Protecting Seniors' Access to their Doctors

AARP is fighting to protect Medicare for seniors and strengthen the program to ensure future generations have guaranteed, high-quality health care. But a flawed doctor payment system — called the sustainable growth rate (SGR) — is threatening to drive doctors out of the Medicare program.

For more than a decade, Congress has been unable to agree on how to fix this broken system, which, unless action is taken before March 31, will cut payment to doctors who take Medicare patients by 25 percent. After years of kicking the can down the road, Congress has reached an agreement on a new system that would reimburse doctors based on the quality of care they provide, not how many services they perform. The big sticking point is how to fund this change, which is estimated to cost $130 billion to $150 billion.

AARP is calling on Congress to find a responsible way to protect access to doctors without unfairly burdening seniors, who on average already spend nearly 20 percent of their income on out-of-pocket health care costs. That means reducing health care costs, not shifting costs to seniors. One way Congress can reduce costs is to clamp down on drug companies’ high prices. Common sense proposals to reduce drug prices include:

Require Drug Companies to Give Rebates to Medicare

Unlike Medicare Part A, which is financed primarily through payroll taxes, Medicare Part D — the prescription drug benefit — is funded through premiums and general tax revenue. Thus, as Part D spending increases, so does the cost shouldered by both Part D enrollees and taxpayers. By reducing prescription drug spending under Part D, both taxpayers and Part D enrollees will benefit. Drug manufacturers already return part of the cost of drugs for Medicaid beneficiaries to that program as rebates. Medicare doesn’t get the same treatment. Requiring drug makers to provide the same rebates to Medicare for just the program’s 11 million lowest-income beneficiaries would result in substantial savings. That’s what the Medicare Drug Savings Act (S.740/HR1588) would do, and AARP endorses the bill. The nonpartisan Congressional Budget Office has scored this option as saving $141 billion over 10 years.