President Obama understands that Medicare is an essential program that
provides care for millions of our seniors and the disabled. We will do
whatever it takes to protect it.
But today's report should trouble anyone who is concerned about the
future of Medicare and health care in America. Just as families,
communities and businesses are struggling under the crushing burden of
skyrocketing health care costs, so too are our Medicare Trust funds.
This isn't just another government report. It's a wake up call for
everyone who is concerned about Medicare and the health of our economy.
And it's yet another sign that we can't wait for real, comprehensive
I want to highlight two examples of the problem we're facing. First, the
Hospital Insurance Trust Fund helps cover the cost of beneficiaries'
hospital stays and related care. Today, the fund spends more than it
takes in and we make up the difference using assets from the fund. But
in 2017 - eight years from now - those assets will be exhausted if we
don't do something. Second, the Supplementary Medical Insurance Trust
Fund helps pay for medical care and prescription drugs. This fund is
solvent, but only because premiums and general revenue financing are
reset every year, requiring seniors and the Federal budget to pay more
for their care. If health care costs keep going up, our beneficiaries
will continue to see their premiums rise at unsustainable rates.
I know this alarm has been sounded before. Politicians have been
worrying about the growth of Medicare spending for many years.
The Obama Administration isn't just worrying; we're doing something
about it. And if we want to bring down the cost of health care in this
country and strengthen our economy, then we all must show leadership and
take action to control costs.
At the Department of Health and Human Services, we have started using
our administrative authorities to keep Medicare costs in check.
The President's budget is another crucial step. It includes new
incentives that put quality first, make Medicare more efficient and save
taxpayer dollars. The President's budget also fights fraud in Medicare
that costs us billions each year by providing a 50 percent increase in
funding to help crack down on anyone who tries to cheat the system.
We are working with Congress on legislation that includes and goes
beyond the cost-savings policies in the President's budget. The only
way to slow Medicare spending is to slow overall health system spending
through comprehensive and carefully crafted legislation.
But we cannot do it alone. Yesterday the President stood with the
health care leaders from the private sector who have come together to
pledge to cut health care spending by $2 trillion over 10 years, which
would result in savings of $2,500 for a family of four.
Medicare is central to the effort to promote high-quality, affordable
health care for all Americans. As the nation's largest insurer, its
success will both improve the lives of seniors and disabled
beneficiaries and set the standard for other insurers. But we know that
its success in becoming a strong and sustainable program depends on our
ability to fix what's broken in the rest of the system. When previously
uninsured Americans join Medicare, they are less healthy and cost the
system more. Giving the uninsured coverage before they join Medicare
will improve their quality of life and save money for Medicare.
If we fail to take action, health care costs will only get worse and
Medicare spending will increase. Businesses will see more of their
profits consumed by health care. Families will continue to struggle.
We know that bending the cost curve is an important component of health
care reform, and key to strengthening Medicare.
And this report makes it clear: reform can't wait. All of us in the
Administration look forward to working with Congress to make reform a
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