Posts filed under ‘Medicare’
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.
Federal Judge Refuses To Dismiss Medicare Beneficiaries’ Challenge To The Medicare “Improvement Standard”
Plaintiffs have overcome a major hurdle in a lawsuit filed by the Center for Medicare Advocacy and Vermont Legal Aid on behalf of Medicare beneficiaries with long-term and chronic conditions. In a comprehensive 35-page decision, Chief Judge Christina Reiss refused the federal government’s request to throw out a lawsuit that seeks to end use of an illegal Improvement Standard to deny Medicare coverage. The Improvement Standard is a “rule of thumb” that Medicare uses to deny or terminate coverage to beneficiaries whose conditions are not improving. Jimmo v. Sebelius, Civil No. 5:11-CV-17 (D. VT. 10/25/20011).
“The Improvement Standard is the most unfair and harmful reason for Medicare denials,” stated Judith Stein, executive director of the Center for Medicare Advocacy. “It has a particularly devastating effect on patients with chronic conditions such as Multiple Sclerosis, Alzheimer’s disease, ALS, Parkinson’s disease, and paralysis.”
The lawsuit, which was filed in January of this year, was brought on behalf of a nationwide class of Medicare beneficiaries by six individual beneficiaries and seven national organizations representing people with chronic conditions.
In asking the court to dismiss the case, the government raised several arguments to contend that the court lacked jurisdiction over the plaintiffs’ claims. The government also argued that the plaintiffs failed to state a claim, namely, that there was no proof that the government was even applying such a policy as the Improvement Standard. Judge Reiss rejected that contention. She did agree, however, that the court lacked jurisdiction over one beneficiary plaintiff and one organizational plaintiff, but the case will go forward with the remaining eleven plaintiffs.
“Judge Reiss understands the core issue plaintiffs in this case seek to address,” stated Michael Benvenuto, attorney for plaintiffs from Vermont Legal Aid. “They are not seeking individual claim reviews; they are challenging a broad secret policy.”
“This is a great first step for these plaintiffs and for Medicare beneficiaries in general,” remarked Gill Deford, the lead attorney for the plaintiffs. “The Improvement Standard has been used for over 30 years to deprive hundreds of thousands of Medicare beneficiaries of coverage they desperately needed. This decision starts the process of ending that illegal policy.”
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.
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.
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.
CMA Health Policy Blog 