Posts filed under ‘Health Care Reform Repeal’
Breaking Good News for Medicare Beneficiaries
Part B Cost-Sharing Lower Than Expected for 2012
Today the Obama Administration announced that Part B cost-sharing will be less than projected for all beneficiaries in 2012. The Part B deductible will decrease by $22 in 2012, from $162 per year in 2011 to $140 in 2012. Further, monthly Part B premiums will increase only slightly for those beneficiaries who have not had an increase in the last two years. Because there will be a cost-of-living increase for Social Security recipients in 2012, the Part B premium will increase, but only by $3.50 – from $96.40 in 2011 to $99.90 in 2012.[1] For those individuals who did have Part B premium increases in 2010 and 2011, the premium will actually decrease by $15.10 in 2012, from $115 to $99.90.
The Part B premium reductions are a result of slower Part B growth due in part to health care reform. The Affordable Care Act’s lower payment rates, reduced payments to private Medicare plans, and increased efforts to fight fraud and abuse are major factors contributing to this good news for Medicare, beneficiaries, and taxpayers. At the same time, health care reform has increased the value of Medicare – reducing beneficiary costs for prescription drugs, adding preventive care coverage, and eliminating cost-sharing for most preventive services.
In summary, between reduced Part B premiums and increased Social Security payments, the average Social Security recipient will have a net cost-of-living increase of $40 per month in 2012. Good news indeed.
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[1] In 2010 and 2011, most beneficiaries were “held harmless” from the Part B premium increase because they did not have an increase in their Social Security.
Six Solutions for Medicare Solvency and Reducing the Deficit
As lawmakers debate the future of Medicare as part of broader efforts to address the federal deficit, proposals have emerged that would have severe repercussions for beneficiaries and their families.[1] Sound solutions that would protect Medicare coverage while reducing costs to taxpayers have not been seriously addressed. The six solutions we propose would accomplish both of these goals.
These solutions, unlike many current proposals, do not shift costs to beneficiaries or completely restructure the Medicare program. They promote choice and competition while shoring up the solvency of Medicare. Adopting these solutions would be a responsible step in reducing our deficit the right way.
1. Negotiate Drug Prices with Pharmaceutical Companies
The Medicare prescription drug law passed in 2003 prohibits the Secretary of Health and Human Services from negotiating prices with pharmaceutical companies. These companies gained 47 million customers when Medicare began covering prescription drugs, but they did not have to adjust their prices in return. Requiring the Secretary to negotiate drug prices for Medicare would save taxpayers billions of dollars – potentially over $200 billion over ten years.[2] Taxpayers currently pay nearly 70% more for drugs in the Medicare program than through the Veteran’s Administration, which has direct negotiating power.[3] Savings realized from reducing Medicare drug cuts could be used to improve benefits for beneficiaries and reduce the deficit.
2. Stop Paying Private Medicare Plans Anything More Than Traditional Medicare
According to the Medicare Payment Advisory Commission (MedPAC), Medicare pays, on average, 10% more for beneficiaries enrolled in private insurance (Medicare Advantage or MA plans) than for comparable beneficiaries enrolled in traditional Medicare.[4] Despite these extra payments, beneficiaries in private plans who are in poor health, or who have chronic conditions, often have more limitations on coverage than they would under traditional Medicare.[5]
A large portion of the overpayments made to private plans actually goes to insurers rather than to benefit Medicare beneficiaries.[6] Although the Affordable Care Act (ACA) changed the payment formula for Medicare Advantage plans, some plans will continue to be paid as much as 115% of the average traditional Medicare payment rate for their county when the new rates are fully implemented. MedPAC estimates that by 2017Medicare Advantage payment benchmarks will average 101% of traditional Medicare. ACA also provides additional payments for plans that receive high quality ratings, increasing the likelihood that some MA plans will continue to be paid more than under traditional Medicare. Reducing private MA payments to 100% of traditional Medicare, as MedPAC proposed before the enactment of ACA, will increase the solvency of the Medicare program and curb costs for taxpayers. Private plans simply should not receive higher pay than traditional Medicare.
3. Include a Drug Benefit in Traditional Medicare
Offering a drug benefit in traditional Medicare would give beneficiaries a choice they do not now have, encourage people to stay in traditional Medicare, and save money for taxpayers. It would also provide an alternative to unchecked private plans that leave many with unexpected high out-of-pocket costs. A drug benefit in traditional Medicare would protect beneficiaries against expensive and sometimes abusive marketing practices. Further, traditional Medicare’s lower administrative costs could free up money for quality care, would result in lower drug prices for beneficiaries, and save taxpayers over $20 billion a year.[7]
4. Extend Medicaid Drug Rebates to Medicare Beneficiaries Who Are Dually Eligible or Part D Low-Income Subsidy Participants
Dual eligibles (people eligible for both Medicare and Medicaid) comprise one-fourth of all Medicare drug users, and are among the most costly beneficiaries. Because Medicare, rather than Medicaid, covers most of their drugs and because Medicare cannot negotiate drug prices, their drugs are not eligible for the same rebates as they would be under the traditional Medicaid program. Extending these rebates for dually eligible people as well as for those who qualify for the Part D Low-Income Subsidy – the poorest Medicare beneficiaries – would save approximately $135 billion over ten years.[8]
5. Lower the Age of Medicare Eligibility
People between 55 and 65 who are not disabled are currently unable to enroll in Medicare. Lowering the age of eligibility to enroll this healthier population in the Medicare program would add revenue from people who will likely need less care and fewer services than older and disabled enrollees.
6. Let the Affordable Care Act Do Its Job
The Affordable Care Act includes many measures to control costs as well as models for reform that will increase the solvency of the Medicare program and lower the deficit while protecting Medicare’s guaranteed benefits. The Congressional Budget Office estimates that repealing or defunding ACA would add $230 billion to the deficit while ignoring the real issue of rising overall health care costs, which contribute heavily to the growing national debt. ACA includes strong measures to allow CMS to combat fraud, waste, and abuse that will bring down costs, as well as a variety of pilot and demonstration projects that aim to bring better care and quality to beneficiaries.[9] The bipartisan Bowles-Simpson Deficit Commission recommended that these projects be implemented as quickly as possible.[10] Allowing ACA to do its job will create a foundation on which to build by improving care and holding down costs for taxpayers.
Conclusion
“Protecting Medicare” by shifting costs from the federal government to beneficiaries and their families – whether through a voucher program or spending caps or other draconian measures – is a perversion of Medicare’s original intent: to protect older people and their families from illness and financial ruin due to health care costs. The Center for Medicare Advocacy’s Six Solutions promote the financial welfare of Medicare and the country, without doing so at the expense of older and disabled people.
[1]See previous Alerts from the Center, “Why Medicaid Matters to Medicare Beneficiaries and Their Families”, “What Happens to Current Nursing Home Residents if House Budget Resolution Becomes Law?”
[2]National Committee to Preserve Social Security and Medicare, available at http://www.ncpssm.org/pdf/price_negotiation_part_d.pdf
[3]Center for Economic and Policy Research, “Negotiating Prices with Drug Companies Could Save Medicare $30 Billion”, March 2007, available at http://www.cepr.net/index.php/press-releases/press-releases/negotiating-prices-with-drug-companies-could-save-medicare-30-billion.
[4]MedPAC, Report to the Congress, March 2011, Chapter 12 (March 2011), available at http://www.medpac.gov/documents/Mar11_EntireReport.pdf.
[5] Neuman P. Medicare Advantage: Key Issues and Implications for Beneficiaries. Testimony before the House Committee on the Budget, United States House of Representatives, June 28, 2007, available at http://www.allhealth.org/briefingmaterials/NeumanTestimony-830.pdf,
[6] Medicare Payment Advisory Commission. March 2009 Report to Congress, Chapter 3: The Medicare Advantage Program. P. 251-253, available at http://www.medpac.gov/chapters/Mar09_Ch03.pdf.
[7]Senator Dick Durbin, available at http://durbin.senate.gov/public/index.cfm/pressreleases?ID=555cc1e8-cc54-4ead-9d85-d5e6275b3789.
[8]Office of Management and Buget Congressional Budget Office, Living Within Our Means (September, 2011); Letter to Honorable Charles Rangel, available at http://www.cbo.gov/ftpdocs/104xx/doc10464/hr3200.pdf
[9]See previous Alert from the Center, “Combating Fraud, Waste, and Abuse in Health Care.”
[10]The National Commission on Fiscal Responsibility and Reform, “The Moment of Truth,” December 2010.
Medicare and Jobs: Not Mutually Exclusive!
The more people have health insurance, including Medicare, the more they stay healthy and are able to work. If health insurance is provided by Medicare or health care reform or any avenue outside the tired employer-based system, it reduces costs for employers and encourages hiring. Ask any employer.
Continuing to tie health insurance to employment only continues a system that COSTS jobs. It creates a disincentive for employers to hire. It creates an incentive for the new employment reality: Freelance, contract work, part-time, whatever you want to call the newly underemployed who do not have benefits and for whom employers do not pay into Medicare, Social Security, Unemployment, or Workers Comp. This is a big problem for everyone involved, including individual workers, their families, AND the solvency of important programs that Americans value and that have lifted generations out of poverty and provided fair access to health care.
Pay attention, people! We not only can have Medicare and jobs – we will have more jobs if we increase access to Medicare and health care. Don’t raid Medicare to pay for jobs. That will only reduce access to both.
We’re Not the Only Ones Saying It: Let ACA Work!
As the Center has written, letting the Affordable Care Act do its job is a key component to reducing rising health care costs. Lawmakers appointed to the “Super Committee,” tasked with finding $1.5 trillion in deficit-reductions, will be considering various options to meet their budgeting goals. While doing so, we urge them to heed the words of Paul Van de Water of the Center on Budget and Policy Priorities, who writes:
“The Affordable Care Act (ACA) holds the potential to vastly improve Medicare’s long-term financial outlook…These reforms will take time to plan, test, and implement. But they can succeed only if we give them a chance, and that won’t happen if health reform opponents succeed in repealing them.” (Read the rest of the Van de Water’s blog at: http://www.offthechartsblog.org/the-%E2%80%9Csupercommittee%E2%80%9D-and-medicare/)
Support health care reform and reasoned approaches to our national budget concerns. Let ACA work!
What’s The Benefit of De-Funding Health Care Reform?
The House of Representatives will vote today on an amendment to the 2011 Continuing Budget Resolution that would prevent all spending to implement the Affordable Care Act, the health reform law enacted almost one year ago. “This amendment is not in the interest of Medicare, the current fiscal crisis, or families,” says Judith Stein, executive director of the Center for Medicare Advocacy. “Defunding health care reform would endanger children who have pre-existing conditions, deprive uninsured young adults from coverage under their parents’ plans, limit Medicare coverage for preventive services, and end important consumer protections for Americans of all ages.” The amendment to defund health care reform would also eliminate tax credits to small business for providing health coverage to their employees, and would increase the deficit by over $200 billion over the next 10 years.
The Center for Medicare Advocacy has already seen how health reform has improved the lives of millions of people. For example:
• Our clients who are Medicare beneficiaries no longer have to pay cost-sharing for preventive services, and they are now eligible for an annual wellness visit.
• Those with high prescription drug costs will pay less out of pocket for their medicine when they enter the prescription drug donut hole or coverage gap.
• Fewer older people with both Medicare and Medicaid had to change their prescription drug plan in order to be in $0-premium Medicare drug plan.
• Four of our own Center staff members have young adult children who are now covered by the Center’s health plan; without the coverage they would be uninsured.
If the House votes to defund implementation of health reform, all of these people, and millions like them throughout the country, will lose the protections they have already received.
“This amendment is driven by ideology, not serious concern for the welfare of Americans, Medicare, small business, or the American economy,” continues Ms. Stein. We urge Congress not to move backwards by depriving Americans of increased access to fair, affordable health care. Implementation of the Affordable Care Act should be fully funded and should go forward so that, by 2014, all Americans have health insurance, regardless of their age, income, or health status.
Health Care Reform: A Family Value – Support it!
While some work to repeal Health Care Reform, others are already benefiting from its provisions.
People who have already benefited from health reform are at both ends of the age spectrum. Young and old, they reflect the family value of the law, particularly given these tough economic times when jobs are lost, unavailable, and employers are increasingly dropping benefits.
Here are some stories the Center for Medicare Advocacy has heard in just the last day:
1. A Connecticut State Health Insurance and Assistance Program (SHIP) counselor writes: “I know a lot of our seniors will benefit from the government slowly getting rid of the Donut Hole in prescription drug coverage.” This is echoed by many others including:
• An older Connecticut woman and her niece, from Delaware, both went into the Donut Hole in 2010 and both received $250 as a result of health care reform to help out.
• A gentleman from Florida reached the Donut Hole in both 2009 and 2010, and expects to do so again in 2011. He appreciated the $250 help in 2010 and, given his heart and other health problems, he will certainly benefit from health reform’s 50% discount on Brand name drugs in 2011.
2. Another individual writes:
• “I have a sister who is 25 years old and was unable to find a job that would provide health care coverage due to the economy. She has very serious ear problems and required two major surgeries to replace her ear drum in both ears. If she was not able to be on our parents’ health insurance plan, she would not have been able to afford the surgeries and would have gone completely deaf. It is very difficult to be a young person out of college during these times. Even if you can find a job, it is very difficult to find a full time job with health benefits. I consider myself extremely lucky that I did find a job with benefits, but do know many who had no health insurance for some time. These young people need the cushion of being on their parents’ insurance until 26 when they can find a stable job with health benefits because in this economy, less and less employers are offering benefits to young people.”
The importance of health reform allowing young adults to obtain coverage on their parent’s health insurance plan is reiterated by another individual:
• “ I can personally speak for the kids 26 and under part of this. I have two kids under 26. One does not live at home. He is 22 and working at a job without health insurance. He would have no health insurance without being able to stay on my insurance. He was able to have an expensive blood test to find out if he has a potentially life threatening blood disorder because he had my health insurance to cover it.”
3. Four of the Center for Medicare Advocacy’s own employees have young adult children who have lost their jobs or are employed, but their employers do not provide health insurance. Again, these young people only have health insurance as a result of health care reform which allows them to be covered by the Center’s health insurance. At least one of these young adults has an on-going mix of mental health and medical problems that require on-going health care.
Health care reform is helping families struggling to deal with illnesses, age, unemployment, and underemployment. The law advances family values.
CMA Health Policy Blog 