On Feb. 15, the Bush administration sent Congress a legislative package in response to the Medicare funding warning triggered by the fact that more than 45 percent of total Medicare spending has been derived from general revenues for two consecutive years.
According to a letter sent to House Speaker Nancy Pelosi, Department of Health and Human Services secretary Michael Leavitt said the Medicare program is “on an unsustainable path” driven by projected growth in its per capita costs, and increases in the beneficiary population as a result of population aging. “Excess cost growth will not be brought under control until there is comprehensive reform changing Medicare’s underlying structure,” wrote Leavitt. “The … problem is an unsustainable design in which government controls too many aspects of health care.”
The legislative package takes a three-step approach to strengthening Medicare through value-based purchasing, medical liability reform, and higher Medicare prescription drug premiums for some seniors. Specific elements in the legislation include improved health IT, transparency of pricing and quality information, and incentives for providers to deliver high-quality, low-cost health care. Read the text of the bill.
