Posts filed under ‘Medicare Reform’
A Modest Medicare Proposal (As Suggested by a Reader)
Instead of raising the age of eligibility for Medicare, why don’t we just use Part D as a model and create a new Eligibility Donut Hole?
People ages 65 – 69 can keep their eligibility. But, between ages 70 and 85: Into the new Donut Hole. Eligibility for Medicare would end during this time – after all it’s these older people that start getting sick, so it’s the perfect time to stop paying for their health care. The new Donut Hole would save the government a ton of money!
Those who do make it through the Eligibility Donut Hole without Medicare, would once again become eligible at age 86. At that point most people only need “comfort measures” and their conditions usually won’t improve, so Medicare wouldn’t pay for their care anyway!
If the goal is to save money, a new Medicare Eligibiity Donut Hole is the way to go.
Class Warfare? Discuss.
To reduce the deficit, the President suggests we increase taxes for the 430,000 Americans who have incomes above $1 million. The Republican leadership (Boehner, Ryan, McConnell and Graham) say that’s class warfare. They say it’s unfair to balance the budget at the expense of these few rich people (0.3% of the population). Instead, they say, we should look to reduce spending – only. In particular, we should cut Medicaid and Medicare.
47 million older and disabled Americans are enrolled in Medicare. 58 million poor children, pregnant women, older and disabled people are enrolled in Medicaid.
Query: Why is it class warfare to tax a little more the few of us who are lucky enough to be millionaires, but it’s not class warfare to cut health care coverage for the vast number of us who are enrolled in Medicare and Medicaid? Discuss.
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.
Some Reasonable Ways to Save Medicare Dollars
With lots of attention on the upcoming debt-reduction “Super Committee,” many ideas about saving federal dollars are in the air, not the least of which include restructuring Medicare. Some of these ideas are sound, others are not. For a discussion of some reasonable ideas about Medicare that will not simply shift more costs to beneficiaries, see this New York Times Op-Ed piece written by Dr. Ezekiel J. Emanuel and Professor Jeffrey B. Liebman. http://www.nytimes.com/2011/08/23/opinion/cut-medicare-help-patients.html?emc=tnt&tntemail1=y
While we disagree that “cutting Medicare” is a foregone conclusion, this article argues for eliminating Medicare coverage for tests, treatments and procedures that don’t work, and states that the Affordable Care Act should be left alone to do its job of producing higher quality, more efficient care. Across the board cuts aren’t smart, and cost-shifting to beneficiaries – including raising the age of Medicare eligibility – is not the right approach. We agree with these points. (IF the necessity for a given procedure and eligibility for coverage is decided based on each individual’s actual circumstances.)
For additional ideas of how to achieve savings in the Medicare program without gouging beneficiaries or backtracking on its promise, see the Center for Medicare Advocacy’s suggested Six Solutions. http://www.medicareadvocacy.org/2011/06/so-what-would-you-do-real-solutions-for-medicare-solvency-and-reducing-the-deficit/
Medicare Facts & Fiction: 3 Quick Lessons to Combat Medicare Spin
Congress continues to propose Medicare changes that will have severe repercussions for beneficiaries and their families. Policymakers and pundits are feeding the media and the public misinformation about Medicare. The truth is, most people with Medicare are low-income and most pay more for health care than other insured Americans. Nonetheless, Medicare Works. For 46 years it has opened doors to necessary care for millions of older people, people with disabilities, and their families.
Did you know?
- The average income of Medicare beneficiaries is less than $22,000 per year.
- Medicare beneficiaries already pay more out-of-pocket for health care than people with other health insurance.
- Higher income people with Medicare already pay higher premiums for Medicare than other Medicare beneficiaries.
What’s Fair? Should we tax Millionaires or grandparents? Millionaires.
It’s Mediare’s Anniversary: Make Sure it Has Many More
The Center for Medicare Advocacy has represented older and disabled Medicare beneficiaries for over 25 years. We have seen the value of this time-honored program to our clients and their families. We have seen people with Medicare live better, more secure, longer lives. The 46th anniversary of Medicare, one of our country’s great successes, should not be tarnished by gutting the program for the next generation or changing its core structure, that holds the same promise for all of us, regardless of income. The universality of Medicare’s guaranteed benefits has been its hallmark and saving grace. Celebrate Medicare by preserving these time-tested values.
Hello Leaders: Are You Listening?
Sen. Lieberman: Wrong Way on Medicare
We’re sorry – Connecticut’s Senior Senator has once again entered the Medicare “reform” debate with the wrong perspective. Instead of looking to insure more people while lowering costs, Senator Lieberman, and his colleague Sen. Coburn, unveiled a plan on June 28th that is misdirected – reducing the number of people covered by Medicare, and foregoing major opportunities to bring down costs.
The Lieberman-Coburn proposal would raise the age of eligibility for Medicare, raise the cost of Medicare for beneficiaries, limit the ability to purchase supplemental insurance to fill Medicare’s gaps, and continue billions of dollars of wasteful overpayments to pharmaceutical companies and private Medicare plans.
Listen carefully folks, this is not the right direction for Medicare!
Read more of Judith Stein’s comments on the plan nobody is going to like in the CT Mirror at http://www.ctmirror.org/story/13101/liebermancoburn
Lower Medicare Age
Lawmakers continue to talk about the future of Medicare as they address the federal deficit, and many of the proposals that have emerged would have horrible repercussions for Medicare beneficiaries and their families. Just last week, Connecticut’s Senator Joe Lieberman suggested raising the eligibility age for Medicare; an unsound idea that would hurt the actuarial balance of the Medicare risk pool. Raising the eligibility age would increase the proportion of older, sicker people in Medicare, while younger, healthier people – and their largely unused premiums – would be excluded. That’s the exact wrong direction, and we at the Center had to respond.
Follow the links below to see our letters in the New York Times and the Washington Post.
http://www.nytimes.com/2011/06/16/opinion/l16krugman.html?_r=2&partner=rssnyt&emc=rss
So – What Would You Do? Real 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 from Congress that would have severe repercussions for beneficiaries and their families.[1] Sound and measured 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 current proposals, do not shift costs to beneficiaries or completely restructure theMedicare program. They promote choice and competition while shoring up the solvency ofMedicare. 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 44 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 reducingMedicare 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 forMedicare Advantage plans, some plans will continue to be paid as much as 115% of the average traditionalMedicare payment rate for their county when the new rates are fully implemented. MedPAC estimates that by 2017Medicare Advantage payment benchmarks will average 101% of traditionalMedicare. 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 traditionalMedicare. Reducing private MA payments to 100% of traditionalMedicare, as MedPAC proposed before the enactment of ACA, will increase the solvency of theMedicare program and curb costs for taxpayers. Private plans simply should not receive higher pay than traditionalMedicare.
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 Dual Eligibles
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 dual eligibles would save at least $30 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 allow this healthier population to enroll in the Medicare program would add revenue for 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 the creation of a voucher program or through measures that would be required by spending caps – is a perversion of Medicare’s original purpose, which was to protect older people and their families from illness and financial ruin due to health care costs. The solutions proposed by the Center forMedicare Advocacy promote financial solvency without doing it at the expense of beneficiaries.
[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]Congressional Budget Office, 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.
CMA Health Policy Blog 