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Our health care system costs too much, wastes too much, makes too many mistakes, and gives back too little value for our money. The costs are continuing to accelerate at an unsustainable rate. Access is uneven. Too often, quality of care depends on where you live. For the wellbeing of all Americans, we need to do better.

The Affordable Care Act of 2010 takes significant steps toward all these goals. But the task of building a better-performing, sustainable health care system will take years. AARP believes we should preserve the best of our current system—including choice of doctors and treatments—even as we adopt reforms.

We all share a responsibility to resist wasteful and unnecessary health care costs. Individuals can promote their own health by eating right, exercising and following medical instructions. Doctors should be careful stewards of costly health care resources and base treatments on the best evidence. The government and private insurers can spur better care through policies and incentives that reward doctors for good results. Government also should establish valid, easily understandable measures of provider performance.

Employers should continue to offer coverage or contribute to its cost. Insurers must comply with the new law and stop denials of coverage due to pre-existing health conditions. Similarly, providers of supplemental Medicare insurance should also be required to provide coverage to seniors who have pre-existing conditions. The practice of age-rating insurance premiums for those in the under-65 individual market will be limited under the Affordable Care Act, resulting in more affordable premiums for most older persons.

Ultimately, the nation will need a long-term, stable revenue source to pay for health care, so everyone has access to decent coverage and care of the highest quality. The costs of health reform should be shared fairly.

Strengthening Medicare

Medicare is the foundation of health security for older Americans. Strengthening Medicare and ensuring it will be there for future generations is a major priority. This requires eliminating waste and containing costs.

ACA Strengthened Medicare

The Affordable Care Act took important steps to strengthen Medicare. The law will improve guaranteed benefits for prescription drugs, by phasing out the “doughnut hole” – the costly gap in coverage reached by people with high drug costs. It also improved coverage of preventive services, including screenings for major disease, and added an annual wellness checkup. The Medicare trust fund was extended for almost an additional decade.

Rising Costs in Health Care System Are the Problem

Rising costs in the broader U.S. health care system are the main factor driving up Medicare costs and projected deficits in the federal budget. Medicare benefits are not the culprit. Big cuts to Medicare benefits or payment levels will only cause suffering and shift costs, without solving the fundamental problem of health care inflation.

Medicare Needs to be Improved

Medicare still has noteworthy limits that ultimately should be addressed. Over time, and as budget realities permit, Medicare should add benefits for vision, dental and hearing services, which private insurers routinely provide to younger Americans. Medicare also should expand its extremely limited coverage for long-term services and supports, and it should improve mental health benefits. AARP supports a cap on annual, out-of-pocket medical costs in Medicare to protect seniors from unaffordable out of pocket costs.

AARP calls on Medicare Advantage plans to continue to offer consumers competitive benefit packages. We support bonus payments for the best plans, as a way to encourage quality and competition in the marketplace.

Congress must establish a permanent solution for setting physician payments in Medicare. Continuing uncertainty over payment levels could discourage some doctors from participating in the program, reducing seniors’ access to health care.

Savings Proposals Should Improve Efficiency and Eliminate Fraud but Must Maintain Quality and Choice

Even as we encourage these needed measures, AARP recognizes that rising costs in the broader health care system are putting pressure on the U.S. budget. These rising costs, along with expensive advances in technology and the aging of baby boomers, mean that reforms to Medicare will have to be considered.

Savings proposals should zero in on waste and fraud, and seek to increase efficiency, while maintaining quality and choice. The Affordable Care provides increased resources aimed at fraud prevention. Medicare must be preserved as a program of social insurance, serving all of society. Reforms must not reduce fundamental protections, saddle beneficiaries with out-of pocket costs they cannot afford, or unfairly squeeze the middle class.

Medicare Can Lead the Way

Medicare should lead the way in creating a better health care system, driving system-wide reforms

of service delivery to achieve both better effectiveness and better efficiency. It should use its vast purchasing power to spark innovation and best practices throughout the entire health care system. For example, Medicare should link doctors’ reimbursement to measures of quality. It should create incentives to reward preventive care and coordination among health care professionals.

Under the Affordable Care Act, Medicare will be testing projects that seek to enhance patients’ treatment through better coordination of care, improved teamwork among medical professionals and incentives to reduce unplanned hospital readmissions. As lessons are learned from these projects, we want to see them applied throughout the whole health care system.

Access for All

To make expanded coverage meaningful, we must remove barriers to care that harm the less-affluent and certain racial and ethnic communities. A shortage of primary care providers in many urban and rural areas continues to keep health care out of reach for many, unfairly dividing our society between health care haves and have-nots.

AARP advocates a national effort to build a larger, culturally competent health care workforce to fill the gap in primary care and the shortages of those trained to deal with the special needs of older patients. Medicare can lead the way by requiring greater accountability for hospitals that receive Medicare funding to train doctors, to ensure the right balance of primary care providers and specialists is produced. But meeting the health care needs of all communities will also require a greater role for non-physician healthcare professionals. Unnecessary limits on Advanced Practice Registered Nurses are an unwise barrier to primary care. State and national policymakers should review rules that limit nurses and other clinicians from working up to the full extent of their education and training.

In addition, AARP opposes actions by employers to cut back post-retirement health benefits. Such benefits should be considered a continuing obligation to all retirees, including those who leave the workforce as a result of a layoff or buyout.

Containing Cost

Congress and the Administration should mount ongoing efforts to contain health care costs in a way that is fair to all. There is no silver bullet. Efforts to wring out waste, increase efficiency, improve the use of medical information, manage chronic illness more effectively, avoid medical mistakes and promote healthy personal behaviors are all part of the answer. Continued cost growth for health care, increasingly threaten household budgets and discourage individuals from going to the doctor or filling prescriptions. More broadly, these costs negatively impact our national economic vitality.

Doctors must be more efficient stewards of costly care. They should be aware of medical evidence of effectiveness in recommending treatments, while making sure patients understand they are getting the care they need. Payment systems should be overhauled to encourage quality and discourage wasteful uses of costly technology

Enhancing Quality

The needs of patients should occupy the very center of the health care system. Patients should enjoy the benefits of safe, state-of-the art practice, no matter where they live. Patients and caregivers should be “in the loop” of communication with medical professionals. Health information technology should be expanded as a tool to help doctors and patients make good decisions, with adequate safeguards for individual privacy. Payment systems should reward doctors for good outcomes and not simply for volume of treatments.


Prevention makes sense for individuals and society, and we as a nation should do much more to reap the benefits. People can reduce their risks of costly illness by making the right personal choices, such as eating healthy food, getting exercise and not smoking. Doctors should be compensated for efforts to prevent illness and promote health. Insurance should fully cover recommended screenings and immunizations. Older patients should make use of new provisions in the Affordable Care Act that cover 100% of the cost of important health screenings and an annual wellness exam.

Making Sure Drugs are Affordable

Drugs often cost more than patients can afford, particularly brand-name medications that have patent protection. AARP advocates several ways to combat rising costs. Research comparing different drugs could help doctors make cost-effective decisions on what to prescribe. Generic versions of expensive biologic drugs used for various illnesses, including rheumatoid arthritis and cancer, should become available much more quickly than permitted under current law.

AARP also supports transparency of marketing practices by the pharmaceutical industry in order to protect the public from conflicts of interest. Doctors should disclose when they accept gifts from drug companies. The Secretary of the Department of Health and Human Services should be authorized to directly negotiate lower drug prices, as other advanced countries do. Barriers to legal importation of drugs from Canada should be lifted, with appropriate safeguards to protect safety.

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