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RAC Facts: Medicare’s 50th Anniversary: What Does The Future Hold?

Medicare’s 50th Anniversary: What Does The Future Hold?
Medicare is celebrating its 50th anniversary this month, but when the program reaches the age at which most beneficiaries enroll – 65 – it may be bankrupt.

Over the past five decades, Medicare has had a tremendous impact:

  • Today, Medicare covers 55 million Americans who are over 65 years old or disabled.
  • The program has contributed to a five-year increase in life expectancy at age 65.
  • Now, only 2% of Americans over 65 years of age lack health insurance.
  • 21% of the elderly are admitted to hospitals now, compared 18 percent before Medicare.
  • 76% of older Americans go to a physician each year, compared to 68% before the program existed.

As the program celebrates this milestone, many Americans are concerned about its financial future:

  • A recent Kaiser Family Foundation (KFF) poll indicates more than half of Americans say they are not confident in Medicare’s ability to continue to provide future beneficiaries the same level of benefits that seniors receive today.
  • A startling Medicare Trustee report has warned that the Medicare Trust Fund may not be around to support these future generations, predicting that the fund will be insolvent in just 15 years, by 2030.
  • A recent Government Accountability Office (GAO) report states that rampant improper billing exists within the Medicare program. In 2014 alone, the improper payment rate rose to 12.7% – the highest in program history – and Medicare overpaid hospitals and other healthcare providers nearly $46 billion for services that were unnecessary or billed improperly.

​But there is a way, at the very least, to prolong the lifetime of the Medicare Trust Fund without cutting benefits or payments to providers: The Recovery Audit Contractor (RAC) program.

  • The program has returned $10 billion to the fund and extended its lifetime by two years.
  • RACs review only 2% of Medicare claims, identify areas where improper billing is taking place, correct the claims and request that the overages are paid back to Medicare.
  • Medicare pays nothing up front for RACs to do this work; instead, RACs are on the hook to perform well at their work if they wish to get paid.

As we celebrate the past 50 years of Medicare and the health benefits it has brought to tens of millions of Americans, we must look forward to preserve the future of the program.

Policymakers must make the work of the RAC program to recoup lost Medicare dollars a priority. Fifteen years is not that far away and if the program bankrupts, the impact on beneficiaries and their families will be devastating.

Members of Congress must stand up for Medicare efficiency and oversight to ensure that the program is not being taken advantage of by corporations and healthcare entities looking only to make the biggest profit. Together, we can give Medicare the greatest birthday gift of all – the gift of longevity.

 

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