New Recommendations to Modernize Medicare, Improve Sustainability

Washington, DC – More than 65 million older Americans and those with disabilities depend on Medicare for their health care needs, but as the population ages rapidly, the program has encountered escalating financial challenges. In recent years, expenditures have consistently outpaced dedicated revenue streams, creating a pressing need for reforms.

While policymakers have been reluctant to tackle Medicare’s long-term solvency, the Bipartisan Policy Center (BPC), with the support of Arnold Foundation, released a new report, Sustaining and Improving Medicare: The Path Forward, which outlines a politically viable path forward. BPC’s road map for bipartisan congressional action proposes a two-step process.

In Phase 1, BPC urges Congress to promptly tackle the imminent insolvency and affordability challenges facing Medicare’s Hospital Insurance (HI) Trust Fund, which is expected to be depleted by 2031. The approach involves slowing spending increases and boosting revenues while concurrently strengthening Traditional Medicare (TM). Additionally, Phase 1 addresses the enforcement of previously disregarded triggers meant to prompt action when federal spending on Medicare surpasses revenues.

Phase 2 proposes establishing direct, fair competition between Traditional Medicare and Medicare Advantage (MA). In doing so, beneficiaries would be able to compare their coverage options from a standard set of enhanced benefits.

BPC encourages Congress to embrace both phases of the road map, recognizing that efficient competition alone will not resolve all solvency and affordability issues facing the program. Enhanced revenues and payment reforms must be part of any bipartisan compromise that thoughtfully addresses solvency.

“Medicare stands at a critical juncture, as the gap between rising spending and lagging revenue widens rapidly,” said Marilyn Serafini, executive director of BPC’s Health Program. “At the same time, many beneficiaries are struggling to pay their share of the cost and to navigate this complex program. Congress must acknowledge these pressing issues and come together to ensure Medicare’s longevity and meet the needs of both beneficiaries and taxpayers.”

For more information on BPC’s recommendations for Medicare, see the full report.