Medicare Watch

Kaiser Family Foundation Report Focuses on Trends in Medicare Supplemental Coverage

In light of proposed policy changes to Medigap insurance, a widely-used form of supplemental coverage to Medicare, the Kaiser Family Foundation (KFF) released, “Medigap: Spotlight on Enrollment, Premiums and Trends.” The report provides a detailed look at national and state trends in enrollment into Medigap plans and their various premiums. Medigap insurance plays an important role for Medicare beneficiaries who do not have retiree coverage or Medicaid. According to the KFF report, nearly one in four Medicare beneficiaries had a Medigap policy in 2010. The average Medigap monthly premium was $178 in 2010, but average premiums vary widely depending on the plan type. Plan F premiums, for instance, ranged from an average of $72 to an average of $366 in 2010. Even with the wide variation in price, Medigap premiums increased more slowly between 2006 and 2010 than Medicare Part B and Part D premiums.

The most popular Medigap plans are Plan C and Plan F, which account for more than half of all Medigap policies purchased. These plans provide what’s known as first-dollar coverage and cover both the Medicare Part A and Part B deductibles entirely. To find savings in Medicare, some policymakers propose eliminating first-dollar coverage. Eliminating first-dollar Medigap coverage shifts costs to Medicare beneficiaries who purchase Medigap insurance as a means of protecting themselves against high out-of-pocket expenses, and it fails to solve the real problem of rising costs in the health care system overall.

Read the full KFF report.

New Rule Proposed by CMS Addresses Accuracy and Accountability in Medicare Part C and Part D

Last week, the Centers for Medicare & Medicaid Services (CMS) released a proposal to improve payment accuracy for Medicare Advantage (Part C) and Medicare prescription drug (Part D) plans in 2014. Since 2010, Medicare Advantage premiums have fallen by 10 percent, and costs of the defined standard Part D plan will be lower in 2014 than they are in 2013. According to the 2014 Advance Notice and draft Call Letter, the standard Part D deductible will decrease to $310 in 2014 (from $325 in 2013), and cost-sharing amounts will also decrease. At the same time, Medicare beneficiaries in the Part D prescription drug coverage gap, also known as the “doughnut hole,” will continue to receive increased benefits in 2014. As a result of the Affordable Care Act (ACA), Medicare beneficiaries who have fallen into the doughnut hole will receive drug coverage and discounts of 52.5 percent on covered brand-name drugs and 28 percent on covered generic drugs.

CMS also announced a proposed rule to implement the ACA’s medical loss ratio (MLR) requirements for Part C and Part D plans to promote greater accountability and transparency. The proposed rule limits how much plans can spend on marketing, overhead and profit. Under the rule, plans would be required to spend at least 85 percent of their revenue on clinical services, prescription drugs, quality improvements and/or direct benefits to beneficiaries in the form of reduced Medicare premiums.

Read the CMS press release.

Medicare Reminder

Medicare will not generally pay for routine eye care, but it will pay for some eye care services if you have a chronic eye condition, such as cataracts or glaucoma.

Medicare will cover:

• Surgical procedures to help repair the function of the eye due to these conditions. For example, Medicare will cover surgery to remove the cataract and replace your eye’s lens with a fabricated intraocular lens.
• Eyeglasses or contacts only if you have had cataract surgery during which an intraocular lens was placed into your eye. Medicare will cover a standard pair of untinted prescription eyeglasses or contacts if you need them after surgery. If it is medically necessary, Medicare may pay for customized eyeglasses or contact lenses.
• An eye exam to diagnose potential vision problems. If you are having vision problems that indicate a serious eye condition, Medicare will pay for an exam to see what is wrong, even if it turns out there is not anything wrong with your sight.

Medicare will only pay for routine eye care in the following specific circumstances:

• If you have diabetes, Medicare will pay for an eye exam once every 12 months to check for eye disease due to the condition;
• If you are at high risk for glaucoma Medicare will cover an eye exam by a state-authorized eye doctor once every 12 months. You are considered to be at high risk if you:
  
• have diabetes;
• have a family history of glaucoma;
• are African American and age 50 or older; or
• are Hispanic and age 65 or older.

Learn more about Medicare coverage of eye care at
www.medicareinteractive.org.

Spotlight

Based on an analysis of the Budget and Economic Outlook: Fiscal Years 2013 to 2023, a report released by the Congressional Budget Office (CBO), the Center for Budget and Policy Priorities determined that projected Medicare spending between 2011 and 2020 has fallen by more than $500 billion since August 2010.

CBO reduced its Medicare spending projections due to a significantly low growth in such spending over the last three years. In fiscal year 2012, Medicare spending per beneficiary increased by only 0.4 percent, which is considerably lower than the 3.4 percent growth in gross domestic product (GDP) per capita. From 2010 to 2012, Medicare spending per beneficiary grew 1.9 percent per year while GDP increased by 3.2 percent per year. CBO projects that Medicare spending will continue to be flat until 2020.

Read the CBPP blog post.