Myths and Facts about Medicare changes in Health Care Reform

With so much debate about saving money for health care reform by eliminating waste in the system, you may be wondering if proposed cuts could affect your Medicare benefits.

AARP is committed to holding down premiums and out-of-pocket costs for people in Medicare. Those costs now average about thirty percent of an average beneficiary’s income, and promise to continue to rise. AARP supports a stop-loss protection to cover out-of-pocket costs, which would help people who have a lot of hospitalizations or depend on costly medications such as cancer drugs.

The most AARP expects people to pay for the costs associated with an adequate health insurance package should be ten percent of income (five percent for low-income), including both premiums and out-of-pocket costs.

AARP will fight with the strength of our 40 million members against any legislative proposals that unfairly burden people on Medicare. However, we must lower the cost of health care by finding ways to save Medicare money that won’t undermine care for beneficiaries.

We can start by closing the doughnut hole in Medicare Part D and lowering drugs costs through changes such as, drug price negotiation, safe importation and expanding access to generic drugs, especially biologics which treat the most serious diseases and can cost up to $10,000 per month.

We must also find savings that come from eliminating wasteful spending and fraud that are driving up the cost of health care. Many proposals on the table do just that while working to improve the quality of patient care and keeping Medicare strong and affordable.

In addition, we can change the system we use to pay private insurance companies that cover Medicare patients. Studies show that Medicare is overpaying these plans—by an average of 14 percent per person in Medicare. We want those plans that provide high quality care and good customer service to be rewarded with bonuses, but those that provide poor care should not continue to get extra payments unless they can show that they are improving care.

Today money is too tight for everyone—especially people on Medicare—to be rewarding sub-standard care.

Since cuts to Medicare Advantage (MA) plans may cause them to leave the market, AARP support s phasing in the new payment system to minimize the impact on MA plan enrollees, especially people of limited income, people with disabilities, people in diverse communities and those living in rural communities.

Finally, AARP is working to protect your ability to continue to see the doctor of your choice. As the debate over health care reform heats up, you can expect to be inundated with often false or misleading information by opponents of health care reform, including some providers, pharmaceutical companies and device manufacturers. There are billions of dollars of waste in our health care system and every dollar of that waste is a dollar of someone’s income that they will fight to keep.