Press Release
Wednesday, February 23, 2000
WASHINGTON -- Robert Bixby, Executive Director of The Concord Coalition, testified before the Senate Finance Committee today at a hearing on Medicare Reform: Issues and Options.  His testimony highlighted the urgent need for Medicare reform and the reform criteria that should guide policy makers, including quality care, fiscal sustainability, generational responsibility, income related cost sharing, efficient provision of medical care and prompt action. Excerpts from his testimony follow:


         “Unfortunately, today's prosperity, welcomed as it is, has not repealed the coming age wave.  Nor has it erased the projected growth in age-related entitlement programs such as Medicare, Social Security and Medicaid.  And in November 1999, the Technical Panel of the Social Security Advisory Board warned that the official projections of the Medicare and Social Security trustees might greatly understate future longevity, and hence future costs.


         “Thus, even if recent projections prove accurate and the federal government enjoys a period of prolonged surpluses, the fact remains that between now and 2040, the number of Americans age 65 and older will approximately double; the number of workers paying into Medicare and Social Security relative to the number of beneficiaries will fall by more than a third; the cost of Social Security and Medicare as a percentage of the economy will grow by more than 70 percent; and the annual infusion of general revenues into the two programs will approach $700 billion in inflation adjusted dollars.


         “The Concord Coalition believes we must go beyond merely achieving a short-term on-budget balance.  We advocate using the current economic, fiscal, demographic and political windows of opportunity to address the long-term Medicare and Social Security deficits that will accompany the aging of the nation's population.  These deficits threaten to undo the hard work and fiscal discipline of recent years and undermine our potential for future economic growth.


         “Reduced to fundamentals, controlling Medicare costs over the long term requires some combination of 1) reducing the number of people eligible for the program; 2) increasing how much some participants pay (either for insurance or for medical care); or 3) reducing total program costs per beneficiary.  If costs cannot be kept down, then 4) additional revenues will have to be found.  Despite concerns about unsustainable costs over the long term, there is pressure to 5) expand the program to cover prescription drugs and long term care. 


         “The Concord Coalition believes that Congress and the Administration shouldn't enact new entitlements (such as a prescription drug benefit) until it is confident that America can afford the ones it already has.  … (We) will oppose any policy changes that increase the cost of future promised benefits without also identifying a credible way to finance those benefits,” Bixby testified.


         The Concord Coalition recently released its Primer on Medicare, which is now available on the organization's website.  The primer, which explains Medicare's current problems and outlines options for solving them, uses 22 charts to describe the current program, present the problem and establish criteria for reform.  Various options for reform are discussed, ranging from incremental steps to major structural reform.