Here is a great article by NC Congresswoman Foxx from her March 6 E-newsletter. She provides great insight into where Medicare is going and bravely calls for Congress to focus on it now. As I've said before, I'm proud to be represented by her!
Medicare heads for iceberg
Some in Congress want to stay the course
Congresswoman Virginia Foxx
Democrat and Republican leadership introduced a bill at the end of February to help stabilize and reform the Medicare system. This important development came as no surprise. The legislation was, after all, the result of what’s known as the “Medicare Trigger”. It’s a mechanism built into the 2003 Medicare law that overhauled and expanded the Medicare system. Basically, the trigger is a gauge of Medicare’s financial well-being.
Before we get to the trigger, some quick background on Medicare:
Medicare is the federal health insurance program for retirement-age Americans.
In North Carolina more than 1.3 million people, or about one in seven North Carolinians, depend on Medicare.
The program’s long-term obligations and rapid growth are contributing to its future meltdown if Congress does not take action.
The Medicare trigger is designed to grab the attention of Congress and force legislative action when the program’s financial health reaches a certain stage. The technical points of the law specify that Congress must act when 45 percent of Medicare spending will be drawn from the federal government’s general tax revenue (as opposed to the designated Medicare trust funds).
But the 45 percent figure is much less important than the facts about Medicare’s long term health. Let me be blunt. Medicare is headed for the proverbial iceberg. In a January 2008 report, the Congressional Research Service said that Medicare spending is poised to soak up more than half of all federal spending and 21 percent of all national health expenditures by 2016.
The Medicare Trustees estimate that Medicare’s unfunded liability—the federal government’s future Medicare funding shortfall—is at least $34 trillion. That’s 34 with twelve zeroes after it, a number that utterly dwarfs the $9 trillion national debt or any other measure of federal spending or deficits. Alternatively, it amounts to $297,000 for every household in America.
Medicare faces an unsettling reality. Today’s beneficiaries will receive their benefits as promised, but tomorrow’s retirees—our children and grandchildren—may not fare as well if Congress sits on its hands. And many in Congress seem prepared to do just that.
USA Today recently reported that the Majority’s proposed 2009 budget “rejects” action on Medicare. An election year decision? Perhaps. But according to the Government Accountability Office, every year of inaction increases federal entitlements’ unfunded liability by about $2 trillion. Frankly, we can’t afford any more “election year decision” on Medicare.
You will need to search long and hard to find an official who is eager to tackle the difficult task of Medicare reform. It is an issue fraught with tough decisions and will require compromise from both sides of the aisle. But difficult decisions are no excuse for ignoring Medicare’s future funding crisis, including the projected zeroing out of the Medicare Part A trust fund in just over 10 years.
Leadership sometimes demands tough decisions for the good of our nation. Getting the ball rolling to create a sustainable Medicare program not only diminishes the pain of future reform, it also helps us keep our promise to tomorrow’s retirees. The Medicare legislation that was recently introduced certainly isn’t perfect. That’s the idea. It is a starting point for discussion and debate.
One area for discussion is the junk lawsuits currently plugging the courts that result in an additional $28 billion in federal medical spending. It comes as no surprise then that many experts say the medical liability system is in crisis. The legislation’s three-pronged approach tackles the issue of medical liability reform; improves medical information technology and pricing transparency; and adds means-tested prescription drug premiums.
Are these the best or only ways to advance Medicare reform? Not necessarily. On the other hand, I support getting this Medicare reform discussion started, no matter the starting point. Medicare certainly won’t fix itself, and the longer Congress sits on the sidelines, the harder it gets to do the job right.
Editor’s Note: Virginia Foxx is a United States Representative from North Carolina’s Fifth Congressional District. You may contact her office toll free at 1-866-677-8968 or e-mail her from her website, www.foxx.house.gov.