Sen. Biden continued, “The whole notion is changing the paradigm—front end, costs; back end, significant savings. One of the problems with the mentality of American businesses and insurance companies is that they always think about the next quarter. Very seldom does anyone think about next year or 5 years or 7 years. If we're going to get these costs under control, it seems to me you've got to be investing now.”
Medicare costs will grow dramatically over the next decade, largely because the Baby Boom generation will be retiring, Sen. Biden said. He offered three suggestions for cutting Medicare costs.
First, “we should be reimbursing private insurers [who participate in the Medicare Advantage program] the same way we reimburse everyone else. We're reimbursing them about $10 billion a year beyond what we're reimbursing others.” Second, “being able to negotiate price relative to cost of drugs, like we do in the Veterans Administration, would significantly reduce the cost.” Third, if he can implement his plans for an increased focus on prevention, “by the time people hit the Medicare system who are now in their 30s and 40s, they'll have much more control of these chronic diseases.”
If other cost cuts are needed, “in the first year, I think I can cut the Defense Department by over $160 billion by ending the war in Iraq” and implementing other savings there, the senator said.
Medicare costs will grow dramatically over the next decade, largely because of Baby Boomers retiring. SEN. BIDEN