Affordable Care Act Reduces Costs for People with Medicare
Thanks to the Affordable Care Act (ACA), Medicare beneficiaries enrolled in Original Medicare will save $5,000 each, on average, in out-of-pocket health care expenses over the period of 2010 to 2022, according to a new report by the Department of Health and Human Services’ Office of the Assistant Secretary for Planning and Evaluation (ASPE). The law offers improved benefits for people with Medicare and reduces their expenditures, helping them afford needed care.
According to the report, the ACA reduces costs significantly for Medicare beneficiaries who fall into the Part D prescription drug coverage gap, widely known as the doughnut hole. Affected individuals now receive discounts on their medications in the coverage gap, whereas prior to the law’s enactment, they were required to pay the full cost of their drugs out-of-pocket. According to the report, these Medicare beneficiaries will save more than $18,000 from 2010 to 2022 as a direct result of ACA implementation. The ACA closes the coverage gap completely by 2020. In addition, people with Medicare can now access many preventive services for free that were previously covered with cost-sharing requirements.
Furthermore, the ACA slows the increase of Part B premiums, the monthly cost of maintaining outpatient health insurance through Medicare. Beneficiary copayments and coinsurances will also rise more slowly because of reductions in the rate of growth in payments to hospitals and other providers. The law contains provisions that lower Medicare spending as a whole by diminishing waste, fraud and abuse, eliminating overpayments to Medicare private health plans, and implementing delivery system reforms to improve quality of care for beneficiaries. All of these provisions control costs in the Medicare program without cutting benefits or shifting costs to people with Medicare.
Read the ASPE report.
Effects of MIPPA on Medicare Savings Program Enrollments
The Government Accountability Office (GAO) recently released a report outlining the effects of the Medicare Improvements for Patients and Providers Act (MIPPA) on enrollments into Medicare Savings Programs (MSPs). According to the GAO, the Social Security Administration (SSA) invested $12 million in 2009 and 2010 to transfer data from completed Part D Low-Income Subsidy (LIS) applications to state Medicaid agencies. The LIS, commonly referred to as Extra Help, lowers prescription drug costs for eligible Medicare beneficiaries. States used this LIS data to automatically enroll Medicare beneficiaries into MSPs, programs that help cover the monthly Part B premium for beneficiaries with limited income. Congress passed MIPPA and its data sharing provisions in 2008, in response to historically low MSP enrollment. Before MIPPA, many states followed cumbersome application and enrollment processes that created barriers to enrollment into MSPs.
Beginning January 1, 2010, MIPPA required SSA to send information from completed LIS applications to state Medicaid agencies, and states in turn were to use this information to initiate an MSP application. According to the GAO report, while several factors may have contributed to increased MSP enrollment in 2010 and 2011, including a greater need for low-income programs due to the recent economic downturn, officials from 28 states report that MSP enrollment has increased in their states as a direct result of MIPPA and its data transfer provisions. This data transfer and other SSA improvements increased MSP enrollment each year since 2007, with the largest increases in enrollment taking place in 2010 and 2011, the first two years that MIPPA data transfer requirements were in effect.
MIPPA contains other provisions that have important implications for Medicare beneficiaries. Because of both MIPPA and the Affordable Care Act, private health plans are restricted in how they market their services to people with Medicare, which reduces fraud in the program and keeps health care costs down. MIPPA also ensured that Medicare Part D will begin covering benzodiazepines and barbiturates (anti-anxiety medications) starting in 2013. MIPPA is an important law that has successfully increased enrollment in MSPs, programs that make Medicare affordable for beneficiaries with limited income. In these tough economic times, states must continue to implement MIPPA and work to ensure that all Medicare beneficiaries who are eligible for MSPs are enrolled efficiently.
Read the GAO report, “Medicare Savings Programs: Implementation of Requirements Aimed at Increasing Enrollment.”
To enroll in Medicare if you have End-Stage Renal Disease (ESRD), you should go to your local Social Security office. Your doctor and dialysis center will have to send documentation to Social Security verifying that you have ESRD and stating what kind of treatment you need. Call the National Social Security Hotline at 1-800-772-1213 for the office nearest you. If you are unable to enroll yourself due to illness, a family member or other responsible party can enroll for you.
When your Medicare begins depends on your treatment plan:
If you have been getting dialysis as an outpatient, Medicare eligibility starts on the first day of the fourth month you get renal dialysis.
If you need dialysis and start a self-dialysis training program, Medicare begins the first day of the first month of the program. You must start the training program before your third month of dialysis. Your doctor must also state that he or she expects that you can complete the training program and will continue self-dialysis after the program ends.
If you receive a kidney transplant, Medicare begins the month you are admitted to a Medicare-approved hospital for the transplant or for health care services that you need before getting the transplant. You must receive the transplant that same month or within the two following months. If the transplant is delayed, Medicare coverage begins two months before the month of your transplant.
Learn more about Medicare coverage of ESRD at www.medicareinteractive.org, or call our helpline at 800-333-4114.
Last week, an opinion piece written by Medicare Rights Center President Joe Baker and Center for Medicare Advocacy Executive Director Judith Stein appeared in the Hartford Courant, explaining some key consequences of Vice Presidential candidate Paul Ryan’s Medicare plan for older adults and people with disabilities. Congressman Ryan’s plan would shift costs from the federal government to people with Medicare, ignoring the economic realities facing Medicare families. Under the plan, Medicare beneficiaries would receive an annual allowance (also known as a voucher or premium support) to purchase health insurance. The value of this voucher would be unlikely to keep pace with health care inflation, potentially adding thousands of dollars more per year to Medicare beneficiaries’ out-of-pocket expenses. Additionally, the Ryan plan would hurt current and near-term retirees by repealing health care reform, which, to date, has saved people with Medicare approximately $4 billion on drugs and has significantly increased access to preventive and wellness care.
Read the Hartford Courant op-ed, “Medicare Far Better Than Ryan’s Prescription.”