Commonsense Reforms

Greenspan is correct. Action must begin today to avert a catastrophic collision between Medicare and bankruptcy tomorrow. Today’s elected leaders have a moral obligation to current and future generations of Americans to begin to confront the challenge.

As the senior Republican on the House Budget Committee, Congressman Ryan crafted an alternative budget for Fiscal Year 2008 that balances by 2012, addresses the runaway growth of entitlement spending, demands accountability in other government spending, and helps maintain a strong economy. Unfortunately the Ryan plan was ignored by the majority in Congress in favor of a budget that does nothing to acknowledge the increasingly dire condition of Medicare’s finances.

Some positive steps have been taken by Congress in recent years, however, that may present a foundation for future progress. In 2003, a Republican-led Congress passed the Medicare Modernization Act (MMA) to start the process of addressing Medicare’s troubling trends by emphasizing prevention and personal choice and utilizing the health care market place. The MMA created a prescription drug plan designed to lower out of pocket costs for Medicare beneficiaries and ease financial pressures on the parts of Medicare supporting hospitals and doctors.

The reforms implemented in 2003 recognized an important fact: in the long run, investing in the technological advancements of modern medicine to keep beneficiaries healthy saves money and resources that would have been used when a beneficiary becomes ill. It’s more efficient to support preventative drugs than long hospital stays. While criticized for its high cost projections at the time, the program is now expected to cost significantly less than originally estimated by Washington’s static-minded budget forecasters who rarely take into account the positive impact of markets when making their calculations.

Last year, the premium for the drug plan, originally expected to average $37 a month, averaged only $24 per month. The reason? Competition and freedom. Seniors can chose from a variety of drug plans to meet their specific health care needs. The declining costs were recently noted in the annual Medicare Trustees report.

The other reform passed in 2003 was Medicare Advantage, private health plans which provide greater flexibility and choice—beyond traditional Medicare—for things like specialized care and preventative medicines. Medicare Advantage now has 8.3 million beneficiaries enrolled, the majority of which are urban poor seniors, rural seniors, and minorities. One of the most notable achievements of Medicare Advantage is its success in coordinating care for seniors with chronic illnesses like diabetes, which is a huge driver of Medicare’s cost.

Regrettably, instead of being emulated, these effective reforms have been under attack in Congress this year. The House, in fact, targeted Medicare Advantage at one point with $157 billion in cuts that would have left 3 million seniors without coverage. Fortunately that plan has at least temporarily been abandoned.

Republicans recognize more government control will do nothing to head off the financial tsunami that looms on the horizon for the entire health system. Rather, solutions must be found that emphasize individual choice, competition, greater access and flexibility—a more patient-centered health care system, rather than a one-size-fits-all government program. We believe reforms should put each American at the center of his or her health care decisions, maximizing personal freedom and control and keeping the heavy hand of government intervention to a minimum.

As Congressman Ryan puts it:

“Do you trust Washington with your money to make personal decisions for you or do you trust individuals to make them for themselves? I would argue, and I think the evidence is clear, that when individuals make the decisions for themselves, when they’re spending their own money, when they’re talking to their doctor and making decisions on their own treatments, with affordable insurance, that the system’s going to be far better, people are going to be much more satisfied, and we’re going to save a lot more money and we'll have healthier outcomes.”

In their report, the Medicare Trustees concluded with this lucid piece of advice: “Prudence dictates action sooner rather than later to address these fiscal challenges.”

Let’s hope decision makers in Congress start listening soon. For Medicare and future generations of Americans, the work must begin today.