Medicare: Improving Lives for 48 Years

By Tim Morstad, AARP Texas

Today marks the forty-eighth anniversary of Medicare, the national health insurance program for Americans 65 and older, signed into law by Texas' own President Lyndon B. Johnson in 1965 as an amendment to the Social Security Act.

At the signing, President Johnson noted that, "every citizen will be able, in his productive years when he is earning, to insure himself against the ravages of illness in his old age." Indeed, for nearly half a century, Medicare has lifted millions of older Americans out of poverty and has provided them with a safety net that they have rightly earned.

Today, Medicare provides affordable health coverage to roughly 52 million Americans, allowing them to lead more productive lives. Yet Medicare has reached a critical juncture. According to the Centers for Medicare and Medicaid Services, the Medicare trust fund will be exhausted in 2026. Politicians have used this statistic as a against millions of Americans who rely on Medicare. If we don’t cut benefits for today’s retirees, they say, benefits will cease to exist for future retirees.

Two years ago, AARP kicked off a national listening initiative, You've Earned a Say, to ensure the millions of Americans who pay into Medicare have a voice in the debate over its future. Millions of our members have sent a clear message to Washington: We should not balance the federal budget on the backs of our nation's seniors.

Due to rising health care costs and changing demographics, Medicare faces real challenges, and we at AARP are tackling these challenges head on. We've said that we can reduce costs throughout the health care system, by clamping down on high drug prices, by improving care coordination and the use of technology and by cutting over-testing, waste and fraud. These commonsense solutions will ensure the longevity of Medicare so that seniors can continue to receive the affordable health care they deserve.

It’s important to note that the Affordable Care Act has already extended the life of Medicare by implementing key reforms that will save $500 billion over the next 10 years. From curtailing exorbitant payments to private insurers to cracking down on fraud and abuse, Washington has shown that it can accomplish real savings intelligently and responsibly, without cutting benefits for current or future retirees.

In order to reduce high prescription drug prices, we also must stop pharmaceutical companies from gaming the system. Right now, some brand name drug companies are driving up the cost of health care by entering into agreements with generic drug companies, paying them to delay bringing a competing product to the market. Moreover, Medicare should be allowed to negotiate with pharmaceutical companies for lower drug costs, which isn't permissible under current law. Allowing Medicare to use the bargaining power of its 52 million beneficiaries to negotiate for lower prescription drug prices, particularly for high-priced brand name drugs, could save money for seniors and reduce the cost of health care.

Improving care coordination is essential to making sure patients receive safe, high-quality care. We can do this by creating systems that better connect doctors and health care facilities and take advantage of advanced information technology. More effective care coordination will also reduce medical errors and help prevent dangerous, preventable hospital re-admissions while also ensuring patients are getting recommended care and saving taxpayer dollars.

It is estimated that Medicare could save hundreds of billions of dollars by reducing waste and stepping up fraud detection. For example, Medicare currently pays all health claims and then has to chase down providers if an error or fraud is detected--and too often the improper payment is never recovered. By improving technology, we can flag fraudulent claims before they are paid. We can also use technology to crack down on criminals who file false Medicare claims. By removing personalized information from Medicare identification cards, we can develop new cards that can track and confirm that Medicare is being billed for only those services a patient receives.

The proposals we are advocating for are not gimmicks but solutions that will improve and strengthen Medicare today and for future generations. Medicare has been successful for nearly half a century and is still a success today. If Washington takes the necessary steps, Medicare can be strengthened and improved for the next generation of seniors. By doing so, we can, in the words of President Johnson, “reaffirm the greatness of America.”

Tim Morstad helps lead outreach efforts for AARP in Texas.