Perspectives on Medicare: Physicians, patients, politicians, analysts react to report

Medicare needs to change the way it pays physicians or patients are going to lose access to care, according to the American Medical Association (AMA).

On June 18, the Medicare trustees issued their 2025 annual report projecting Medicare’s hospital insurance trust fund would be depleted in 2033, posing a significant financial challenge to the program. The trustees included a suggestion “adding to the drumbeat of similar warnings from policy makers” and the AMA, the association said in its statement about the report.

The trustees acknowledged a problem that physicians, patients, medical organizations and the Medicare Payment Advisory Commission (MedPAC) have recognized for years. The problem: “The Medicare Trustees report pointed out that rising costs are outpacing physician payments. As a result, physician practices are struggling to stay open,” said the AMA summary.

That comes as no surprise, AMA President Bobby Mukkamala, MD, said in a statement.

“As physicians, we are trained to spot trends, but you don’t have to have a medical degree to see this one,” he said in a statement. “While we are grateful for the growing consensus, the problem does not go away by merely recognizing it. Medicare reform must be the next step, and we must do it now.”

Physician pay

Physicians are one of the few Medicare providers who do not get automatic payment updates adjusted for inflation. Accounting for inflation in practice costs, physician reimbursement has dropped 33% from 2001 to 2025, with a 2.83% cut this year. AMA has long argued the decrease disproportionately affects small, independent physician practices, and those serving rural, low-income and underserved communities.

“Medicare Trustees have clearly explained the problem: Physicians are facing high medical inflation and lowered payments,” Mukkamala said. “This year’s 2.8 percent cut is a painful — and ongoing — reminder that the Medicare payment system needs reform. We look forward to advancing many of our thoughts as we work on this issue with Congress and the administration in the coming year.”

AMA’s statement alluded to the House version of the One Big Beautiful Bill Act now pending in the Senate. The House legislation would use the Medicare Economic Index to calculate Medicare payment to physicians starting in 2026, according to an analysis from the American Academy of Family Physicians. AMA hopes to keep that provision in that in the Senate version.

Patient perspective

AARP CEO Myechia Minter-Jordan focused primarily on the report about the financial status of Social Security. It was released the same day and also projected to have its trust fund depleted in 2033, leading to a 19% reduction in benefits a year sooner. She touched on the importance of Medicare.

“Medicare is the primary source of health care for Americans age 65 and older and plays an essential role in negotiating lower prescription drug costs,” she said. “It’s paramount that the program remains financially strong for current and future generations.

“AARP members and older Americans nationwide consistently say that the future of Social Security and Medicare are the issues they care about most, and they stand ready to hold politicians across party lines accountable to strengthen these programs for the long term,” Minter-Jordan said.

Partisan perspective

Senate Finance Committee Ranking Member Sen. Ron Wyden (D-Oregon) issued a statement with a partisan edge and a reference to practices of insurance companies.

“Instead of taking away health care from millions of American families and increasing costs for seniors, Republicans could be working to strengthen Medicare by taking on insurance company practices like upcoding that are driving health costs higher and threatening Medicare’s future,” Wyden said. “Democrats have a plan to make sure Social Security isn’t cut in 2033 without raising taxes on young Americans or cutting benefits for anyone — Republicans can’t say the same.”

What reforms could help?

The Bipartisan Policy Center (BPC) in 2023 published “Sustaining and Improving Medicare: The Path Forward,” a report with a two-phase plan to tackle solvency and affordability challenges, said Andrew Patzman, JD, a senior policy analyst there.

He also cited a Health Affairs Forefront article co-authored by BPC that proposed at least three reforms that would bolster Medicare:

• Site-neutral payment to lessen inequities in Medicare payments to hospitals and other outpatient settings
• A competitive bidding system for Medicare Advantage
• Restraint of hospital consolidation

“Taken together, these changes could offer beneficiaries and taxpayers tens of billions in savings,” Patzman said in his analysis, “A Wake Up Call for Policymakers: Medicare’s Fiscal Outlook Worsens.”

“The annual Medicare Trustees’ report is an important wake up call for policymakers in the executive branch and Congress,” he wrote. “For the ninth straight year, the trustees have issued a Medicare funding warning that calls on the president to propose legislation to bring Medicare spending and revenues in line. This year’s trustees report is a stark reminder that the time for action is now.”