid, the president has dramatically expanded the program, far beyond its original intention, trapping 25 million new patients in a system where they struggle to access quality health care.55

The one-size-fits-all approach that the federal government has applied to Medicaid has failed. The best solution for those in need of access to quality health care is to return responsibility for achieving the original goals of Medicaid to the states using the 1996 welfare reform law as a model. States simply must have the flexibility to design and administer health programs in ways that address the unique challenges faced by each individual state. Instead of the federal government confiscating money from states, taking a cut off the top, and the sending the money back out with limited flexibility for how states can actually use it, individual states should control the program's funding and requirements from the very beginning. Medicaid must be reformed to better serve patients and taxpayers.

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