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Fifth District Report

Column by Tom Perriello

Medicare is a critical part of our promise to our seniors and it must be protected. I want to clear up some misinformation about recent changes to Medicare and explain some recent victories for Virginia’s seniors that I have been working for in Congress relating to health-insurance and prescription-drug coverage.

Recent health-care reform proposals significantly extend the financial solvency of Medicare. Without reform, the quickly rising cost of health care will bankrupt the Medicare trust fund, possibly in less than 10 years. One of the reasons why health-care reform is urgently needed is to guarantee the long-term solvency of Medicare. I supported the Affordable Health Care for America Act, which will extend the life of the Medicare trust fund by five years or more as the reforms in the bill bring down health-care costs across the board.

Last week, I voted in favor of the Medicare Physician Payment Reform Act, which passed the U.S. House. This legislation will stop a 21 percent fee reduction for doctors accepting Medicare patients. These cuts would have taken affect in January 2010 and might have meant that some doctors stopped accepting Medicare patients. This bill established a permanent fix in the way Medicare pays physicians and was strongly supported by the American Medical Association.

Over the last several years, Congress has been forced to prevent significant cuts to the Medicare physician payment rate, as determined by the Sustainable Growth Rate. If we had not fixed the reimbursements, these cuts would also have affected veterans receiving TriCare coverage and might have meant doctors withdrawing from such programs. The bill passed by the U.S. House stops the scheduled cut for next year, and establishes a new rate that will not be subject to future, unsustainable cuts.

Permanent reform of physician payments in Medicare will help guarantee that Medicare beneficiaries continue to enjoy the excellent access to care that they do today. Reforming the Sustainable Growth Rate standard has long been cited as one of the top priorities for numerous medical and seniors organizations. As a result, the Medicare Physician Payment Reform Act is supported by American Medical Association, the AARP, the Military Officers Association of America, the American Academy of Family Physicians, and the National Committee to Preserve Social Security and Medicare, among others.

I also want to clear up questions that have been raised by some about pending changes to Medicare Advantage. Medicare Advantage (MA) is different from traditional Medicare because these plans are owned by private insurance companies. Although bringing private insurers into Medicare was supposed to provide services for a lower cost, we now know that MA plans are paid on average 14 percent more than it costs to provide care through traditional Medicare. MA overpayments currently exceed $1,000 per enrollee every year. This means that 75% of traditional Medicare beneficiaries pay higher premiums every month to subsidize these private plans. The rest of MA overpayments are paid for by the American taxpayer.

The Affordable Health Care for America Act phases out these overpayments over three years starting in 2011 so that MA plans will be paid on a level playing field with traditional Medicare. By eliminating these overpayments, the legislation restores equity in the program and requires MA plans to become more efficient competitors. Under these reforms, plans will compete on price and quality – the way it should be.

Recent changes should secure and extend Medicare coverage for seniors. If you have questions about these changes, please feel free to contact me to share your concerns and ideas. You may call 1-888-4-TOM4US (1-888-486-6487); write to 1520 Longworth House Office Building, Washington, DC 20515; or visit to sign up for my weekly e-newsletter.


Tom Perriello represents the Fifth District of Virginia in the United States House of Representatives.

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