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The President’s Medicare Executive Order Expands Towards Private Medicare Advantage Over Traditional Medicare

On October 3, 2019 the Trump Administration issued an Executive Order (EO) entitled “Protecting and Improving Medicare for Our Nation’s Seniors.” Since the President’s speech announcing the EO lacked policy specifics, we looked to the administration’s telephone press conference to discern the intentions behind the EO. As expressed by Administration officials on the call, the EO is continuing to promote private Medicare Advantage insurance plans over traditional Medicare. This is part of an ongoing drive to privatize the Medicare program.

In outlining some of the provisions of the EO during the press call, Secretary of Health and Human Services Azar stated a goal is to “ensure that, as much as we can, our Fee-for-Service Medicare program is not advantaged or promoted over Medicare Advantage with respect to its administration.”  Referring to the traditional Medicare program as “fee-for-service,” Secretary Azar responded:  “So the executive order commissions us to examine all practices, regulations, guidance to just make sure that we’re not steering people into Fee-for-Service, as opposed to giving them a genuine choice of Medicare Advantage or Fee-for-Service.”  [Emphasis added].

He continued:  “So we’ll be looking at all of those issues: how does the enrollment process work when new people come in; how the annual enrollment process work; are we providing adequate information through the various plan-finder tools to ensure people can make informed choices, make sure there’s no financial disincentive to being in MA versus Fee-for-Service.  So really, across the board that’s — the executive order is the initiation of the process now of examining all of that […]”

In fact, the Center for Medicare Advocacy (the Center) has documented that this Administration has been promoting Medicare Advantage over traditional Medicare through various means, including the program’s outreach and enrollment materials, marketing policies, and benefits.

Scales Already Tipped in Favor of Medicare Advantage

The Center continues to draw attention to the Medicare Advantage (MA) program’s growing imbalance with traditional Medicare.  A number of legislative and regulatory policy changes have tipped the scales in favor of MA.  For example, coverage expansions such as the ability to provide new supplemental benefits have been advanced in MA, but not in traditional Medicare. In recent years, this has been exacerbated by a concerted effort on the part of the Medicare program to steer beneficiaries toward enrollment in private MA plans rather than providing objective, neutral information about coverage options.

Despite provisions of the Affordable Care Act that reined in excessive overpayments to MA plans, there is still evidence that MA is costing the Medicare program more than traditional Medicare spends per individual, with mixed health outcomes.

At the very least, there must be payment parity between traditional Medicare and private MA plans. As we have stated elsewhere, wasteful spending on MA should be reinvested into the Medicare program to the benefit of all people with Medicare, not just those who choose to enroll in private plans.

The President Should Work to Improve Health Care for All Rather than Attacking Proposals to Expand Coverage

Instead of focusing on policy proposals that would improve people’s health care now, the President’s speech announcing the EO relied on tired tropes about the threat of “socialism” without a hint of irony relating to the red scare tactics used to try to defeat the original passage of the Medicare program.  As noted by the Washington Post’s Health 202 in September 2018, “Medicare as it exists today – a government-run service for all elderly Americans – is the closest thing America has to socialized medicine. And there’s nothing in Democratic proposals that indicate that expanding it would make the program less available for current recipients.”

Further, as noted in today’s Health 202, “the president will promise to strengthen Medicare Advantage as a way of improving health-care coverage for millions — even as his administration refuses to defend the Affordable Care Act in a high-stakes lawsuit in which a ruling is expected any day now.”

Only about one-third of Medicare beneficiaries are enrolled in Medicare Advantage plans; the rest choose traditional Medicare. Proposals that only help those enrolled in private MA plans leave behind the vast majority of older adults and those with disabilities who rely on Medicare, while building a path to a private, HMO-like Medicare program. The Center for Medicare Advocacy has developed a Medicare Platform that outlines various proposals that would improve the program for all, including parity between traditional Medicare and Medicare Advantage plans.

As Judith Stein, Executive Director of the Center for Medicare Advocacy, notes, “This Executive Order is designed to bolster the insurance industry by steering beneficiaries into private Medicare Advantage plans, at the expense of most beneficiaries and Medicare’s future. If the Administration truly cares about improving access to Medicare and health care, it will work to improve quality coverage for all Medicare beneficiaries, including those in traditional Medicare.”

October 4, 2019 at 3:50 pm Leave a comment

Center for Medicare Advocacy Files Amicus Brief In Support of the Affordable Care Act

On April 1, 2019 the Center for Medicare Advocacy joined AARP and Justice in Aging in filing an amicus brief in Texas v. United States, urging the Fifth Circuit Court of Appeals to reverse the trial court’s December 2018 ruling that would nullify the entire Affordable Care Act (ACA). The three organizations highlight the ACA’s critical protections for older adults and the disastrous ramifications that would ensue if the law were to be struck down. The amicus brief was filed in support of the appellant states, which are led by California. Last week, the U.S. Department of Justice announced a new, more extreme position in the case, maintaining that the entire law must be invalidated.

The brief explains that the ACA is a lifeline for older adults, who rely on it for their health and financial stability. For “pre-Medicare” individuals, ages 50-64, the law guarantees coverage of preexisting conditions and limits how much more insurers can charge based on age. For Medicare beneficiaries, the ACA lowers medical costs by, among other things, closing the “doughnut hole” in the Medicare Part D prescription drug benefit. That provision alone has saved more than 11.8 million Medicare beneficiaries over $26.8 billion. The law eliminated out-of-pocket costs for numerous preventive services. The ACA also helps nursing facility residents by protecting against fraud and abuse. Finally, the ACA strengthens the financial solvency of the Medicare program, having extended the life of the Medicare Trust Fund by approximately eight years.

“If the ACA is struck down,” said Judith Stein, Executive Director of the Center for Medicare Advocacy, “millions of older adults and people with disabilities will lose the health care coverage and consumer protections they have relied on for almost a decade.” Because the ACA contains around 165 provisions that impact Medicare, it will also throw the Medicare program into fiscal and administrative turmoil, which will disrupt the nation’s health care system and economy.  It will plunge the more than 100 million people with preexisting conditions into uncertainty about whether they can obtain coverage.

As the brief states:

The ACA is deeply rooted into the nation’s health care system and economy. Millions of Americans depend on the Act for their health, protection, and well-being. Their lives now hang in the balance…. The ACA is the law of the land.

April 3, 2019 at 8:06 pm Leave a comment

Medicare Platform: Core Considerations for Today & Tomorrow

The Center for Medicare Advocacy works for a comprehensive Medicare program and quality health coverage and care for all people. To accomplish these goals for current and future beneficiaries in the changing health care environment, we seek to:

  • Improve Medicare for current and future beneficiaries.
  • Support the development of the best method possible to increase access to quality health coverage and care for the most people.

Medicare Platform to Improve Medicare for all beneficiaries, now and in the future:

1. Consumer Protections and Quality Coverage for All Medicare Beneficiaries (Including Parity Between Traditional Medicare and Medicare Advantage)

  • Cap out-of-pocket costs in traditional Medicare
  • Require Medigap plans to be available to all individuals in traditional Medicare, regardless of pre-existing conditions and age (“Guarantee Issue” and “Community Rating”)
  • Ensure all benefits in Medicare Advantage are also available in traditional Medicare
    • For example, include all MA “supplemental benefits,” waiver of 3-day prior hospital stay requirement for SNF coverage, coverage for home health aides, coordinated care
  • Simplify enrollment in traditional Medicare, Part D and Medigap, and ease transitions from other insurances to Medicare
  • Improve consumer protections in Medicare Advantage
    • Standardize benefit packages,
    • Strengthen network adequacy requirements
    • Strengthen plan oversight
    • Strengthen marketing protections
  • Ensure parity between mental health and physical health coverage
  • Ensure the Medicare appeals system is cost-effective, accessible and fair

2. Reduce Ongoing Barriers to Care

  • Eliminate the harm of hospital “Observation Status”
  • Home Health – Ensure access to coverage is actually available for all beneficiaries who meet coverage criteria, ensure access to legally authorized home health aides, resolve conflicts between payment models and coverage laws
  • Jimmo Implementation – Ensure beneficiaries with longer-term, chronic, and/or debilitating conditions have full access to skilled nursing, therapy and related care needed to maintain their conditions or slow decline

3. Improve Traditional Medicare

  • Add oral health, audiology, vision coverage
  • Restructure Medicare to make it comprehensive, simpler and affordable
  • Increase Low-Income Protections in the Medicare Savings Program (at least on par with ACA subsidies)
  • Long-term Care – Add coverage over time. For now, make incremental improvements (For example, repeal homebound requirement for home health coverage, repeal requirement that individual need skilled care and be homebound to qualify for home health aide coverage, repeal requirement that DME generally be needed in the home)

1/2019

January 30, 2019 at 3:11 pm Leave a comment

We Reiterate: Why Let it Continue?

The January 4th New York Times story, “The Hidden Financial Incentives Behind Your Shorter Hospital Stay,” describes how hospital stays classified under “Observation Status” are skewing admission and readmission data. As Dr. Jha states in the article, Observation Status is driven by incentives for the hospital. This is an ever-increasing phenomena in which Medicare deems patients as “outpatients,” although they are in the hospitals for days.

The Center for Medicare Advocacy has worked for many years to end the harm that Observation Status causes people who rely on Medicare. We have helped hundreds of beneficiaries and families, assembled a broad national coalition to support legislation to fix the problem, and filed lawsuits on behalf of elderly patients.

“Outpatient” hospital observation status limits access to necessary post-hospital nursing home care, alters public health data regarding hospital admissions and readmissions, increases Part B costs and cost-sharing, and creates lengthy delays in the Medicare appeals system. With all this harm, one must ask: Why does the Centers for Medicare & Medicaid Services insist on continuing this dreadful policy?

January 21, 2016 at 3:53 pm Leave a comment

Why Continue Observation Status?

The December 2, 2015 Wall Street Journal story “Medicare Rules Reshape Hospital Admissions” described how hospital stays classified under “observation status” can lead to big bills for patients without their knowledge.

The Center for Medicare Advocacy has worked for many years to eliminate, or at least reduce, the harm that observation status causes people who rely on Medicare.  We have developed self-help materials,http://www.medicareadvocacy.org/self-help-packet-for-medicare-observation-status/, assisted beneficiaries and families, brought together a coalition of national organizations to support federal legislation that would fix the problem, and filed lawsuits.

“Outpatient” hospital observation status is limiting access to necessary nursing home care, skewing public health data regarding hospital admissions and readmissions, increasing Part B costs and cost-sharing, and creating lengthy delays in the Medicare appeals system. With all this harm, one must ask: Why does the Centers for Medicare & Medicaid Services insist on continuing this dreadful policy?

December 14, 2015 at 7:35 pm Leave a comment

Solution to Medicare Part B Cost Increases? Look at “Observation Status”

If Congress and the Administration truly seek ways to limit Medicare premiums and deductibles (Robert Pear, 10/6/2015, and 10/15/2015), they ought to look at the Medicare agency’s hospital Observation Status policy.

A major cause of the Part B increase is likely the parallel increase in so-called “outpatient” observation status. The result of this misguided policy is that unprecedented amounts of hospital care are being billed to Medicare Part B, rather than Part A. This was never intended by the law. In fact Part A is called “Hospital Insurance” in the Medicare Act. Yet, thousands of patients stay days in hospitals only to learn they were not admitted as inpatients. Instead, they are classified as outpatients on observation status. One of the myriad consequences of this policy is that Part B expenses are sky rocketing – increasing Part B premiums and deductibles and cost shifting to Medicare beneficiaries.

October 15, 2015 at 3:25 pm Leave a comment

The Ryan Budget: Déjà Vu All Over Again (Again)

On April 1st Representative Paul Ryan rolled out yet another “Path to Prosperity,” as he annually calls his budget.  Unfortunately, the budget is a repeat of past year plans and is not a path to prosperity for most Americans – or for Medicare.

Once again, Rep. Ryan’s budget proposes a private approach to Medicare:

For future retirees, the budget supports an approach known as ‘premium support.’ Starting in 2024, seniors (those who first become eligible by turning 65 on or after January 1, 2024) would be given a choice of private plans competing alongside the traditional fee-for-service Medicare program.

Rep. Ryan has proposed “premium support” for future Medicare participants many times in the past.  While his budget assures us that “this is not a voucher program,” it is, once again, a proposal to pay a certain amount towards private insurance for Medicare beneficiaries. Ironically, Mr. Ryan states such insurance plans “would be available in a newly created Medicare Exchange.” This is ironic because the proposal is remarkably similar to the Affordable Care Act marketplace that is so maligned by Mr. Ryan and his colleagues.

Rep. Ryan suggests that changing Medicare to premium support is needed because

the government has been … a clumsy, ineffective steward of value. Controlling costs in an open-ended fee-for-service system has proved impossible to do without limiting access or sacrificing quality.

In fact, over the last few years traditional Medicare per-capita cost growth has declined, leading the way to parallel reductions in the rise of overall healthcare costs.

The unnecessary costs for the government, taxpayers, and all Medicare beneficiaries that need controlling are the hundreds of billions of dollars in excess payments to private Medicare Advantage plans under Medicare Part C and private pharmaceutical companies under Medicare Part D.  These unnecessary private industry payments are the real threat to Medicare’s future.  If Mr. Ryan’s goal is really to save money and preserve a strong Medicare program, he would look to these cost overruns for savings. He certainly would not propose further privatizing Medicare.

However, the latest Path to Prosperity does again seek to privatize Medicare. At the same time it would reduce Medicare’s value to older people and people with disabilities by:

  • Increasing the age of eligibility to 67.
  • Charging more for Medigap coverage.
  • Combining Parts A and B cost-sharing, thereby increasing costs for most beneficiaries.
  • Increasing premiums for more beneficiaries.

Regrettably, the Ryan plan may provide a continued path to prosperity for private insurance and pharmaceutical companies, but it is a dead end for Medicare, older people and people with disabilities.

April 3, 2014 at 8:26 pm 1 comment

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