Q: What is flawed with the Medicare funding formula?
A: A complex funding formula treats America’s 40 million Medicare recipients inequitably, depending on where you live in the United States. Every U.S. worker pays the same Medicare payroll tax from each paycheck, yet the services and benefits aren’t the same once you become eligible for the federal health insurance program. Neither are your premiums or out-of-pocket expenses. All of that depends on where you live and if managed health programs are available. It also affects the reimbursement rates for the health care providers in your area. Unfortunately, for too long Iowa has gotten the short end of the stick. As a result of Iowa’s cost-effective practice of medicine, Iowa gets penalized with lower reimbursement rates from the federal Medicare program. As a result, Iowa communities have a harder time recruiting and retaining physicians and other health care providers to their hospitals and health care clinics. And Medicare recipients in Iowa have fewer choices of health plans from which to choose because managed care plans say they can’t afford to do business in Iowa where the reimbursement rates from Medicare are so low.
Q: What targeted relief were you able to get through the Senate?
A: As the chairman of the Senate Finance Committee, which has legislative and oversight jurisdiction over Medicare, I am working to enhance access to health care for older Americans. In January, I successfully persuaded the Senate to adopt targeted, short-term fixes to smooth out critical inequities in the system until permanent relief can be achieved. First, there’s an immediate payment crisis for physicians and small hospitals in rural and urban areas. A scheduled 4.4 percent payment reduction in physician fees was scheduled to occur March 1. I was successful in getting the Senate to stop the reduction through Sept. 30. In addition, I persuaded the Senate to raise the inpatient base rate for hospitals in rural and small urban areas to the same rate as their urban counterparts for six months beginning April 1. Under current law, these facilities receive 1.6 percent less on every inpatient discharge. Right now, Iowa health care providers and hospitals are getting short-changed for doing more with less. Home health care services are an increasingly important component in the health care delivery system for older folks. Again, rural providers come up short when it comes to the federal payment structure. My Senate-backed amendment would give home health care providers in rural areas short-term relief with a five percent add-on payment through Sept. 30. Finally, a program that pays Medicare premiums for low-income beneficiaries also would be extended through September. Now that these provisions are through the Senate, I’ll work to make sure they get through the full Congress and signed by the president. This spring, I’ll continue working to achieve a long-term solution that rectifies the flawed Medicare payment system once and for all.