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As if Medicare and your health depend upon it.
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HEALTH CARE REFORM DOES NOT CUT MEDICARE BENEFITS
Health care reform does not cut Medicare benefits. In fact, health care reform expands Medicare coverage, by eliminating cost-sharing for preventive services, adding a yearly wellness visit, limiting some cost-sharing in private Medicare plans, and closing the Part D “Donut Hole.” It also improves the solvency of the Medicare program itself.
Health care reform changes some wasteful Medicare payment policies. Some misstated reports of these changes have resulted in exaggerating public fear of cuts to Medicare benefits.
The Affordable Care Act, aka health care reform, achieves savings in the Medicare program through a series of payment reforms, service delivery innovations, and increased efforts to reduce fraud, waste, and abuse. The actual projected reduction in Medicare spending is $428 billion over 10 years, after $105 billion in new Medicare spending is taken into consideration. These projections actually extend the life of the Medicare trust fund by about a decade. None of the payment reforms affect Medicare’s guaranteed benefit packages. Indeed, the law specifically states that the guaranteed benefits in Medicare Part A and Part B will not be reduced or eliminated as a result of changes to the Medicare program.
Health Care Reform Rolls Back The Privatization of Medicare.
Most of the new law’s Medicare “cuts” are actually reductions in subsidies to private Medicare plans, which were begun in 2003 during the Bush Administration. These overpayments to private insurance companies, (known as “Medicare Advnatage” plans) will account for about $130 billion in Medicare savings over 10 years. Medicare Advantage plans are offered by private insurance companies that contract with the government to provide Medicare for people who choose to enroll in a private plan. By law these plans must provide all of the guaranteed benefits under Part A and Part B.
Under the funding mechanism in effect before enactment of the Affordable Care Act, Medicare Advantage plans were paid, on average, about 13% more than the traditional Medicare program to provide the same coverage. These extra payments resulted in Medicare Part B premiums being $3.35 higher per month for all beneficiaries in 2009, and resulted in the federal government (and taxpayers) spending $14 billion more than would have been necessary, if Medicare Advantage enrollees had remained in the traditional Medicare program.
The Affordable Care Act will end these wasteful overpayments by phasing in reductions in Medicare Advantage payments, starting with a payment freeze in 2011. Medicare Advantage payments will be based on national county benchmarks, with plans being paid a fixed percentage of traditional Medicare costs. As a result of this payment formula, plans in some lower-paid counties, generally rural and suburban areas, will continue to receive payments that exceed the traditional Medicare amount, while plans in higher paid counties, many of them large cities, may see substantial reductions. Rebates (an amount plans receive if they bid less than the county benchmark) will also be reduced. The new payment structure also provides for an increase in payments by up to 5% for plans that receive four or more stars for high quality on the CMS star rating system.
Health care reform cuts wasteful payments put in place to encourage private Medicare. Health care reform increases benefits for all people with Medicare, decreases Medicare costs for beneficiaries and taxpayers, and extends the life of the Medicare program.
Health care reform is good for Medicare. Pass it on!
The New York Times Features CMA’s Judith Stein in Its Coverage of Looming Medicare Enrollment Period
Judith Stein, right, executive director of the Center for Medicare Advocacy, with Jocelyne Watrous, a beneficiary consultant. Many private insurers this year are consolidating their Medicare offerings and discontinuing some plans.
From The New York Times:
Medicare enrollment season is approaching, and many experts say they believe it promises to be a turbulent one — “a perfect storm,” said Paul Gada of Allsup, a provider of Medicare plan selection services.
Why? In some areas, there will be dozens, even hundreds, of coverage options. The choices must be reviewed not just by current enrollees and a crush of baby boomers newly eligible for the government-run insurance program, but also by millions of people helping older beneficiaries.
All of them must navigate a system that is changing rapidly, in part because of requirements imposed by the new health care law. “It’s a complicated year for Medicare beneficiaries,” said Judith Stein, executive director of the Center for Medicare Advocacy, a nonprofit group that helps Medicare beneficiaries.
To help simplify the process, you’ll first need a quick rundown of exactly what Medicare entails.
Read the full article, here.
Health Care Reform: Standing Up To Insurance Companies and Standing Up For People
OPINION – Wall Street Journal, SEPTEMBER 28, 2010
Health Insurers Finally Get Some Oversight
By KATHLEEN SEBELIUS, Secretary of Health and Human Services
In the last two weeks, my department has been accused of “thuggery” (this editorial page) and “Soviet tyranny” (Newt Gingrich). What prompted these accusations? The fact that we told health-insurance companies that, as required by law, we will review large premium increases and identify those that are unreasonable.
There’s a long history of special interests using similar attacks to oppose change. In the mid-1960s, for example, some claimed Medicare would put our country on the path to socialism.
But what is really objectionable about these comments is not who they’re attacking, but what they’re defending. These critics seem to believe that any oversight of the insurance industry is too much, and that consumers would be better off in a system where they have few rights or protections.
Over the past decade, Americans have seen what happens when insurance companies have free rein. The cost of health insurance has more than doubled, while millions of hard-working Americans lost their coverage or drained their savings to keep up with premiums. Employers, big and small, have struggled mightily to absorb these cost increases and have been losing the fight.
As insurance commissioner and governor of Kansas, I saw firsthand how these rate hikes burdened people. I spoke with families who watched their insurance go up 20%, 30%, even 40% a year without explanation. I met with small business owners who had stopped offering health insurance to their employees because they couldn’t afford the annual double-digit premium increases.
A woman who wrote to me recently summed up the frustration that many feel. “As a self-employed, hard-working person,” she wrote, “I have no good options for health coverage.”
Yet even as our insurance markets have failed Americans time and time again, special interests successfully blocked reform. That’s changing with enactment of the new health insurance law. Under the Affordable Care Act, 46 states have already received grants to beef up their premium-review and oversight capabilities. And additional funding is on the way.
The law also gives clear instructions to the new state-based health insurance marketplaces called exchanges that will be created in 2014. As the exchanges decide what plans to include, they must incorporate recommendations from states about whether particular health insurance issuers should be excluded based on a pattern of excessive or unjustified premium increases.
We are already seeing this new level of accountability pay off. Last week, North Carolina’s largest insurer announced a “one-time refund that will return $155.8 million to more than 215,000 individual Blue Cross Blue Shield customers as a result of the Affordable Care Act.” This rebate will put an average of $720 back into the pockets of each of those policyholders. In addition, thanks to diligent work by North Carolina’s insurance commissioner, they’ll see their premiums rise by less than 6% in 2011, thesmallest rate increase in four years.
A day after Blue Cross Blue Shield’s announcement, seniors with private Medicare plans got some news that most Americans haven’t heard in years: Their premiums will actually go down 1% next year, even as many of them enjoy better benefits.
The Affordable Care Act is bringing some basic fairness to our health insurance market. So when I learned that a handful of insurers around the country are blaming their significant rate increases on the new law, even though the facts show that the impact of the law on premiums is small, just 1% to 2% declining over time‹I let them know that we’d be closely reviewing their rate hikes.
It’s understandable that some insurance companies and their allies don’t welcome this change. They’ve made large profits from the status quo. And it’s not surprising, though still disappointing, that House Republicans have recently pledged to repeal the Affordable Care Act and get rid of these new consumer protections.
If critics really want to go back to the days when insurance companies ran wild with no accountability, they should have the courage to say so openly instead of hiding behind distracting attacks. In the meantime, we’re going to keep standing up for American families and small business owners who deserve a system that works for them.
Ms. Sebelius is the U.S. secretary of Health and Human Services. http://online.wsj.com/article/SB10001424052748704082104575515851336184716.ht
Health Reform Hits Main Street
Confused about how the new health reform law really works? This short, animated movie, written and produced by the Kaiser Family Foundation and narrated by Cokie Roberts, explains the problems with the current health care system, the changes that are happening now, and the big changes coming in 2014.
Medicare Trustees Attribute Increased Medicare Solvency to Health Reform
The Medicare Trustees issued their annual report today on the program’s financial status. Good news! As a result of health care reform, the Medicare Trust Fund is now expected to remain solvent until 2029 – twelve years longer than the Trustees projected last year. As the Trustees state in their Report, “Nearly all of this improvement … is due to ACA [Affordable Care Act].” While challenges lie ahead, if health reform is fully implemented Medicare has a rosier future and people can count on Medicare being there for them as they age.
Medicare and Medicare beneficiaries, current and future, will benefit from health reform. Now, let’s help get it implemented!
For the full report go to: http://www.kaiserhealthnews.org/Stories/2010/August/05/medicare-trustees-report.aspx
You’re not in the hospital. You’re in observation!
When Mrs. Lee Barrows was told that her husband Larry, whom she’d been visiting in the hospital for a week was not an in-patient, she asked, then “Who the hell have I been visiting?” This scene in Connecticut is being repeated daily in acute care hospitals all over the country. Medicare beneficiaries – although placed in hospital beds (often, from the emergency room) and given medications, tests, therapies, medical and nursing services, food, and a wrist-band – are told they aren’t in-patients; they’re just receiving observation services as outpatients. Patients often learn about their out-patient status just as they are leaving the hospital for the skilled nursing facility – which won’t be covered by the Medicare program because they weren’t in-patients for three consecutive days!
The Center for Medicare Advocacy has been hearing this story with increasing frequency over the last year. We’ve been writing about it (see our 5/24 post), and now, the media is reporting on it.
Bloomberg News published an article by Drew Armstrong on its website and in Business Week – “Medicare Fraud Effort Gives Elderly Surprise Hospital Bills” (July 12, 2010), http://www.bloomberg.com/news/print/2010-07-12/hospital-fraud-audits-spur-unintended-cash-penalty-to-elderly-on-medicare.html
The Philadelphia Inquirer also addressed this pressing issue in its article “High cost, rigorous rules can trap Medicare patients” (July 4, 2010), http://www.philly.com/inquirer/health_science/daily/20100704_High_cost__rigorous_rules_can_trap_Medicare_patients.html
The Center has lots of information on this issue. Please go to http://www.medicareadvocacy.org/InfoByTopic/ObservationStatus/ObservationMain.htm
And let us hear from you, too! What is happening to you and your friends and relatives in the hospital?
Health Care Reform and Freedom From Fear
By Cong. Joe Courtney (2d District, Connectciut)
No Longer Shut Out of Coverage (Roll Call Op Ed, June 21st, 2010)
I met Gloria Bitner of Marlborough, Conn., at a town hall last year. Now 63 years old, she suffered a heart attack at age 54 and fortunately was covered under her husband’s health plan at the time.
In 2008, however, he was laid off from his job at a car dealership, and their COBRA was close to the end. When I met her, Bitner described in excruciating detail how her heart attack made her family uninsurable on the individual market. After being rejected by a number of insurance providers because of her pre-existing health condition, she turned to Connecticut’s high-risk
pool program. For a basic policy for her and her husband, she was quoted an annual premium in excess of $30,000, which would have obliterated the couple’s middle-class budget.
As the Bitners quickly discovered, in the individual insurance market — where most unemployed and self-employed people and small businesses go for insurance — a heart attack is a common reason for insurance denial.
Another common reason for denial is diabetes. Since their son was diagnosed with Type 1 diabetes, the Crowley family of North Stonington, Conn., has lived in fear of the unforeseen. Although the son is covered through his parent’s employer health plan, the Crowleys worry that if they lose their coverage because of a layoff or job change, his chronic condition will trigger waiting periods or outright exclusion from a new plan. Long term, they worry that he won’t be able to obtain coverage on his own after he ages out of their coverage unless he is lucky enough to find employment with a large firm. Without coverage, they fear he won’t have access to the daily insulin shots and costly glucose monitoring systems he needs to stay alive.
The Crowleys were worried because without a larger employer-sponsored plan, securing insurance coverage on the individual market is almost impossible and prohibitively expensive.
These families are not alone. According to a report released by Families USA, more than 57 million Americans younger than 65 have a pre-existing health condition that leaves them susceptible to insurance denials. For those directly affected by pre-existing condition exclusions, there are clear health and financial consequences. And for families like the Crowleys who are lucky enough to still have coverage, the fear of losing or changing plans takes a toll as well.
An insurance system that excludes people from coverage based on pre-existing conditions functions on the “actuarial rules of risk avoidance.” These rules have an internal logic, but they fail on a societal level by creating a health care system with haves and have-nots. To put it bluntly, it is medical apartheid.
The fact that Type 1 diabetes, a heart attack, high blood pressure, cancer or any other ailment caused by internal biology is used to discriminate in the insurance marketplace is fundamentally unfair.
Now consider a system in which the Crowleys wouldn’t have to think about their son’s employment prospects as a life-or-death situation. Consider a system that ensures access to affordable, meaningful coverage to millions who are susceptible to pre-existing health condition exclusions. Following passage of health care reform legislation, that is the new reality. Jim Crow laws were declared illegal and inherently unfair a generation ago, and denying insurance coverage based on an individual’s internal biology will follow them into oblivion.
Since being elected to Congress nearly four years ago, I have worked to achieve these protections for the Crowley family and for the 57 million Americans who face the crippling effects of pre-existing condition exclusions. In the 110th Congress, I introduced legislation to reduce the practice of denying coverage based on pre-existing health conditions. Then in the 111th Congress, I introduced a bill to eliminate the practice altogether. These protections were included in both the House and Senate health care reform bills and are now the law of the land.
While the new health care reform law will solidify critical insurance reforms to limit and eventually abolish pre-existing condition exclusions, it is not a silver bullet. Protections will be phased in over time. Beginning this year, a new temporary high-risk pool program with subsidized premiums will provide insurance options for those who have been denied coverage based on a pre-existing health condition. Also beginning this year, the legislation will prohibit insurance providers from denying children coverage based on pre-existing health conditions. By 2014, the health care reform package will end pre-existing condition exclusions for everyone.
Over time, these insurance protections will offer sustainable, long-term relief for families like the Crowleys and Bitners. They will eliminate unfair practices and ensure that no one is discriminated against based on his or her internal biology. These protections will put to rest the fear of the unknown. Employment decisions shouldn’t be about life or death, and no family should exhaust its savings paying for insurance. What for so long was a pipe dream is now a reality. It’s the realization of one of President Franklin Roosevelt’s four freedoms, the freedom from fear.
CMA Health Policy Blog 