EMERSON'S MEDICARE PRESERVATION ACT FACT SHEET

Rep. Bill Emerson, R-Mo., compiled a set of "facts about Medicare's condition." The list appears here.

Medicare is going broke. According to the 1995 report from the Medicare Board of Trustees -- three of who are Clinton Administration Cabinet Secretaries:

"The Federal Hospital Insurance (HI) Trust Fund [Part A], which pays inpatient hospital expenses, will be able to pay benefits for only about seven years and is severely out of financial balance in the long range... The Trustees believe that prompt, effective, and decisive action is necessary."

-Medicare Supplemental Medical Insurance (Part B), which pays doctor bills and other outpatient expenses, is also in serious trouble. Part B costs grew almost 20 percent faster than the economy as a whole in the past five years. The trustees reported that this is "a rate of growth that is clearly unsustainable," and urged Congress "to take additional actions designed to more effectively control SMI [Part B] costs."

-If congress irresponsibly ignores these dire findings, Medicare will go broke in 2002 -- only seven years from now.

The Medicare Preservation Act; What's In The Plan?

Increasing Benefits

Under the Republican Medicare Preservation Act, Medicare benefits will not be cut. This year, Medicare per beneficiary spending averages $4,816. This amount will increase to $6,734 per beneficiary under our plan. Overall, Medicare spending will increase from $161 billion this year to $274 billion in 2002.

Keeping Out-Of-Pocket Costs The Same

-A non-partisan Congressional Budget Office analysis of the Medicare Preservation Act demonstrates that senior citizens will pay just $4 a month more in Part B premiums in 2002 than they would under President Clinton's budget outline. Seniors have always paid a portion of Part B insurance costs, and these costs increase each year. This year, seniors pay $46.10 per month in the year 2002. Under the Medicare Preservation Act, premiums would cost $87 per month in the year 2002. Under the President's plan, premiums would cost $83 per month in 2002.

-The House Medicare Preservation Act makes no changes in copayments or insurance deductibles beneficiaries pay out of their own pockets. Copayments are 20 percent. Deductibles are $716. Under the House Medicare Preservation Act, copayments will remain 20 percent. The Department of Health and Human Services updates the deductible amount each year to adjust for inflation. The plan would not change this process.

The House plan would not change the Part B premium rate. Medicare Part B premiums pay for 31.5 percent of the program's costs. Under the Medicare Preservation Act, Part B premiums would continue to cover 31.5 percent of the program's costs.

Insulating Medicare From Tax Cuts For Middle Income Families

-Medicare savings will not be used to pay for a tax cut for anybody. There is no link between the plan to save Medicare and the tax cut for middle income families. Even if the budget was balanced and Congress had not proposed a tax cut, Medicare would still have to be saved from imminent bankruptcy. Claims to the contrary are only a convenient way to duck the responsibility of saving and strengthening Medicare.

-Our plan reaffirms current law that money in the Medicare trust fund can only be used to pay for Medicare and no other purpose.

Common Sense Medicare Reforms and Options

-The House plan would raise Medicare premiums only for single seniors with annual incomes over $75,000 and senior couples with incomes over $125,000. Low income workers will no longer be required to subsidize the health insurance of affluent retirees.

-If all else fails and Medicare spending increases too fast, our plan includes a "fail safe" that would allow the Secretary of Health and Human Services to reduce how much Medicare pays for doctors and hospitals.

-The Medicare Preservation Act guarantees that anyone in the current Medicare plan who does not want to choose a different plan can remain in the traditional Medicare program.

-The Medicare Preservation Act will empower seniors with the same health care options enjoyed by every other American. Seniors will be allowed to choose the health plan that best suits their individual needs. Medicare will pay for coverage under Health Maintenance Organizations, Preferred Provider Organizations and other market-based plans that can reduce their out-of-pocket costs and give them more coverage, such as prescription drugs and eye care. The plan will also let organizations like the Farm Bureau, the American Association of Retired Persons and trade unions offer Medicare group coverage, financed by the government.

-If a senior is dissatisfied with the health care plan they choose, they can select a different plan, including a return to the traditional Medicare program.

Fighting Waste and Fraud to Save Senior's Money

- The Medicare Prevention Act is tough on abuse, fraud and waste in the Medicare program. Seniors who report a verifiable incident of abuse, fraud or waste will receive a financial reward. Criminal and civil penalties will also be strengthened for anyone caught defrauding Medicare. Cleaning up the program is one of the best ways to save Medicare without cutting benefits.

Meeting Rural America's Unique Health Care Needs

-Rural America faces unique health care challenges, especially for senior citizens. The Medicare Preservation Act responds by changing a Medicare reimbursement formula to close the gap between the amount of Medicare support going to rural counties and more populated counties. The new formula will make rural areas more attractive for health care plans and providers to participate in.

-Rural area sole community hospitals will also benefit from a more realistic reimbursement rate update, and rural primary care hospitals will continue to receive Medicare hospital payments for their services.

The plan also establishes a new program called Rural Emergency Access Care Hospitals (REACH) which will help small rural facilities operate as emergency facility/stabilization units and continue to treat Medicare patients.