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If you dissect this example you can see where Medicare simply does not provide for a satisfactory method of health care for Mr. B's needs.
1) It could not provide home care which would certainly
2) Because of the DRG (Diagnostic Related Group) the hospital is rewarded on a cost basis for emptying the bed as soon as possible - in this case before the patient was well enough to function on his own thus the hospital bed is freed for another patient. New Jersey instituted the DRG only two years ago. Many of us feel that the system has not been proven and that it is too soon to use this as a model for a nationwide system of health care.
Because of the medical cost involved Mr. B didn't want to see a Doctor in the first place, nor was he willing to go into the hospital; therefore he, like many older people delayed treatment until he was very ill. Perhaps some method could be devised where physicians had to except assigned medicare payment who fell in an low income bracket. This is now being done by New Jersey Blue Shield/Blue Cross.
This testimony provided by: Jocelyn B. Helm, Director
Princeton Senior Resource Center
President of the New Jersey
*These statements do not necessarily reflect the position of all the members of the society.
PREPARED STATEMENT OF THE AMERICAN MEDICAL ASSOCIATION
The American Medical Association takes this opportunity to comment on
the financing problems of the Social Security System.
The short term financing problems of the old-Age and Survivors (OASI)
and Disability Insurance (DI) Trust Funds and their long-range solvency
major problem for
problems are not new, representing the second time in less than six years
that the Social Security system finds itself on the verge of bankruptcy.
Included within the Social Security system are the Hospital Insurance
Trust Fund and the Supplementary Medical Insurance Trust
finance Parts A and B, respectively, of the Medicare program.
Medicare program 18 a primary source of medical benefits for the vast
solvency of the Medicare program be maintained in order to assure access
to high quality care for the nation's elderly.
While the Medicare trust
funds do not face the immediate difficulties of the OASI fund, pressures
are projected to begin near the end of the century.
however, in this statement we limit our comments to concerns relating to
the soundness of Medicare trust funds.
Medicare' is an "entitlement" program that promises benefits
benefits to all who have worked and contributed to the hospital insurance
Medicare also provides benefits to disabled persons under age 65
and persons who have end stage renal disease and require transplantation
Medicare benefits and administrative costs
are paid from
funds created under Title XVIII of the Social Security Act, passed in
Unlike other Federal health programs, Medicare is
solely by general revenues.
The Hospital Insurance Trust Fund, covering
hospital and other institutional benefits (Part A), is financed mainly
to 1.35% in 1985 and 1.45 percent in 1986. The wage base is increased
each year by a formula reflecting general wage growth.
revenues and through monthly premiums paid by Part B participants.
general revenue share of Part B funding has grown from 50 percent in 1971
intent of Congress to assure mainstream medical care for the elderly and
the aged of the nation shunted into a second-class system of
In this regard, Medicare has been a
problems, the problems of a sluggish economy, and short-term borrowing to
bail-out the OASI trust fund raise the specter of a failure of the Health
of the trust funds is a difficult task, dependent on the assumptions used
and the definition of actuarial soundness that is adopted. According to
the Report of the National Commission on Social Security Reform issued in
depleted by the early part of the 1990's and possibly even by the end of
Public Law 97-123 on December 29, 1981, which allows interfund borrowing
The authority originally
among the three social security trust funds.
Recommendation #13 of the National Commission on Social Security Reform
18sued last month calls for the authority for interfund borrowing by the
OASI Trust Fund from the Hospital Insurance Trust Fund to be extended
Hospital Insurance Trust Fund already, and further large borrowing is
In considering reforms affecting the OASI Trust Fund, Congress
must also address the issue of the Hospital Insurance Trust Fund and
soon as possible to avoid a Medicare funding crisis created
Medicare beneficiaries should be penalized, possibly by benefit cut backs,
due to a Medicare bail-out of Social Security.
We recognize the difficulty of the issue facing the Congress with
respect to Social Security and appreciate the efforts of the National
Commission on Social Security Reform.
The AMA truly hopes that Congress
to provide both a short-term and a long-term solution to the
problems of financing Social Security.
We urge Congress to avoid the
fate of the last ma jor modifications in the Social Security program which
were intended to carry Social Security "through the end of the century"
yet proved to be little more than a "band-aid" solution that lasted only
a few years before severe problems resurfaced.
There is a need to do what is necessary, i.e., to "bite the bullet";
in that regard, the AMA supported the provision in TEFRA
federal employees to Medicare contribution requirements;
AMA supports the recommendation of the Commission on Social Security that
new federal employees be asked to contribute to Social Security.
employees within the system.
In addition, the AMA offers the suggestion
that Congress may wish to consider increasing the HI portion of the