Created in 1965, Medicare serves as the primary means of health care coverage for America’s seniors as well as disabled individuals.

In 2013, Medicare provided health care coverage to 52.3 million people: 43.5 million aged 65 and older, and 8.8 million disabled Americans.  The U.S. Census Bureau estimates that Americans aged 65 or older will grow from about 43 million to about 75 million over the next 20 years-- an increase of more than 70 percent.

Medicare is the largest single purchaser of health care in the United States, and hospitals represent the largest component of Medicare spending – estimated at approximately $250 billion in annual spending for 2014 by the Office of the Actuary within the Centers for Medicare and Medicaid Services, which manages the Medicare and Medicaid programs OACT.

The Medicare Payment Advisory Commission (MedPAC), which advises Congress on Medicare policy, tracks the costs and payments of Medicare, assessing the margin between the two.  MedPAC has documented that the cost of care hospitals provide to Medicare beneficiaries has exceeded Medicare payments  since 2003, creating what is known as a negative Medicare margin.  MedPAC projects that Medicare hospital margins in 2015 will reach an a record low of  -9% in 2015. 

A negative Medicare margin trend is unsustainable, especially in light of the changing demographics in America which will generate a substantial surge in American senior citizens.  Americans who reach 65 years of age expect and deserve access to the hospital care they need through Medicare.

It is imperative that Medicare payment policy enable hospitals to keep pace with the increasing demands of the rapidly growing population of seniors, as well as disabled Americans, who rely on the Medicare program.

Sources:  MedPAC, OACT, CBO.

FAH Applauds House Passage of H.R. 2

March 26, 2015 | Chip Kahn Category: Health Care Delivery, Legislation, Medicare

The Federation of American Hospitals applauds the Members of Congress who voted today in support of The Medicare Access and CHIP Reauthorization Act of 2015 (H.R. 2). This overwhelming and bipartisan vote is a strong message of support for current and future Medicare patients and their caregivers.
With the passage of this legislation, seniors are one step closer to ensuring they will have access to the essential care they need when they need it.

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