President Announces Budget Alternative That Would Preserve Medicare
Yesterday, President Obama announced his administration’s framework for addressing the deficit as an alternative to the current proposal under consideration in the House of Representatives proposed by Budget Committee Chairman Representative Paul Ryan, which would end the current Medicare program replacing it with a voucher system. Rather than saving the government money by shifting large out of pocket costs to Medicare consumers as is the case under voucher proposals, the Administration’s plan attempts to slow the growth of Medicare spending, addressing the root cause of the high costs in Medicare − the growth in health care sector spending overall.
Under the framework outlined by the President, Medicare savings would be achieved through strengthening some of the changes to payment and delivery system reforms included in the Affordable Care Act (ACA). For example, the President’s plan increases the authority of the Independent Payment Advisory Board (IPAB), the body designed to impose policies to slow the growth of Medicare spending, such as reductions in provider payment rates. However, the IPAB is prohibited from proposing programs that would increase cost-sharing for Medicare consumers. Under current law IPAB action is triggered if Medicare spending exceeds GDP plus one percent. Under the proposal released yesterday the trigger would be set at GDP plus 0.5 percent. Also, the framework reinforces many of the delivery system reforms proposed in the ACA that aim to create greater efficiency in health care through improved quality, such as lowering the rate of avoidable hospital readmissions.
In addition, the plan would quicken the pace at which generic drugs enter the market as well as require rebates to Medicare from drug manufacturers for drugs provided under the Medicare Prescription Drug benefit. Moreover, the proposal fully pays for a permanent fix to the Sustainable Growth Rate (SGR) provider payment formula.
Take action to prevent cuts to Medicare and Medicaid.
Read Medicare Rights Center President Joe Baker’s statement on the President’s framework.
Read the fact sheet on President Obama’s framework for the budget.
Watch the President’s speech on the framework for the budget.
Partnership for Patients Program Aims to Prevent Patient Harm and Lower Cost
This week, the Department of Health and Human Services (HHS) launched the “Partnership for Patients,” a partnership between public and private entities designed to improve efficiencies in health care systems, including Medicare, through improving the quality of care patients receive at hospitals. The Partnership for Patients program was cited by the Obama Administration as an example of a delivery system reform that could lead to significant savings for the Medicare program and help to reduce the deficit.
The first goal of the program is to keep patients from getting injured or sicker as a result of hospital acquired conditions, reducing the rate of theses incidents by 40 percent over the next three years. The second goal is to reduce unnecessary hospital readmissions by 20 percent. The program hopes to accomplish this by improving transitions from hospitals to other care settings that cause health complications that require re-admission to hospitals. According to HHS, on average, one of every seven people with Medicare are harmed during the course of care, costing the government approximately $4.4 billion each year. The initiative could save up to $35 billion over the next three years, including $10 billion of savings to the Medicare program. Over the next ten years savings to the Medicare program could total as much as $50 billion.
The program will be funded through $1 billion made available by the Affordable Care Act (ACA). Around $500 million will be dedicated to testing models and the development of best practices in patient safety through the newly established Center for Medicare and Medicaid Innovations (CMMI) at the Center for Medicare & Medicaid Services (CMS). In addition, CMS will dedicate $500 million to the ACA-created Community-based Care Transition Program which supports hospitals, providers, and other care-givers help Medicare consumers at high risk for readmissions to transition to other care settings safely.
Read more about the Partnership for Patients.
Read the HHS press release on the launch of Partnership for Patients.
All states offer a variety of Medicaid programs and several can help people with Medicare. If you qualify for a Medicaid program (no matter which one), Medicaid can help pay for costs and services that Medicare does not cover. Medicare is the primary payer and Medicaid pays second.
For services that both Medicare and Medicaid can cover (such as doctors’ visits, hospital care, home care and skilled nursing facility care), Medicare will pay first and Medicaid will pay second, by covering your remaining costs, such as the Medicare coinsurances and copayments.
Medicaid can cover much more long-term care than Medicare does. Medicare requirements for coverage of home care and skilled nursing facility (nursing home) services are generally stricter than Medicaid’s and the coverage itself is much more limited.
Medicaid will also pay for medical services not covered at all by Medicare as long as they are covered by Medicaid. Such services may include routine dental services and transportation to and from doctors’ appointments.
Learn more about Medicaid and Medicare at www.MedicareInteractive.org.
As the debate over the budget deficit continues, the Kaiser Family Foundation has released three data spotlights that examine out-of-pocket health care spending among people with Medicare. The spotlights also provide income and asset estimates for future Medicare consumers.
Read Kaiser’s data spotlights.