10 Years Later: A Look at the Medicare Prescription Drug Program

As policy makers continue a dialogue on seeking Medicare savings, today Joe Baker, President of the Medicare Rights Center, testified before the Subcommittee on Health of the U.S. House Committee on Ways and Means. Specifically, Baker commented on proposals to shift costs to people with Medicare, including those that would:

  • increase the Medicare Part B deductible;
  • introduce home health copayments; and
  • expand the number of people with Medicare subject to higher income-related Part B and Part D premiums while further increasing those premiums.

Today, half of all people with Medicare—25 million older adults and people with disabilities—are living on annual incomes of $22,500 or less, and the average person with Medicare already spends 15 percent of their household income on health care costs. Faced with higher costs, beneficiaries living on fixed incomes are forced to make decisions on the basis of cost—not the basis of need. Almost 40 years of data consistently demonstrates that, while higher out-of-pocket costs certainly deter health care utilization, they deter utilization of needed care as well as unneeded care indiscriminately.

As an alternative to cost-shifting, Baker presented several recommendations to sustain Medicare for today’s beneficiaries and future generations through cost-saving solutions, including:

  • advancing delivery and payment system innovations;
  • restoring Medicare drug rebates; and
  • eliminating wasteful overpayments to Medicare Advantage (MA) plans.
Read Testimony