No Supercommittee Agreement; What Comes Next?
Last week the Joint Select Committee on Deficit Reduction, also known as the supercommittee, announced that its members were unable to agree on a package that would reduce the deficit by at least $1.2 trillion. With Medicare and Medicaid at the center of the supercommittee’s discussions, both programs would likely have faced difficult cuts had an agreement been reached. Ultimately, a major hurdle to agreement appeared to be the supercommittee’s lack of consensus on what proportion of deficit reduction should come from revenues compared to cuts.
As a result, as required by the Budget Control Act of 2011, a series of automatic cuts known as a “sequester” will take effect in 2013, with reductions split evenly between defense spending and discretionary programs. Medicaid and Social Security are completely protected from the automatic cuts. Medicare is mostly protected, though the Medicare provider payment rates will be subject to a 2 percent cut. Other programs that remain at risk are those authorized by the Older Americans Act that provide services, including transportation and food assistance, to older Americans. Some members of Congress are already decrying the cuts to defense spending, but reducing them would result in deeper cuts to discretionary programs that provide needed services to older Americans.
While many of the proposals under consideration by the supercommittee, including raising the Medicare eligibility age and increasing Medicare cost-sharing, have not been included in the sequester package, they and similar proposals will continue to receive attention from policymakers in future deficit reduction and entitlement reform discussions.
Learn more about the Budget Control Act of 2011 and what happens now.
Understanding MA Plan Bonus Payments in 2012
Since the inception of Medicare private health plans under the Medicare Advantage (MA) program, plans have received ratings of one to five stars based on their performance on a number of quality measurements. These measurements reflect both medical and consumer experiences, including the quality of customer service, member satisfaction and health outcomes. The Affordable Care Act (ACA) changed the way plans are paid by eliminating overpayments to plans (before health reform, coverage under an MA plan cost Medicare 9 percent more per beneficiary than under Original Medicare). In addition, the ACA created a quality bonus payment system whereby plans are rewarded financially if they receive four- or five-star ratings. Plans are required to use bonus payments to provide extra benefits, such as coverage for eyeglasses and other vision care. However, the Centers for Medicare & Medicaid Services (CMS) expanded the policy through its demonstration authority to allow plans that receive star ratings of 3 or 3.5 to also receive bonus payments. The goal of the bonus payment policy is to create incentives for MA plans to improve the quality of their services, and subsequently, their quality ratings.
The vast majority—91 percent—of MA plans will receive bonus payments based on quality star ratings this year, according to a November report issued by the Kaiser Family Foundation titled “Medicare Advantage Plan Star Ratings and Bonus Payments in 2012.” The study also found that plans with star ratings of 3 or 3.5 (identifying them as average performers) will receive two-thirds of these bonuses. The remaining one-third of bonuses will be given to plans that achieve a star rating of four or higher. On average, MA plans will receive an estimated $281 bonus per enrollee in 2012, but that amount varies based on a number of factors, including the plan’s service area.
Read the Kaiser Family Foundation’s report “Medicare Advantage Plan Star Ratings and Bonus Payments in 2012.”
The American Dental Association (ADA) recently created an Action Alert to urge U.S. senators to co-sponsor S. 1878. This legislation would support programs like Donated Dental Services (DDS), which helps thousands of people with chronic illness receive the dental care they need. Such programs are important for Medicare beneficiaries because Medicare does not cover most dental services.
Urge your senators to support affordable dental care.