What the Heck are Medicare Vouchers?
In “What the Heck are Medicare Vouchers?” Dr. Ted Marmor, a Medicare Rights Center board member, discusses Medicare’s growing costs and why premium support proposals fail as a viable option for reducing the program’s expenditures.
Over the past few decades, the cost of medical care has outpaced inflation significantly, increasing expenses for both private and public insurance, including Medicare. Some members of Congress propose converting Medicare to a premium support program to mitigate this problem and to reduce the federal debt. Premium support, or voucher, models, such as the one proposed by Congressman Paul Ryan, also the Republican candidate for Vice President, would replace Medicare’s guaranteed set of benefits with a set amount that people could use to purchase health insurance from private plans. Supporters of the model argue that competition amongst private insurers would control health care inflation. As Marmor writes, however, under the Medicare Advantage program, which allows beneficiaries to receive their Medicare benefits through a private plan rather than the federal government, expenses per individual enrolled have been 10 to 15 percent higher than those for comparable enrollees of Original Medicare. Moreover, the amount of the voucher would be unlikely to keep pace with rising health care costs overall, so Medicare beneficiaries—half of whom have annual incomes below $22,000 and already spend 15 percent of their incomes on health care—would pay more for less health security. In a Harvard University follow-up analysis to a Congressional Budget Office (CBO) report, it is estimated that the premium support plan introduced by Ryan in 2011 would increase costs for beneficiaries by nearly $6,800 in the first year alone. Policies that aim to save money in the Medicare program should be based on solutions that preserve access to affordable health care and protect beneficiaries from the burden of added health costs.
According to Marmor, nations like the United States who have experienced a demographic shift successfully controlled their health care spending by holding their medical care systems to a budget—not by overhauling their national health systems. Medicare has been an innovator in delivery—and thereby cost—reform, and can continue to be, especially as provisions in the Affordable Care Act that aim to further control overall health care spending are implemented.
Read the article.
Part D Premium Increases May Cause Beneficiaries to Re-evaluate Plan Choices
Some popular Medicare Part D prescription drug plans (PDPs) will have increased premiums in 2013, according to a new report by Avalere Health of the Centers for Medicare & Medicaid Services (CMS). A few months ago, the Department of Health and Human Services announced that average premiums for basic Part D plans are projected to remain steady at $30 or less next year. While a number of the most-enrolled PDPs will see larger premium increases, cost increases among all PDPs will be around six percent.
Because of these premium increases, Medicare beneficiaries enrolled in the Part D Low-Income Subsidy (LIS), a federal benefit that lowers drug costs for people with limited incomes, may find that their monthly premiums are no longer covered in full by the program. Beneficiaries with LIS who are affected may consider alternative PDPs (“benchmark plans”) to avoid paying a monthly cost to retain coverage. These individuals should receive one of two notices: those with LIS who were automatically enrolled into a benchmark plan and stayed enrolled will receive a blue notice indicating that they will be automatically reassigned unless they choose a new plan, and those with LIS who joined a Part D plan on their own will receive a tan notice informing them that they will pay a portion of the plan’s premium unless they join a new plan covered in full by LIS. Current enrollees in plans with increased premiums in 2013 may also want to find another PDP to limit their out-of-pocket costs. Beneficiaries can use the Plan Finder tool available on Medicare.gov and via 800-Medicare to compare plans’ formularies, or lists of covered drugs, costs, and network pharmacies.
Read the Avalere Health report.
Fall Open Enrollment is the time of year when you can change your Medicare coverage. You can join a new Medicare Advantage plan or a new stand-alone prescription drug plan (PDP). If you have a Medicare Advantage plan, you can also return to Original Medicare with or without a stand-alone PDP. Keep these six things in mind while you are deciding on your Medicare coverage for 2013.
1. Fall Open Enrollment occurs from October 15 to December 7 of every year. If you enroll in a plan during this time, your coverage starts January 1.
2. Review your Annual Notice of Change (ANOC). Even if you like your current Medicare coverage, you should carefully read your ANOC to make sure the plan still features the benefits you need. Plans can change how they cover your care each year.
3. Help is out there. If you want to join a stand-alone PDP, use the Plan Finder tool on Medicare.gov to compare plans based on the drugs you take, the pharmacy you go to and your drug costs. If you want to join a Medicare Advantage plan, call 800-Medicare to find out what plans are offered in your area. After you have researched a plan, call the plan itself to make sure your doctors, hospitals and pharmacies are in network and that the plan covers all of your drugs. You can also call your State Health Insurance Assistance Program for more assistance.
4. The best way to enroll in a new plan is to call 800-MEDICARE. Enrolling in a new plan through Medicare is the best way to help protect you if there are problems with enrollment.
5. If you are dissatisfied with your Medicare Advantage plan, you can disenroll from that plan and join Original Medicare with or without a stand-alone PDP during the Medicare Advantage Disenrollment Period (MADP). The MADP spans January 1 to February 14.
6. Understand what you will pay for drugs and what new drugs will be covered by Medicare Part D in 2013. Beginning in 2013, Medicare Part D plans must cover benzodiazepines and barbiturates for people with epilepsy, certain types of cancer and chronic mental health conditions. Medicare coverage of drugs in the prescription drug coverage gap, also known as the doughnut hole, is changing as well. In 2013, someone is in the doughnut hole will have greater discounts than in previous years thanks to the Affordable Care Act.
Read more about the 6 things you should know about Fall Open Enrollment for 2013 at www.medicareinteractive.org, or call our helpline at 800-333-4114.
Congressman Paul Ryan, also the Republican candidate for Vice President, recently wrote an op-ed in which he defends the Romney-Ryan Medicare plan and criticizes aspects of the Affordable Care Act (ACA). In response to Congressman Ryan’s arguments, Joe Baker, Medicare Rights Center President, and Judith Stein, Center for Medicare Advocacy Executive Director, penned a letter and an op-ed explaining key consequences of the Romney-Ryan plan. In short, the proposal 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 $716 billion that the ACA saves in the Medicare program do not result from any cuts in benefits or increases in costs for people with Medicare. Instead, these savings allow Medicare to provide better care and lower costs to its enrollees by making preventive and wellness benefits available for free and by closing the prescription drug coverage gap, also known as the doughnut hole. To date, 5.4 million people with Medicare have saved $4.1 billion dollars on their prescriptions, with far more savings to come. Under the Romney-Ryan plan, these benefits and savings would simply disappear, leaving older adults and people with disabilities with less access to care and a greater financial burden to carry.
Read Medicare Rights’ and the Center for Medicare Advocacy’s letter, “Romney-Ryan Medicare Plan Not Better for Seniors.”
Read Medicare Rights’ and the Center for Medicare Advocacy’s op-ed, “Medicare Far Better Than Ryan's Prescription.”