Response from Senator Claire McCaskill

Below is the response from Senator
Claire McCaskill:

November 3, 2009
Dear Mr. Emmerling,

Thank you for contacting me regarding Medicare and Congressional proposals for health care reform. I appreciate your comments and apologize for the delay in my response.

Medicare has been the foundation of health insurance for our nation's seniors since 1965 and has provided a crucial health care safety net for nearly 45 million elderly Americans. I know how important Medicare is for seniors living on a fixed income, and I assure you that I am committed to strengthening this vital benefit program.

There is, however, no denying that our health care system is in need of reform. The soaring cost of medical care is crippling our economy, bankrupting our nation's families, and becoming an unsustainable financial burden for American employers. Federal entitlement programs, such as Medicare, will face financial insolvency if burgeoning health care costs are not addressed. In fact, it's estimated that Medicare will begin to run a deficit by 2017 and there is growing concern that the federal government will not be able to keep pace with the aging baby-boomer demand for medical services. It is clear that reforms must be made to our health care system so that we can maintain seniors' access to medical treatment in a fiscally sustainable manner.

As you may know, the President's budget includes a number of proposals which will generate an estimated savings of $92.3 billion over five years in the Medicare program. Congress is also exploring other ways to bring down health care costs and to produce savings in Medicare. Some of the proposals being debated include adjusting Medicare drug coverage premiums for the wealthy; bundling hospital Medicare payments to incentivize better follow-up care and decrease hospital readmission rates; and improving Medicare payment accuracy to prevent waste, fraud, and abuse.

Many of the potential savings for Medicare are expected to come from establishing a competitive bidding system for Medicare Advantage (MA) plans. Currently, the federal government is paying private insurers up to 12 percent more than it costs to treat comparable beneficiaries through traditional Medicare. In fact, a recent GAO report revealed that MA insurance companies made $3.36 billion in profits in 2006, with some companies making profits in excess of $1 billion more than they had projected. These overpayments are making sustaining Medicare more difficult. The proposed savings plan would require private insurance companies to competitively bid to cover Medicare beneficiaries in a certain geographic area and be paid the average of the bids. Generating competition within the private insurance market will lower overall prices and would save Medicare nearly $177 billion over 10 years.

Options like these will not only provide higher quality and value of care to patients, but also produce the savings we so desperately need to ensure that future generations can receive this benefit. Congress, as it considers health care reform, must work toward creating a Medicare program that serves the interests of seniors rather than private insurance companies.

Although there is not a final version of the health reform bill in the Senate, I understand that there has been a lot of confusion surrounding certain provisions in the various versions of this legislation. There is also misinformation being propagated, especially with regard to seniors. You may be interested to know that the Special Committee on Aging, of which I am a member, has prepared a document entitled "Health Care Reform, Fact vs. Fiction". I encourage you to visit the website http://www.aging.senate.gov/issues/healthcare/factvsfiction.pdf to gather factual information regarding some of these rumors.

As health reform legislation comes to the Senate floor, please be assured I remain committed to making sure all of our nation's seniors have access to affordable quality coverage.

Again, I appreciate your letter. Please do not hesitate to contact me in the future about other matters of interest or concern to you.

Sincerely,

Claire McCaskill
United States Senator

P.S. If you would like more information about resources that can help Missourians, or what I am doing in the Senate on your behalf, please sign up for my email newsletter at www.mccaskill.senate.gov.

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