Reacting to the annual Trustees report on the projected financial status of the Medicare program, the president of the Healthcare Leadership Council says keeping the status quo "is not an option."
Congress must act soon and with conviction if there is any chance of heading off the projected collapse of Medicare in 2028, the president of the Healthcare Leadership Council says.
Medicare's Trustees have projected that the program will reach insolvency in 2028, two years earlier than last year's estimates, and HLC president Mary R. Grealy says that creates even greater urgency for Congress to modernize and strengthen Medicare.
The HLC is a coalition of chief executives from all disciplines within the healthcare system that works to develop policies, plans, and programs.
The release of the trustees' report drove drug stocks higher, with the Nasdaq Biotechnology Index up 2.5 percent. It had fallen in anticipation of the report. Analysts had predicted that prescription drug prices would be cut if the Independent Payment Advisory Board (IPAB) was triggered, and they were relieved when it was not.
The trustees also said that the combined Social Security and disability trust fund reserves are estimated to run out in 2034, the same projection they made last year.
Medicare spending in 2015 totaled $647.6 billion, and the program's trust fund for hospital care is still scheduled to have sufficient funding 11 years longer than the estimate given before the Affordable Care Act was passed, the trustees said.
The trustees attributed the shorter timeline to changes in estimates of income and cost. Grealy says the trustees' report should encourage change in the healthcare industry.
Action Required
"If we are to preserve the program for future generations, keeping the status quo is not an option. As Medicare Advantage and the Medicare Part D prescription drug program have demonstrated for years, consumer choice and competition can drive greater value and better patient outcomes," Grealy says.
Grealy pointed out that Congressional Budget Office projections have shown that a Medicare reform approach allowing beneficiaries to choose from competing private health plans would reduce costs to the program as well as out-of-pocket costs for beneficiaries.
"It will take time for Congress to develop and enact structural, patient-centered, consumer-driven Medicare modernization, which makes it all the more important to begin that bipartisan discussion now," she says.
The IPAB remains a concern even though the Medicare Trustees' projections did not trigger its activation in the coming year, Grealy said.
She stressed that IPAB repeal must remain a priority action for lawmakers. IPAB is potentially harmful, Grealy says, because it transfers decision-making power from elected officials to unelected appointees and would lead to harsh across-the-board cuts to payments for medical goods and services that would have a severe impact on quality and access to care.
"Although it's currently hibernating, IPAB remains a flawed, dangerous concept," she said. "Congress needs to act before this bear awakens and does serious harm to beneficiaries and the healthcare system."