Medicare Watch

Proposed Budget Ends Medicare and Medicaid Programs As We Know Them

House Budget Committee Chairman Representative Paul Ryan reintroduced a proposal that would end the Medicare and Medicaid programs as they exist today, significantly increasing costs and decreasing access to care for Medicare and Medicaid beneficiaries. Beginning in 2023, the budget proposal converts Medicare into a premium support, or voucher, program, where people with Medicare would receive a set payment to purchase coverage from a private insurance company or from Original Medicare. However, Original Medicare would likely be severely weakened, costing beneficiaries more than it does today. The proposal gives private plans great flexibility in their benefit design, which could attract healthier individuals that require less care. Because Original Medicare would then provide better coverage for those with serious health conditions, its risk pool would likely have a greater number of people with serious illnesses and conditions. Consequently, those with Original Medicare, including beneficiaries in the program today, would ultimately be subject to higher costs as Original Medicare serves a population that is older, sicker and more costly.

Moreover, because the budget places a cap on Medicare spending, the amount of the voucher may not be enough to cover rising health care costs and would thus become more inadequate over time. As half of all Medicare beneficiaries have annual incomes below $25,000, and Medicare households spend, on average, 15 percent of their incomes on health care, many would be in a poor position to face additional out-of-pocket health costs.

The proposed program would also establish “block grants” for Medicaid, where the government would provide a capped amount of funding to states for the program. The proposal cuts Medicaid by over $800 billion. The depth of the cut would likely require states to reduce coverage, restrict eligibility and increase costs to enrollees, resulting in reduced access to care. Many people with Medicare and their families rely on Medicaid as the largest provider of long-term care services and supports in the country.

Unfortunately, the proposed Ryan budget does little to address the real cause of increased Medicare spending: rising costs in the health care sector overall. In fact, Medicare spending per enrollee grows more slowly than its private counterparts, because it is more efficient. The Affordable Care Act (ACA) has demonstrated that the government can achieve savings without shifting costs to people with Medicare: the law bolsters Medicare’s finances by eight years, while also investing in new benefits, such as closing the Medicare prescription drug coverage gap, or doughnut hole (see article below). Unlike the ACA, the House budget proposal cuts Medicare by billions of dollars and does not make any new investments in the program. In fact, it re-opens the coverage gap for future Medicare beneficiaries.

Read Medicare Rights Center President Joe Baker’s statement on Representative Ryan’s House budget proposal.

Read the Center on Budget and Policy Priorities’ report, “What You Need to Know About Premium Support.”

The Affordable Care Act Turns Two: What It Means for People with Medicare

Millions of people with Medicare have benefited from the Affordable Care Act (ACA), which was passed two years ago this week. For the second anniversary of the ACA, the Medicare Rights Center has developed new materials to help people with Medicare better understand the impact of the law on them and the entire program. For example, the ACA closes the Medicare prescription drug coverage gap, also known as the doughnut hole. Before the ACA, Medicare beneficiaries who reached the doughnut hole were required to pay 100 percent of the cost of their drugs out-of-pocket. The ACA phases out the doughnut hole over time. In 2011, over three million people with Medicare received discounts on drugs as a result of the ACA, and in 2012, people who reach the coverage gap will pay 50 percent of the cost of brand name drugs and 86 percent of the cost of generic drugs.

The law also improves access to preventive care. Regardless of whether beneficiaries are enrolled in Original Medicare or Medicare private health plans, also known as Medicare Advantage plans, most preventive services are free. Preventive benefits that now have no cost-sharing requirement include mammograms, certain colonoscopies, prostate cancer screenings, depression screenings, obesity screenings and counseling, diabetes screenings and screenings for heart disease. The ACA also added a new Annual Wellness visit. While this visit is not a head-to-toe physical, it gives Medicare beneficiaries the opportunity to meet with their doctors to set up a preventive care plan based on their individual needs. In 2011, over 20 million people with Medicare received at least one free preventive service.

The ACA also strengthens Medicare’s financial outlook without decreasing beneficiaries’ access to services or shifting extra costs to them. The law increases the lifespan of the Medicare trust fund by an additional eight years. As a result, if the law were repealed, the trust fund would expire in 2016, rather than in 2024. The ACA achieves savings through its efforts to attack waste, fraud and abuse in the Medicare program and promote increased efficiency and quality of care and coverage. For example, prior to the ACA, Medicare paid Medicare Advantage plans nine percent more per enrollee than it cost to provide care for the same person under Original Medicare. The ACA gradually reduces these overpayments to the private insurance companies that sponsor Medicare Advantage plans to make the costs of private plans more consistent with those of Original Medicare. However, these reductions will not translate into cuts in people’s guaranteed benefits: Medicare Advantage plans are still required to provide coverage that is at least as good as Original Medicare’s. In addition, to encourage greater efficiency, the ACA slows annual increases in Medicare payments to hospitals, skilled nursing facilities and home health agencies. However, the law does not cut existing payments to Medicare providers and actually increases payments for primary care.

To learn more about the ACA and its benefits for Medicare, read the Medicare Rights Center’s new report, “The Affordable Care Act: Before and After.”.

Read Medicare Rights President Joe Baker’s statement on the two-year anniversary of the Affordable Care Act..

Watch a short video about the Affordable Care Act and Medicare. .

Medicare Reminder

Medicare fraud occurs when doctors or other health care providers deceive Medicare into paying more than it should or paying for services when it should not. This is against the law, and you can help prevent it and report it. Some types of fraud include billing Medicare for services that are different than the ones you received, continuing to bill Medicare for rented medical equipment after you have returned it, and charging you for free services, such as preventive benefits.

When you receive your Medicare Summary Notice (MSN)—if you have Original Medicare—or your Explanation of Medicare Benefits (EOB)—if you are in a Medicare private health plan, or Medicare Advantage plan—look at it carefully to make sure that you actually received all of the services listed. MSNs and EOBs are summaries of claims that Medicare or your Medicare Advantage plan has processed for you. They are not bills. If you think a mistake has been made, call your doctor, hospital or other provider first.

Whether you receive your Medicare benefits from Original Medicare or a Medicare Advantage plan, you can report fraud by contacting 1-800-MEDICARE or the Inspector General’s fraud hotline at 1-800-HHS-TIPS. When Medicare investigates potential incidents of fraud, it will not use your name if you wish to remain confidential.

Learn more about Medicare fraud at www.medicareinteractive.org

 

Spotlight

The United Hospital Fund (UHF) recently released a report titled “Implementing Long-Term Care Reform in New York’s Medicaid Program.” Beginning July 2012, New York State will require individuals dually eligible for Medicare and Medicaid who meet certain criteria to participate in a managed long term care (LTC) plan. UHF’s report explains the history of Medicaid LTC financing and service delivery in New York and addresses challenges that the state will face in implementing mandatory managed LTC. New York State’s move to managed LTC follows an ongoing trend across the country to enact such Medicaid policy reform.

As part of New York’s Medicaid Redesign Team (MRT), the Medicare Rights Center has contributed suggestions to discussions around the implementation of the new managed LTC policy and its impact on dual eligibles statewide.

Read UHF’s report.