Sebelius: Health Reform Will Reduce Medicare Costs, Coverage Threats

John Commins, for HealthLeaders Media , August 28, 2009

HHS Secretary Kathleen Sebelius continues to press the need for healthcare reform with the release this week of a new government-sponsored report that highlights the escalating cost of healthcare and the threats to coverage for seniors.

The report, America's Seniors and Health Insurance Reform: Protecting Coverage and Strengthening Medicare, said healthcare reforms will strengthen and protect Medicare coverage.

"Senior citizens have seen their premiums and out-of-pocket drug costs rise and without reform, many seniors on Medicare could lose access to the doctor they know and trust," Sebelius said. "Health insurance reform will protect the coverage seniors depend on, improve the quality of care and help make Medicare strong."

The report identifies several problem areas for seniors, including:

  • Overpayments to private plans: A typical older couple in traditional Medicare will pay almost $90 next year on average to subsidize private insurance companies who are not providing their health benefits. Health insurance reform will eliminate these overpayments.

  • High prescription drug prices: Health insurance reform will cut the drug costs that seniors have to bear in the "doughnut hole" by 50%.

  • Imminent doctors' payment cut will limit access: Because of a flawed system for paying physicians, Medicare is scheduled to reduce its fees by 21% next year. According to a recent survey by the American Medical Association, if Medicare payments are cut by even half that amount, or 10%, 60% of physicians report that they will reduce the number of new Medicare patients they will treat, and 40% will reduce the number of established Medicare patients they treat. Health insurance reform will stop this cut and ensure seniors can continue to see their doctor.

  • Preventing Medicare from going bankrupt: The Medicare Hospital Insurance Trust Fund is projected to be exhausted in eight years, sometime during 2017. Health insurance reform will reduce overpayments to private plans and clamp down on fraud and abuse to bring down premiums for all seniors and extend the life of the Medicare trust fund by five years.

John Commins is a senior editor with HealthLeaders Media.

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