Reps. Cooper and Ryan Call For Medicare Transparency
Yesterday, Reps. Jim Cooper (D-TN) and Paul Ryan (R-WI) introduced H.R. 1252, the “Medicare Information Act” (MedInfo Act). The legislation aims to better inform taxpayers about their individual Medicare contributions and benefits by including information in a yearly statement they already receive about Social Security. The overview of the bill states:
Every year, American taxpayers receive a Social Security letter that provides a concise, user-friendly record of their total contributions and a summary of their estimated annual benefits. The “MedInfo Act” would include Medicare information on this same statement. It would provide every eligible taxpayer and beneficiary, 25 and older, with information on their lifetime Medicare contributions and benefits. Taxpayers deserve to see what contributions they have made to Medicare and what benefits they have already received or are likely to receive. The intent is to facilitate greater understanding of the Medicare program.
Each Medicare statement would include:
- A summary of Medicare's benefits and options
- The individual’s total Hospital Insurance (HI) contributions
- Actuarial estimate of expected contributions during the individual’s lifetime
- Individual’s total received benefits
- Actuarial estimate of actual and/or expected benefits during individual’s lifetime
CRFB board member Gene Steuerle of the Urban Institute wrote an interesting column about paying into Medicare earlier this year. (See Are You Paying Your Fair Share for Medicare?) He referenced work he did that compared average lifetime Medicare benefits and taxes over time. The chart below summarizes some of his findings:
| If You Turn 65 In... |
Lifetime Medicare Benefits | Lifetime Medicare Taxes |
| Single Man | ||
| 1960 | $14,000 | $0 |
| 1980 | $57,000 | $7,800 |
| 2010 | $161,000 | $55,000 |
| 2030 | $251,000 | $84,000 |
| Single Woman | ||
| 1960 | $21,500 | $0 |
| 1980 | $74,800 | $7,800 |
| 2010 | $181,000 | $55,000 |
| 2030 | $279,000 | $84,000 |
| One Earner Couple | ||
| 1960 | $35,000 | $0 |
| 1980 | $132,000 | $7,800 |
| 2010 | $343,000 | $55,000 |
| 2030 | $530,000 | $84,000 |
| Two Earner Couple | ||
| 1960 | $35,000 | $0 |
| 1980 | $132,000 | $15,600 |
| 2010 | $343,000 | $109,000 |
| 2030 | $530,000 | $167,000 |
*Earning average wage - $43,100 in 2010 dollars.
As we and many others have reiterated countless times, entitlement reform will have to be addressed soon and the growing cost of health care will have to be restrained (see some ideas here). The debate over entitlements will accelerate next week when Rep. Ryan unveils his FY 2012 budget proposal on Tuesday, which reportedly will include reforms to Medicare and Medicaid.
Enhanced transparency will be important to reform. The more information taxpayers have concerning their contributions and benefits, the easier it will be for them to adjust to any future changes. CRFB commends Reps. Cooper and Ryan for introducing legislation that would improve transparency. As CRFB president Maya MacGuineas said:
Congressmen Cooper and Ryan are right to emphasize the need for more transparency in the Medicare program. We are going to have to ensure its long-term sustainability, and highlighting the costs and benefits is a useful exercise to help get that discussion underway.
