Budget Proposals Look to Medicare for Savings & Shift Costs to Beneficiaries

Budget Proposals Look to Medicare for Savings & Shift Costs to Beneficiaries

Both the House and Senate released their budget proposals for fiscal year 2016 in mid March. Both proposals aim to balance the budget within 10 years, repeal the Affordable Care Act, support major cuts to domestic programs including Medicare and turn certain entitlement programs such as Medicaid and food stamps into state-run block grants. The House budget, however, is more intent on overhauling current systems where as the Senate budget does not divulge how the cuts would take place. In terms of Medicare changes, the House budget proposes dramatically restructuring the Medicare program into a voucher system by 2024 where beneficiaries would buy insurance in a privatized market. This is similar to Representative Paul Ryan’s proposal several years ago. It would also combine the Medicare Part A and B deductibles, thus increasing out-of-pocket costs for most beneficiaries. While the Senate does not endorse this radical change to a voucher system, it does call for $430 billion of cuts to Medicare without specifying the details.

Earlier this year the President also released his proposed budget (see our article Review the Good & Not-So-Good Highlights of the President’s 2016 Budget). We support several aspects of his budget, such as closing the Part D coverage gap 3 years earlier, by 2017 instead of 2020, and requiring drug manufacturers to give prescription drug rebates to beneficiaries with the Part D low-income subsidy that are at least as good as Medicaid rebate levels. Yet we also oppose several proposed items that increase beneficiary costs. This trend of increasing beneficiary costs continues to be seen in numerous proposals, including those on restructuring some of the Medigap plans. While we support viable ways to reduce Medicare spending, such as through fraud prevention efforts and ensuring Medicare pays a fair and negotiated price for drugs, we do not support shifting costs to beneficiaries. Over 50% of our country’s more than 52 million Medicare beneficiaries have annual incomes under $23,500 and a quarter live on $14,400 or less. Most of our country’s elders are on fixed incomes and tight budgets; if health care costs go up, other necessities such as food and housing suffer.

Please join us and let your Congress people know that shifting costs to beneficiaries is not acceptable or a viable solution for millions of our elders. This year 2015 is Medicare’s 50th anniversary. Let’s celebrate Medicare by staying true to Medicare’s mission/vision and protecting this system of providing quality health care coverage to all beneficiaries.

Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.