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Obama on Medicare reform

By Jennie L. Phipps · Bankrate.com
Wednesday, February 13, 2013
Posted: 5 pm ET

Medicare reform was a big part of President Barack Obama's State of the Union address Tuesday night.

The president called for "modest reforms" to Medicare, saying, "Those of us who care deeply about programs like Medicare must embrace the need for modest reforms -- otherwise, our retirement programs will crowd out the investments we need for our children, and jeopardize the promise of a secure retirement for future generations."

At the same time, he rejected anything that undermines the fundamental promise of the program. "We can't just cut our way to prosperity," he said.

Then the president outlined some reforms that he would encourage. Most of them were also included in his most recent budget proposals:

Reduce payments to drug companies. The administration's budget proposals specify making payments for prescription drugs match what drug companies are paid by the federal Medicaid poverty program.

Ask wealthier seniors to pay more. Right now, couples who have modified adjusted gross income or MAGI, plus nontaxable interest income together totaling $170,000 -- $85,000 for single taxpayers --  already pay more for Medicare, with their costs escalating as their incomes rise.

Changes to the way hospitals and doctors are paid, focusing on performance-related incentives. The president said in his speech, "We'll bring down costs by changing the way our government pays for Medicare, because our medical bills shouldn't be based on the number of tests ordered or days spent in the hospital; they should be based on the quality of care that our seniors receive."

Obama left the door open to other cost-saving proposals. "I am open to additional reforms from both parties, so long as they don't violate the guarantee of a secure retirement. Our government shouldn't make promises we cannot keep -- but we must keep the promises we've already made," he said.

It all seems a little vague, but somewhat comforting to those of us who are doing retirement planning and who must rely on this vital health care program.

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20 Comments
Jim
February 15, 2013 at 11:22 am

If they could just stop the fraud in Medicare. This would save billions and save Medicare. There is over a billion dollars a year in Medicare fraud.

jusayin
February 15, 2013 at 11:01 am

Interesting comments...from lots of folks who don't deal with Medicare every day. I work in the healthcare industry and what I see is that providers are getting about 40-45% LESS in payments from Medicare that they were 15 years ago -- it doesn't take rocket science to know that the cost of providing that service hasn't decreased. In fact, now "reform" has added another layer of bureaucrats deciding (before even seeing a record) whether care was needed or not and denying payment, which means the provider has to --at his cost-- constantly prove that the patient needed treatment to get paid at all. So what we see is that Medicare costs have gone up, but neither the provider nor the patient benefits. The money is now going to the bureaucrats. How special. Thank you, Mr. Obama.

JohnnyX
February 14, 2013 at 5:44 pm

No wonder things are a mess. All I hear is complain complain complain. Why don't you get off your soap box and come up with solutions and talk to your congressman. Of course medical care in this country needs reform. We spend 48% more per capita on medical care than in any other country. Something is very wrong with that. Congress could easily figure out why (and fix it), but they would rather fight about the budget. If medical costs were brought down, that would benefit everyone, seniors and juniors alike. And it would result in a lower budget.

cheryl
February 14, 2013 at 3:22 pm

Absolutely it is all those drawing from social security for many self-induced health problems We can not afford to pay these people for depression, drinking, and most of the problems that other people go to work with everyday!! So many back & neck complaints but then they are working on cars, taking long trips and that doesn't seem to bother their backs.
I know some who are living off huge inheritances and still collecting benefits.
There needs to be a complete overhaul and also reviews every 6 months to see there condition.
Thank You & Good Luck

Glenn
February 14, 2013 at 3:09 pm

To Thelma.

I don't know how old you are but us old people the percentage voted for Obama, and when we get our Social Security checks raise we just give it to Medicare. So why don't you just take a high jump off the bridge while the ice is still there. and less they come up with somthing you better have a nice savings account.

(SO GO BLOW)

Pat C
February 14, 2013 at 2:58 pm

Medicare for Seniors does not need any reform. Disability is what is draining the fund. Everyday I see young people coming into my office who are on disability for anxiety and depression. These people are obviously functioning well enough to make appointments and text on their I phone which they just took out of their Coach Bag. This is what is draining the system and before anyone makes a comment that I am against disabled people I want to let you know that I have a 23-year-old son who has a prosthetic leg and works on an ambulance part-time while he is going to school, which he is paying for with student loans which he will have to pay back. These people are not disabled and should be working. I don't want to see any cuts made to our seniors who worked hard all of their lives and actually paid into the system, unlike these younger disabled people who have not contributed to any meaningful degree. Just my humble opinion.

Sandy Wawczak
February 14, 2013 at 2:48 pm

I wonder if Obama realizes what he ACTUALLY said about proposed Medicare payments. I believe he does and this is how it reads to me:
Q-If Medicare pays claims based on "performance related incentives", (whatever that will be defined as), who will pick up the costs for the truly necessary tests and time spent in the medical facilities and offices that Medicare does NOT pay for?
A-YOU will. That money will come from an increase in healthcare costs and insurance premiums which are already prohibitive. It is private insurance that in the end picks up the tab for EVERYTHING not paid for by the patient, (or their advocate), who receives care.

How is it that without Medicare reform we are "jeopardiz[ing] the promise of a secure retirement for future generations?" What happened to the same promise for my generation...today?

I didn't work and pay taxes for over 40 years for someone to walk in after the fact and tell me that the money needed for a portion of my healthcare is nowhere to be found. I'm sick of the wasteful spending that has become part of our government's tradition and I think it's about time we hold our elected officials accountable for the way they spend our money.

Ron Paynter
February 14, 2013 at 2:09 pm

What kind of an idiot would post remarks such as looking at color not content referencing Medicare/Social Security? Someone is off her meds. There can be no doubt in anyone's mind,the color of this woman. A obvious Democrat,she is as usual playing the race card since she has nothing else to rely upon. What fool would make statements that imply most Americans have plenty of money to buy private insurance and Medicare when there are so many people on welfare,food stamps,unemployed or underemployed? That would be someone who does not know the difference between her solid waste organ and a hole in the ground

doug locksey
February 14, 2013 at 1:44 pm

You know what? You CAN budget CUT your way to prosperity but you can't SPEND your way to prosperity. Why must people turn every crisis into a Republican vs. Democrat one? The simple truth: we have too few jobs, too little tax base and too many expecting too much. That is a formula for disaster. We have no more money to spend so cuts are inevitable. Grow up and face the facts you can't keep taking from an empty pot. Medicare is an EARNED benefit that many get practically for nothing anyway. They who get MUCH for NOTHING should shut up and complain less because they have to it in the first place. Take your freebies, shut your mouths and be happy you have what you have. You don't deserve more and Obama ain't offering more. Do you think paying less to the rich doctors and medical professionals (as many Dems as Republicans) will stop THEM from charging YOU for the rest of the care? Why does no one on EITHER SIDE address the CRIMINAL level of CHARGES these "health saviors" charge the people? I don't hear EITHER SIDE talking about limiting payouts, do they? So stop the politicizing, realize you've been on a gravy train of freebies and that now the entire country is going to be forced on a money diet. Tough on all but quite overdue. That's just the facts.

thelma
February 14, 2013 at 1:35 pm

You old seniors, why do you people always look at color, rather than content. Most of you old people, didnot vote for Obama, but now you want everything from him. You were willing and hoping the Repubs would be elected, and you knew you would get nothing from them, but that was ok with you. The way most of you talk, you have lots of money. So get your private insurance. And you don't need Medicare either, right, then good yor you!