I know that to many people, the words “Medicare solvency,” which is the ability of Medicare to meet its obligations, sound like an invitation to a nice nap. But union workers pay into Medicare every month, and you deserve to know that the benefits you’ve paid for will be there when you need them. And not just that – I need to know that Medicare will be around to cover my daughter and my new grandson when they become eligible.
That’s what Medicare solvency is all about.
And a few weeks ago, we got some good news. According to the annual report released by the Medicare Board of Trustees, Medicare will stay solvent for two years longer than previously estimated – for a total of nine years longer than before the health reform law was passed. I’ll say that again: the life of Medicare is nine years longer today than it was before health reform.
So how exactly has the health reform law helped extend Medicare’s solvency? To start, it stopped Medicare from overpaying private insurers. Before we passed health reform, we were overpaying private insurers by 14 percent.
While we were at it, we expanded benefits for Medicare beneficiaries. The seniors I’ve met with in Minnesota are very happy about the new free preventive care they get – wellness checkups, colonoscopies, mammograms. They know, and we know, that an ounce of prevention is worth a pound of cure. We’re also closing the prescription drug donut hole – the gap in Medicare coverage where seniors have to pay the full cost of their prescription drugs – so that many seniors won’t have to make the impossible choice between medicine, heat and food.
In addition, many provisions in the health reform law will make our health care system more efficient and cut costs over time. For example, I authored a provision called the Medical Loss Ratio – or 80-20 rule – that requires health insurers to spend at least 80 percent of the dollars they receive from premiums on actual health care and not marketing, administrative costs or CEO bonuses. And if insurance companies don’t meet their required percentage, then the health insurer has to rebate the difference.
This year, Americans are slated to receive some $500 million in rebates from insurers as a result of my provision – including more than 9,000 Minnesotans who will receive a total of $1.4 million. This is on top of the $9 million Minnesotans received in rebates from insurers last year.
But I’m not saying we’re done. We have more work left to do. For instance, I have a bill to allow Medicare to negotiate directly with pharmaceutical manufacturers on the prices of their drugs, and I hope to work with my colleagues to bring it to the Senate floor soon.
Medicare works. It works for grandparents from Pipestone to Grand Marais and all across the country. So I will continue to do my part to protect Medicare today, while strengthening the program for future generations.
– Al Franken represents Minnesota in the U.S. Senate. His website is www.franken.senate.gov.