Medicare Watch

The House Budget Proposal Means Changes for People with Medicare

According to a poll conducted by the Kaiser Family Foundation, 62 percent of people aged 65 and older oppose changing Medicare from its current form to a system in which the government contributes a capped amount to people with Medicare to purchase private insurance, as proposed under the House budget resolution passed on April 15. However, the poll also highlights confusion over the terms of the debate. Only 12 percent of those polled understood the term “premium support,” 28 percent stated that they had heard the term but were unsure of its meaning, and 58 percent responded that they had never heard the term before. The term “voucher” was slightly better understood by individuals polled: 30 percent understood the term when used in reference to Medicare, 36 percent had heard the term but did not know its meaning, and 32 percent had never heard the term “voucher” in the context of Medicare.  

The Medicare Rights Center has developed its own materials to help explain the terms of the debate and the implications of the House budget resolution. “Decoding the 2012 House Budget Resolution” explains some of the fundamental changes the House resolution would make to Medicare and Medicaid and highlights the impact that these proposals would have on people with Medicare, both now and in the future. For example, the Congressional Budget Office (CBO) estimates that the House budget resolution’s scheme to convert Medicare into a “premium support” program—also known as a “voucher” or “defined contribution” program—will double projected costs for people with Medicare. 

Read “Decoding the 2012 House Budget Resolution.”

Take action to prevent cuts to Medicare and Medicaid.

Caps on Federal Spending Pose Threat to Medicare Program

Caps on federal spending would require extreme reductions in funding for Medicare, Medicaid and Social Security, according to a report released this month by the Center on Budget and Policy Priorities. The report discusses the implications of proposals—like the one offered by Senators Bob Corker and Claire McCaskill—that require across-the-board cuts if the budget exceeds a specified amount. 

In the case of the Corker-McCaskill proposal, the spending cap grows steadily until it reaches 20.6 percent of the Gross Domestic Product (GDP). However, the report states that such targets do not take into account the growing number of individuals who will become Medicare-eligible or the rising costs of health care in the United States, factors that will cause costs to grow faster over the next 20 years than they have over the past 20 years. For example, the percentage of Americans who are 65 and older will almost double over the next 25 years, increasing from 13 percent in 2010 to 25 percent in 2035, a much higher rate of increase than occurred between 1970 and 2008, the period on which the spending cap amount is based. 

As a result, such a cap would force Congress to take aggressive action to avoid exceeding the cap. These actions could include more dramatic versions of the proposal included in the House budget resolution, which would replace Medicare with a voucher program and convert Medicaid funding to block grants. 

Read the report from the Center on Budget and Policy Priorities.

Medicare Reminder

While the majority of people with Medicare get their health coverage from Original Medicare, some people get their benefits from a Medicare private health plan, sometimes called a “Medicare Advantage” plan.

These private health plans contract with Medicare and are paid a fixed amount to provide Medicare benefits. They are generally “managed care plans.” The most common types are Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO) and Private Fee-For-Service (PFFS) plans.

You may also see Medicare Advantage plans called Special Needs Plans (SNP), Provider Sponsored Organizations (PSO) and Medicare Medical Savings Accounts (MSAs).

You still have Medicare if you join a Medicare private health plan. In most cases, you must still pay your Part B monthly premium (and your Part A premium, if you have one). The plan must provide all Part A and Part B services but can do so with different rules, costs and restrictions that can affect how and when you can get care.

Learn more about Medicare private health plans at www.MedicareInteractive.org.

Spotlight

According to an article published this week by the Washington Post and Kaiser Health News, many people with Medicare are unaware of a new benefit made possible by the Affordable Care Act: certain preventive services are now free of charge. The article featured Medicare Rights Center President Joe Baker.

Read the article.

Learn more about Medicare coverage of preventive care services.