Print - Actuary's Report 2008

Medicare Actuary Reports to Congress:
End Overpayments to Private Plans to Keep Medicare Solvent

On April 1, 2008, the Centers for Medicare & Medicaid Services (CMS) Chief Actuary Richard S. Foster told the U.S. Congress that lowering government payments to private Medicare plans to equal payments in traditional Medicare would keep Medicare solvent for an extra year-and-a-half while at the same time lowering the burdensome Medicare Part B premium by almost $3.00 a month.

In addition, he revealed that:

Reducing payments to private plans would delay the arbitrary "45% Trigger" for two more years.
Reaching the 45% Trigger should not be seen as proof that the trust fund financing is inadequate.
If current law were changed to pay MA plan payments more directly based on what they bid, the plans would save money for Medicare in some markets and cost more in others, but overall, the change would reduce Medicare spending.
While the 10-year cost projection for the Medicare prescription drug benefit is 37% lower than projected in 2003 when Congress created the benefit, 19% is from lower estimates of national prescription drug spending, and 7% is from lower-than-expected Part D enrollment, meaning the much ballyhooed "competition between plans" can account for very little of the lower estimate, and is offset by the unfair overpayments.

Numbers don't lie. Privatization is draining Medicare's financial well-being, but it is not too late to turn it around. The first thing to do is end unfair subsidies to Private plans.