Kaine Highlights Medicare Trustees Report, Improved Solvency Of Medicare Thanks To Affordable Care Act
WASHINGTON, D.C. – Today, on the 49th anniversary of the signing of Medicare, U.S. Senator Tim Kaine delivered remarks on the Senate floor to highlight the positive findings of the 2014 Medicare Trustees Report released earlier this week. According to the report, the life of the Trust Fund has been extended to 2030, up from its projection of 2017 in 2009, and Part B premiums are expected to stay the same rather than increase for the second year in a row. The report also indicates that reforms included in the Affordable Care Act greatly contributed to the improved solvency of Medicare.
“What explains the improving solvency of the Medicare Trust Fund? … The Congressional Budget Office and others are indicating that a large part of the improved solvency of Medicare is because of the reforms that were included by Congress when they passed the Affordable Care Act in 2010,” Kaine said. “When it comes to reducing costs, bending the cost curve, the Affordable Care Act is working.”
“The innovative systems of changing the payment model from pay for procedure to pay for quality – for paying for value over volume, for reducing costs and improving health care delivery systems are extending the solvency of Medicare,” Kaine continued. “Not only is this cost containment good for the federal government, for the federal treasury, it's also good for Medicare recipients. 8.2 million Medicare recipients saved more than $11.5 billion on prescription drugs thanks to closing the Medicare Part D doughnut hole. And in Virginia people with Medicare saved $254.4 million on prescription drugs because the Medicare Part D doughnut hole was closed just since the ACA was enacted. … In 2013 alone, 37.2 million Medicare recipients received free preventive benefits, including more than 900,000 in Virginia, because of the Affordable Care Act.”
In closing, Kaine said, “Medicare is one of the best programs that this nation has ever embraced. I want to wish it a happy 49th birthday today, and congratulate those who are here in the Senate in 2010 for being willing to risk action and thereby finding a way to save costs and make Medicare work better.”
Full transcript of Kaine’s remarks:
I rise today in honor of a birthday. 49 years ago today, Medicare was signed into law. Every year, the trustees perform a report about the fiscal health of Medicare and Social Security, and that report was issued earlier this week. So on this birthday, 49th birthday of Medicare, I want to come and talk about Medicare's health because there's some good news.
The 2014 Trustees Report released earlier this week looks at the trust fund financing for Medicare hospital coverage, and indicates that that trust fund, under current projections, will remain solvent until 2030. Last year, the 2013 report indicated that that solvency period would go to 2026, so, in one year, the fiscal projection for the health of Medicare has improved by four years, solvency until 2030. In addition, the projected Part B premiums, the Part B portion of Medicare, which is Prescription Drug Premium Program for seniors, for the second year in a row the premiums will not increase one penny, second year in a row.
Mr. President, this improved health of Medicare is significant. The health of it has improved dramatically even in the last year, but where the improvement really looks significant is if you compare the 2014 report with the 2009 report, the report that was done on Medicare's 44th birthday five years ago. The 2009 report said The Hospital Insurance Trust Fund was not adequately financed for the next ten years and it would be exhausted in 2017. So, again, just to compare, 2009 Medicare's Trustee Report: the trust fund will be exhausted by 2017; 2014 Medicare Trustees Report: the trust fund will be solvent all the way through 2030. There's a difference of 13 years of additional solvency in Medicare according to the projections and the change just from 2009 to 2014.
So, Mr. President, I think you know where I'm going with this. What explains the improving solvency of the Medicare Trust Fund? Why would it have changed so dramatically from the 2009 to the 2014 projection and added 13 years of solvency to the trust fund? Well, the Congressional Budget Office and others have indicated that it was not the 2009 recession that was the primary driver for Medicare spending reduction. Instead, the CBO and others are indicating that a large part of the improved solvency of Medicare is because of the reforms that were included by Congress when Congress passed the Affordable Care Act in 2010. Mr. President, when it comes to reducing costs, bending the cost curve, the Affordable Care Act is working. That's not the only reason that Congress passed the Affordable Care Act. Coverage is expanding. Certain health care indicators are improving. More people have access because they're not denied insurance because of preexisting conditions. Kids can stay on family policies. Businesses can get tax credits if they're small. But one of the areas -- and that was why the first ‘A’ of the ACA was ‘Affordable’—was to try to do things that would control health care costs and this Medicare Trustees Report on Medicare's 49th birthday shows on cost reforms the ACA is working.
The innovative systems of changing the payment model from pay for procedure to pay for quality--for paying for value over volume, for reducing costs and improving health care delivery systems are extending the solvency of Medicare. Not only is this cost containment good for the federal government, for the federal treasury, it's also good for Medicare recipients. 8.2 million Medicare recipients saved more than $11.5 billion on prescription drugs thanks to closing the Medicare Part D doughnut hole. And, in Virginia, people with Medicare saved $254.4 million on prescription drugs because the Medicare Part D doughnut hole was closed just since the ACA was enacted. $254 million since the 2010 enactment. In 2013 alone, 37.2 million Medicare recipients received free preventive benefits, including more than 900,000 in Virginia, because of the Affordable Care Act.
Now, Mr. President, the work obviously needs to continue to bend the cost curve the right way, but the trustees report from Monday is not the only evidence of the improving health of our fiscal expenditures. Just this month CBO again revised downward its ten-year estimate for spending on Medicare and our nation's major health programs. Since 2010, CBO Has lowered its estimates for Medicare and Medicaid and other health programs by $1.23 trillion, lowered projections of health care spending due -- since the Affordable Care Act was passed. CBO Said in a recently issued long-term budget outlook that the government will spend 1.6% of GDP less on health programs than estimated in 2010 before the ACA was passed. A report released this week by the Office of the Assistant Secretary of Planning and Evaluation at HHS reported no growth in Medicare expenditures on a per capita basis last year, and that report also said that Medicare spending between 2009 and 2012 for beneficiaries in the traditional program were approximately $116 billion lower than it would have been if the average growth rates from years ‘04 to ‘08 had just been projected forward. So there are many reasons why we should be thankful that the Affordable Care Act passed, that we should be absolutely committed to maintaining it, and that we should also be committed to improving it wherever we can, but, as we celebrate the 49th anniversary of Medicare today, one of the reasons we should be thankful is it is clear that the ACA Is helping us make health care more affordable.
Now, Mr. President, I'll just conclude, the report that was issued this week was not all good news because it also had some challenges with respect to Social Security. The Social Security Trust Fund will be exhausted in 2033 and that represents no change from last year. The solvency of the trust fund was not changed at all in the interim year, but, in the area of Social Security Disability Income, that insurance program at current projections will be depleted by 2016. Secretary Lew indicated this week that measures need to be taken to make sure that that program, which is of critical importance to millions of Americans who are on disability, we've got to take action to fix that program so that they can count on it. So what we see is, when Congress and the Affordable Care Act acted in a smart way to deal with Medicare, we improved the area of Medicare costs, and we're saving money. Congress has not acted with respect to Social Security and the Social Security Disability Insurance Program, which is critical to folks with disabilities; it’s going to need some quick fix.
So, Mr. President, I conclude and just say it's good for Congress to act. We can filibuster, we can debate, we can, you know, consider nominations. We can do a bill in one house and send it over and wait, like immigration reform, for a year plus for the other house to do something about it. None of that is action. None of that will fix any of the challenges that face us. But when we do act and we're willing to tackle tough problems like Medicare cost growth and we do it in both houses and take a risk, we will find that we'll be better off than if we don't act. Social Security needs to have the same kind of focused and careful attention to it, especially the disability insurance program, as we paid to Medicare in 2010. Medicare is one of the best programs that this nation has ever embraced. I want to wish it a happy 49th birthday today, and congratulate those who are here in the Senate in 2010 for being willing to risk action and thereby finding a way to save costs and make Medicare work better. Thank you, Mr. President. And I yield the floor.