April 24, 2014

CONCORD COALITION CO-CHAIR BOB KERREY WARNS AGAINST ADDING PRESCRIPTION DRUG BENEFIT TO CURRENT MEDICARE SYSTEM

WASHINGTON – In testimony before the Senate Finance Committee today, The Concord Coalition's Co-Chairman, former Sen. Bob Kerrey (D-NE), urged Congress to tackle fundamental health care reform before adding a new prescription drug benefit to Medicare.

Kerrey told the committee: “You have invited me to testify on the question of adding a prescription drug benefit to Medicare.   My simple advice is don't do it.  Not unless you are prepared to make fundamental reforms in the way Americans finance the cost of their health care.  Adding a prescription benefit to Medicare without fundamental reform will partially solve one problem while increasing the size of several others.”

Kerrey reminded the committee of how dramatically the fiscal outlook has deteriorated in just one year. He noted: “The debt limit will be reached this year - maybe this month - and net interest payments over the next ten year period will be $l trillion more than expected last year.   That is $10,000 per American household or $1,000 per household per year.”  He warned that a new prescription drug benefit would have to compete with the demand for spending on other popular programs such as education, child care, transportation, and technology for an already shrinking share of available Federal dollars.

“Too many citizens answer the question where are we going to get the money for a prescription benefit with: ‘The government will pay for it.' Current beneficiaries need to understand that most of the money for this benefit will not come from them.  Most of the money will come from a tax on the wages and salaries of Americans who are in the work force.   And a growing number of these workers, who are seeing an increasing share of their income going to insure someone else, do not have health insurance themselves.” 

“The bottom line is that there is no room to add a major entitlement expansion such as a Medicare prescription drug benefit.  Such an addition – as worthy as it may seem in isolation – would significantly impair the financial future of working men and women, the people who pay the bills.  And their financial future has already deteriorated significantly in just one year.”

Kerrey concluded by noting that, “while technology and the trend towards longer life expectancies have increased the cost of Medicare and Social Security we should not let the actuaries persuade us that this is bad news.  In my case I will need that extra longevity in order to attend my second son, Henry's, college graduation in 2022. In many other cases Americans are entering the last phase of their lives with more optimism and health than ever before in part thanks to Medicare and Social Security.   I trust that you have the wisdom and the desire to make certain both will be there for many generations to come.”