Archive | Medicare

ADVOCATES FOR SENIORS AND HEALTHCARE INDUSTRY FEAR BIG CUTS COULD FLOW FROM DEBT DEAL

Associated Press –

Aug. 2: Washington – When it comes to Medicare and Medicaid, the debt deal raises more questions than it answers. The giant health care programs serving some 100 million elderly, low-income and disabled Americans were spared from the first round of cuts in the agreement between President Barack Obama and congressional leaders. But everything’s on the chopping block for a powerful new congressional committee that will be created under the deal to scour the budget for savings.

And if that hunt leads to a dead end, the agreement decrees an automatic 2 percent cut to Medicare providers such as hospitals. That’s on top of a 6 percent cut already enacted to finance Obama’s health care law, which is just being phased in.

The hospital industry, which agreed to cuts of $150 billion to help pay for Obama’s expansion of coverage to the uninsured, said Monday it’s just about had it.

The debt deal would allow the government to keep borrowing and stave off an unprecedented default on obligations to investors, Social Security recipients, federal employees and others. But it comes at the price of squeezing the budget in ways that average Americans may not yet realize.

The first $900 billion in savings from the complex deal are not likely to have much impact on health care. It’s the second round that counts, from $1.2 trillion to $1.5 trillion over 10 years.

“These guys haven’t really solved anything they have only set up a procedure to make cuts,” said Robert Laszewski, a health care industry consultant. “We haven’t seen the blood on the floor yet.”

The White House is emphasizing that Medicaid for the poor and benefits guaranteed to seniors under traditional Medicare would not be touched if automatic reductions become necessary as a backstop.

But the new congressional “supercommittee” created under the deal is under no such restrictions. It can shape its own menu of cuts to Medicare, Medicaid and Obama’s health care law, assuming the panel could get the votes to pass a package through Congress and buy-in from the White House.

For Medicaid, that means a new funding formula, proposed by the Obama administration and opposed by many governors, remains on the table. It would be used to dial down the amount of federal money states get for the health needs of their low-income people and long-term care patients in nursing homes.

For Medicare, it means the committee could push increases in copays and deductibles, as have two bipartisan commissions within the last nine months.
Medicare providers are nervous.

Doctors could be particularly exposed. Current law calls for an automatic cut of 30 percent in Medicare payments to doctors starting next year, the result of a previous budget control law gone awry. It’s unthinkable that lawmakers would allow that to go through. But where Congress in previous years just waived the cut and added the cost to the deficit, that’s not politically possible any more.

Drug companies are also hunkered down. Having agreed to help close the Medicare prescription coverage gap, as well as billions in new fees under the health care overhaul, they could now be on the hook for additional rebates to cover the drug costs of low-income seniors.

The budget supercommittee has a deadline for action around Thanksgiving. That has advocates mobilizing to stave off or contain the scope of cuts. One way to do that is to put tax increases back on the table.

“All of our work lies ahead of us,” said Ron Pollack, executive director of Families USA, an advocacy group that battled for the health care overhaul. “We are not planning the next stage, because the process continues.”

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SENIORS MAY SEE CHANGES IN MEDIGAP POLICIES

Kaiser Daily Health News –

July 15: As debt limit talks drag on, lawmakers are eying possible changes in Medicare supplemental plans moves that could increase seniors’ out-of-pocket costs.

Traditional Medicare, the federal health program for the elderly and disabled, requires beneficiaries to pay hospital deductibles and a portion of the cost of tests and doctor visits. To protect themselves from those out-of-pocket costs, about 17 percent of beneficiaries buy Medigap plans. Another 34 percent get such coverage through a former employer.

But some health policy experts say such “first-dollar protection” drives up demand for Medicare services, costing the government money for what may be unnecessary care. One proposal would bar supplemental insurance from completely eliminating out-of-pocket costs – or charge enrollees a $530 a year extra if they want to keep such protection. That change could save up to $53 billion over 10 years, according to a chart used during the bipartisan talks led by Vice President Joe Biden.

What is Medigap and why do people buy it?

Unlike most job-based health insurance, traditional Medicare does not include “catastrophic” coverage, an annual maximum upper limit on the amount beneficiaries could pay. So enrollees can be liable for thousands of dollars each year, including: $1,132 per-episode deductible for hospital admissions; hundreds of dollars in daily charges for hospital stays of longer than 60 days; a $162-a-year deductible for doctor care, plus 20 percent of charges for office visits or equipment like wheelchairs.

Ten standardized types of supplemental plans offered by private insurers including AARP’s UnitedHealthcare policies cover all or most of such deductibles and copayments. Some employers also pay all or part of such costs for their retirees.

What changes are under consideration?

It is not clear exactly what’s on the table in the negotiations between congressional leaders and the White House. But the charts released show that one such proposal under consideration would bar insurers from offering supplemental policies unless the policies came with an annual deductible.

People who didn’t want a deductible could pay $530 a year in additional premium to ensure that they won’t be hit with costs before their coverage kicks in.

Is this a new idea?

No. It is a subset of a larger discussion about spending on Medicare and other entitlements. In recent years, the National Commission on Fiscal Responsibility and Reform (The Bowles-Simpson Commission), the Debt Reduction Task Force, the Medicare Payment Advisory Commission and lawmakers, including Sen. Joe Lieberman, a Connecticut independent, and Sen. Tom Coburn, an Oklahoma Republican, have all suggested changing traditional Medicare.

Most of the ideas would create a single annual deductible – generally around $550 – after which beneficiaries would pay about 20 percent of medical costs up to a maximum annual cap, ranging from around $5,000 to more than $7,500.

Would changing supplemental coverage save money?

Some economists and policy experts say that supplemental coverage insulates beneficiaries from medical costs, driving up demand for unnecessary care. A study done for MedPAC in 2009 found that beneficiaries with supplemental insurance used more care and cost the program more money. The increased spending wasn’t for emergency hospitalizations, but for other services such as elective hospital admissions, preventive care, doctor office visits and some types of tests.

Supporters of the insurance say it shields seniors from unpredictable costs and reduces big-ticket expenses by encouraging them to seek help for medical problems before they become severe.

What else do people say about the idea?

Advocacy groups like the Medicare Rights Center oppose restricting Medigap plans, saying it would simply shift more costs from the government to elderly and low-income people who can least afford it. “Some in government feel people in Medicare don’t have enough ‘skin in the game,’” says Ilene Stein, federal policy director for the center. In fact, she says, people on Medicare already pay 15 percent of their incomes for health care, well above the level paid by non-Medicare households. While the proposals would cap maximum annual spending per enrollee to $5,500 or $7,500, “that’s a lot of money for someone making $22,000,” the median household income for those on Medicare, she says.

Still, Joe Antos of the conservative American Enterprise Institute says many of those people already pay large premiums for Medigap coverage – and would likely see those premiums decline if “first-dollar” protections are barred.

Antos and Jonathan Gruber, an economist at MIT and consultant to Democrats, both think that if Congress were to change supplemental coverage or the traditional program itself that lawmakers would create exemptions for lower-income beneficiaries.

How would the proposal affect a Medigap policy I already own?
Congress would have to decide whether to impose restrictions only on new policies or include existing coverage.

What about people who don’t have a Medigap plan?

Only about 10 percent of seniors don’t have some sort of supplemental coverage. Some people have military/VA benefits, others are in Medicaid, and some have coverage through Medicare Advantage plans, which are insurance policies offered by private insurers as an alternative to traditional Medicare.

What are the chances that these ideas will be adopted by lawmakers?

Because making any change that could be seen as a cut in Medicare benefits carries huge political risk, previous calls for changing the traditional Medicare program or limiting first-dollar coverage through supplemental insurance have not picked up support. But now, when failure to lift the debt ceiling could result in widespread economic problems, a middle-of-the night compromise between warring factions in Congress could put it back on the table.

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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HIGH-END MEDICAL OPTION PROMPTS MEDICARE WORRIES

Associated Press –

Apr. 3: Every year, thousands of people make a deal with their doctor: I’ll pay you a fixed annual fee, whether or not I need your services, and in return you’ll see me the day I call, remember who I am and what ails me, and give me your undivided attention.

But this arrangement potentially poses a big threat to Medicare and to the new world of medical care envisioned under President Barack Obama’s health overhaul.

The spread of “concierge medicine,” where doctors limit their practice to patients who pay a fee of about $1,500 a year, could drive a wedge among the insured. Eventually, people unable to afford the retainer might find themselves stuck on a lower tier, facing less time with doctors and longer waits.

Medicare recipients, who account for a big share of patients in doctors’ offices, are the most vulnerable. The program’s financial troubles are causing doctors to reassess their participation. But the impact could be broader because primary care doctors are in short supply and the health law will bring in more than 30 million newly insured patients.

If concierge medicine goes beyond just a thriving niche, it could lead to a kind of insurance caste system. “What we are looking at is the prospect of a more explicitly tiered system where people with money have a different kind of insurance relationship than most of the middle class, and where Medicare is no longer as universal as we would like it to be,” said John Rother, policy director for AARP.

Concierge doctors say they’re not out to exclude anyone, but are trying to recapture the personal connection shredded by modern medicine. Instead of juggling 2,000 or more patients, they can concentrate on a few hundred, stressing prevention and acting as advocates with specialists and hospitals.

“I don’t have to be looking at patient mix and how many are booked per hour,” said Dr. Lewis Weiner, a primary care physician in Providence, R.I., who’s been in a concierge practice since 2005.

“I get to know the individual,” Weiner said. “I see their color. I see their moods. I pick up changes in their lives, new stressors that I would not have found as easily before. It’s been a very positive shift.”

Making the switch can also be economically rewarding. If 500 patients pay $1,500 apiece, that’s gross revenue of $750,000 for the practice. Many concierge doctors also bill Medicare and private insurance for services not covered by their retainer.

For now, there may be fewer than 2,000 doctors in all types of retainer practice nationally. Most are primary care physicians, a sliver of the estimated 300,000 generalists.

The trend caught the eye of MedPAC, a commission created by Congress that advises lawmakers on Medicare and watches for problems with access. It hired consultants to investigate.

Their report, delivered last fall, found listings for 756 concierge doctors nationally, a five-fold increase from the number identified in a 2005 survey by the Government Accountability Office.

The transcript of a meeting last September at which the report was discussed reveals concerns among commission members that Medicare beneficiaries could face sharply reduced access if the trend accelerates.

“My worst fear and I don’t know how realistic it is is that this is a harbinger of our approaching a tipping point,” said MedPAC chairman Glenn Hackbarth, noting that “there’s too much money” for doctors to pass up.

Hackbarth continued: “The nightmare I have and, again, I don’t know how realistic it is that a couple of these things come together, and you could have a quite dramatic erosion in access in a very short time.”

Another commissioner at the meeting, Robert Berenson, called concierge medicine a “canary in the coal mine.” Several members said it appears to be fulfilling a central goal of Obama’s overhaul, enhancing the role of primary care and restoring the doctor-patient relationship.

Yet the approach envisioned under the law is different from the one-on-one attention in concierge medicine. It calls for a team strategy where the doctor is helped by nurses and physician assistants, who handle much of the contact with patients.

John Goodman, a conservative health policy expert, predicts the health care law will drive more patients to try concierge medicine. “Seniors who can pay for it will go outside the system,” he said.

MedPAC’s Hackbarth declined to be interviewed. But Berenson, a physician and policy expert, said “the fact that excellent doctors are doing this suggests we’ve got a problem.”

“The lesson is, if we don’t attend to what is now a relatively small phenomenon, it’s going to blow up,” he added. When a primary care doctor switches to concierge practice, it means several hundred Medicare beneficiaries must find another provider.

Medicare declined an interview on potential consequences. “There are no policy changes in the works at this time,” said spokeswoman Ellen Griffith.

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Death Panels And Job Losses

CBO Director Elmendorf and former Speaker Pelosi seem to be about 4.8 million jobs apart. AP

Reform: As the head of Medicaid and Medicare services testifies in favor of ObamaCare, the CBO director says it will destroy 800,000 jobs. Talk about killing two birds with one stone.

Former House Speaker Nancy Pelosi once famously said that we’d have to pass ObamaCare to see what was in it. She also boasted that the health care bill would create 4 million jobs — “400,000 of them almost immediately.”

Now that we’ve seen what’s in it, we realize the possible consequences for our physical and economic health. And congressional testimony before GOP-led committees has given us fresh reasons for repeal.

Contradicting Mrs. Pelosi, CBO director Douglas Elmendorf told the House Budget Committee on Thursday that one of the unintended consequences of ObamaCare would be a reduction in employment by half a percent by 2021.

In an exchange with Rep. John Campbell, R-Calif., Elmendorf confirmed the analysis contained in a CBO report issued last August. “That net effect reflects changes in incentives in the labor market that operate in both directions,” he said.

“The way I would put it,” Elmendorf said, “is that we do estimate … that employment will be about 160 million by the end of the decade. Half a percent of that is 800,000.” That number is 50% more than all the people who work for GM, Ford, and Chrysler combined.

ObamaCare mandates and costs will reduce hiring while some workers will have less incentive to enter the work force. In fact, Elmendorf’s number may be quite low, considering it’s been estimated that ObamaCare will impose $500 billion in new taxes and will actually cost more than $2.3 trillion in 10 years.

“Since day one,” said John Murray, deputy chief of staff for Majority Leader Eric Cantor, “Republicans have opposed ObamaCare for a simple reason: It would destroy jobs. (House) Minority Leader Pelosi, (Senate Majority) Leader Reid and others said we were wrong. Guess not.”

Meanwhile Dr. Donald Berwick, President Obama’s choice to head the Centers for Medicare and Medicaid Services, was testifying before the House Ways and Means Committee on ObamaCare’s implications for those two programs and the seniors they serve. He also testified on his past admiration for the rationing and cost-effectiveness standards applied at Britain’s National Health Service (NHS).

In questioning Berwick, committee chairman Dave Camp, R-Mich., noted that “Medicare actuaries predict that because of the cuts in the Democrats’ health care law, 725 hospitals, 2,352 nursing homes and 1,587 home-health agencies will become unprofitable.” Rep. Sam Johnson, R-Texas, said 300 doctors in his state have already dropped Medicare.

GOP members expressed concern about what would happen after the $575 billion in Medicare cuts that ObamaCare requires were made. Testifying later, Richard Foster, nonpartisan chief actuary of Medicare, said he worried that cuts in Medicare would eventually hurt seniors as they are joined by 80 million baby boomers.

To these questions and others Berwick whistled past the actuarial graveyard, talking only about how he was “really excited about the promise the affordable care act offers.” That promise is rapidly degenerating into self-fulfilling prophecies of doom.

Camp asked Berwick point-blank about the statement he once made about Britain’s system: “I fell in love with the NHS … to an American observer, the NHS is such a seductress.” “Are you still in love with the NHS?” Camp asked. “There are strengths and weaknesses for every health care system around the world,” Berwick responded lamely.

We’ve documented how socialized medicine around the world makes decisions based on cost-effectiveness rather than medical need and has led to rationing and even denial of service, with people literally dying on waiting lists. The death panels are real, and they are coming here to place our lives and livelihoods in grave danger.

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Stealth-Taxing Non-Wealthy Medicare Beneficiaries

Christopher Conover, PhD

Remember how candidate Barack Obama made a “firm pledge” to Americans in families under $250,000 income that “you will not see any of your taxes increase one single dime?” This pledge was repeated again, again, and again. Tell that to elderly and disabled Medicare beneficiaries with incomes well below that amount who will be paying a total of $36 billion more into Medicare thanks to the new health law.

Starting this year, the health law made two important changes to Medicare. The first provision increases over time the number of beneficiaries subject to income-related Part B premiums, by eliminating the index on income. Part B covers doctors’ services, outpatient care, home health services, and other non-hospital medical services, including preventive care.

Although it is voluntary, 94 percent of Medicare beneficiaries opt to have it since the premiums charged to participate are set by law to cover only 25 percent of the actual cost of Part B benefits. However, higher-income beneficiaries must pay a premium that covers anywhere from 35 to 80 percent of Part B costs, depending on income. This year, beneficiaries must pay higher Part B premiums once their income reaches $85,000 for an individual or $170,000 for a couple. Since 2007, these income thresholds have been inflation-indexed so that only about 5 percent of beneficiaries are subject to higher Part B premiums. But since the new health law no longer permits these thresholds to rise with inflation, the number of beneficiaries subject to higher premiums will grow to 14 percent by 2019 (and will keep rising indefinitely thereafter).

The second change is that for the first time, beneficiaries with Part D coverage also must pay income-related premiums using the identical Part B income thresholds. Part D covers prescription drugs. Again, because premiums are set to cover only about one fourth of the actual cost of standard Part D benefits, 90 percent of beneficiaries elect some sort of prescription drug plan. This change will affect about 3 percent of Part D beneficiaries in 2011, but this will rise to 9 percent by 2019.

All told, by 2019, unless the health plan is repealed, these changes will require higher premium payments for 3.5 million Part B beneficiaries and 4.2 million Part D beneficiaries. The vast majority of these individuals have incomes far below the $200,000 (individual)/$250,000 (family) threshold that was repeatedly used by President Obama as the dividing line between those whose taxes should increase and everyone else.

Some might argue these are premiums, not taxes. But those with the highest incomes must pay premiums more than three times as large as those not classified “higher-income.” Actuarial considerations play no role in determining where such premiums are set. These individuals are paying higher premiums simply because their income is higher, not because their expected medical expenditures are higher. Indeed, the empirical evidence suggests that Medicare spending is higher among those who are poor rather than those who have high incomes. Thus, it is difficult conceptually to distinguish between an income-related premium and a tax on income.

Perhaps higher-income people should pay more for Medicare. But candidate Obama never ran on such a platform. And the higher taxes (euphemistically called “premiums”) on Medicare beneficiaries are flagrantly inconsistent with the president’s assurances about which individuals would face higher taxes under his administration.

Moreover, if income-related premiums are warranted, their justification should be to save Medicare, which currently faces unfunded liabilities that in today’s terms exceed the nation’s entire net worth. Instead, however, the $36 billion in higher taxes imposed on Medicare beneficiaries was used to mask the size of a massive new entitlement–one that we might have decided was not affordable had Democrats allowed rational discussion of the matter. These taxes were part of the now well-known “smoke and mirrors” used to make it appear as if health reform would reduce the deficit, even though any honest scoring of the plan shows quite the opposite. This is just one more example of the stealth taxes and broken promises that permeate Obamacare.

Conover is a research scholar in the Center for Health Policy and Inequalities Research at Duke University.

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