U.S. Representative Stephen Horn On...

Keeping Medicare Strong

   Medicare is one of the great success stories of our time. Each year, this program provides essential health care for nearly 40 million senior citizens. It is, without question, one the most important programs in the federal budget.

   Three years ago, Congress and the President took steps to help insure that this program continues to operate effectively. We toughened efforts against waste and fraud. We expanded benefits for the elderly to get preventive care. And we gave seniors more choices in picking the health plan that was right for them.

   These steps have helped assure the immediate future of Medicare. But we need to do more – we need to cover prescription drugs, for example. And we need to make certain that Medicare will always be there for our seniors.   

   With projected spending of more than $212 billion this year, Medicare makes up roughly 11 percent of the federal budget and it is among the fastest growing programs as our population ages and requires more intensive health care.

    The steps we took in 1997 have assured the Trust Fund's solvency until at least the year 2016.  At the same time, seniors were given more choices under the plan approved by Congress. This plan lets seniors voluntarily choose the Medicare program that is best for them -- whether it is the traditional fee-for-service plan, a provider-sponsored organization, a medical savings account (included as a pilot project for 390,000 seniors), a health maintenance organization, or a preferred provider organization. 

   Seniors also gained increased preventative coverage including pap smears, mammography screening, prostate cancer screening, colorectal cancer screening, and diabetes self-management. Tough new anti-fraud and anti-abuse efforts were implemented to continue our crackdown on Medicare waste that cheats taxpayers. Medicare is modernized through cost-savings measures, malpractice reform, expanded health care options for rural America, and improved consumer protections.

   While these reforms helped secure the future of Medicare, they also had unintended consequences as some provisions cut too deeply into reimbursements for health care providers.

   To address this concern, Congress voted to increase payments to Medicare providers by approximately $12 billion over the next five years. These provisions were included in the Fiscal Year 2000 District of Appropriations bill, which the President has signed into law.  Specifically, the measure:

• provides hospitals with greater flexibility to participate in Medicare as critical access or sole community hospitals and includes a number of provisions designed to strengthen and increase flexibility for critical access hospitals;
• offers Medicare beneficiaries more flexibility through Medicare+Choice (M+C) by (1) authorizing incentives for health care providers that do not currently offer managed care plans; (2) allowing M+C beneficiaries an open enrollment period if they learn their plan is ending its contract; (3) slowing the implementation of M+C payment rates to more accurately reflect differences in per enrollee costs; and (4) allowing beneficiaries more time to enroll in M+C or Medigap plans when health plans withdraw from their market;
• eases the financial burden on hospitals that care for a disproportionate share of low-income individuals;
• permits the Health and Human Services Secretary to provide hospitals with additional payments to cover certain high cost cases, as well as transitional pass-through payments (for orphan and cancer therapy drugs and new medical devices);
• includes a number of measures designed to ensure the availability of home health care services;
• increases payments for medically complex skilled nursing facility patients;
• increases access to prostheses, cancer fighting drugs, and ambulance services;
• adopts a more equitable structure for direct Graduate Medical Education payments to teaching hospitals nationwide;

• adjusts the payment system for existing long-term and psychiatric hospitals through increased improvement and bonus payments through Fiscal Year 2002;

• increases payments to hospice facilities that care for terminally-ill patients;

• increases Medicare’s payment rate for the clinical laboratory component of pap smear tests;

• extends Medicare’s coverage of immuno-suppressive drugs to help improve kidney and other organ transplant survival rates;

• modifies the way doctors are paid for treating patients to improve the accuracy of physician payment updates.