Since the creation of Medicare in 1965, many advances in health care have helped seniors to lead longer and healthier lives. In 2003, the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) was signed into law, creating a program to give seniors financial support with their high prescription drug costs. While I am proud of the way this program has helped seniors afford their necessary medications, more changes are needed for Medicare to allow it to keep pace with modern health care services. I have been working in Congress to find ways of controlling costs while supporting high quality care to set the Medicare program back on a path of long-term fiscal sustainability.

I believe that an essential part of improving quality while reducing overall costs involves remodeling the Medicare program to fit the needs of the beneficiary. To this end, I am working with my colleagues in Congress to develop a comprehensive health information technology system to expedite care while reducing unnecessary administrative costs and medical errors. I have also been working to increase flexibility between Medicare and Health Savings Accounts (HSAs). While these first steps are a good start, much more needs to be done in order to restrain needless spending on unnecessary costs while providing seniors with the high quality care they deserve.

Medicare Prescription Drug Benefit (Part D).
Despite some early confusion, enrollment in this program has been a large success. According to the 2006 Medicare Trustees Report, the costs of this program have been significantly lower than were initially projected in 2005. Additionally, many beneficiaries have seen significant savings because of the strong competition among the Medicare drug plans. These lower costs reflect the reduced spending on pharmaceuticals and savings from manufacturer rebates and other discounts. On May 10, the Center for Medicare and Medicaid Services (CMS) reported over 37 million Medicare beneficiaries are now receiving coverage through some form of prescription drug coverage. This number includes about 9 million individual enrollees in “stand alone” prescription drug plans and more than 1 million new enrollees in Medicare Advantage plans. It also includes the estimated 5.8 million Medicare beneficiaries who receive drug coverage from the Veterans Affairs and other sources of coverage equal to Medicare.

More than 93 million prescriptions were filled for these beneficiaries during March 2006 alone, averaging 3 million prescriptions per day. In addition, robust competition among drug plans continues to drive down costs for beneficiaries and taxpayers. According to CMS, competition among private plans has reduced the average premium by 32 percent, from $37 in 2005 to $25 in 2006. The cost of the drug benefit is 20 percent less for 2006 than Medicare projected, which has saved taxpayers $7.6 billion in 2006 alone.

I strongly believe that all seniors should have the option of choosing from a variety of health care plans, including traditional fee-for-service. Beneficiaries should be able to choose the plan that meets their particular needs. Seniors with multiple prescription drugs who need extensive coverage should be able to choose from plans that offer this type of service. On the other hand, seniors with fewer needs should be able to choose from plans that satisfy their unique situation. MMA allows beneficiaries to choose the health care plan that meets their individual needs, whether it is a traditional fee-for-service, managed care or preferred provider organizations. This is similar to the health care that Members of Congress and other federal employees have.

The greatest challenge facing Medicare is keeping the program from going bankrupt. Soon the 77 million baby boomers will approach retirement, putting enormous pressure on the Medicare trust fund. Actuaries estimate that in 2010, 4 years from now, Medicare will become insolvent – meaning the Medicare trust fund will no longer be bringing in enough taxes to cover the benefits it’s paying out.