Making Medicare Fair

By William D. Novelli, Chief Executive Officer, AARP
November 2007
Full Article

A couple of years ago, a colleague of mine moved his 80-year-old mother from the Midwest to Northern Virginia. He contacted 16 doctors before he found one who would accept a new Medicare patient.

Why are some doctors reluctant to accept new Medicare patients or are no longer treating them? Many physicians say they simply can't afford to. This is partly because the formula for Medicare payments to doctors is flawed.

The problem has intensified in recent years and is destined to become even worse. If Congress doesn't act by the end of 2007, doctors will face an unprecedented 10 percent cut in Medicare payments next year. Should that occur, 60 percent of physicians say they'll be forced to limit the number of new Medicare patients they accept, according to the American Medical Association.

The effect on Medicare beneficiaries could be devastating. Many may not be able to see their doctor of choice, and they could have trouble finding another one. Assuring access to preferred doctors is key for beneficiaries. So are affordable Medicare premiums. Since 2000, Part B premiums have doubled, and they will rise another 3.1 percent in 2008. These increases (a cumulative 106 percent) far surpass the increases in the Social Security cost-of-living adjustments (21 percent).

Since 2002, Congress has prevented mandated reductions in physician payments by making beneficiaries pay higher premiums. Now Congress has an opportunity to make sure that health care for older Americans is both accessible and affordable by paying physicians fairly while protecting beneficiaries from steep increases in Medicare Part B premiums.

Where would this money come from? From Medicare Advantage plans, which are paid-with taxpayer dollars-some 12 percent more than original Medicare, according to MedPAC (Medicare Payment Advisory Commission), an independent group that advises Congress on Medicare issues.

So, Congress can restore greater balance between original Medicare and Medicare Advantage programs by reducing payments to the private plans and using that money to pay doctors fairly and make other improvements to Medicare.

There's another part to all of this. The lawmakers can strengthen traditional Medicare by raising asset limits for the low-income assistance programs that help older Americans pay for the health care and prescription drugs they need.

All Americans should have access to high-quality, affordable health care and the opportunity to achieve lifelong financial security-that's the goal behind our Divided We Fail campaign. But older people can be assured of neither unless Congress preserves access to doctors and affordable premiums for all beneficiaries. Medicare Advantage plans have an important role to play in achieving that goal, but not at the expense of beneficiaries and doctors. This is the message we must all send to Capitol Hill.

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