Medicare Watch

Prognosis for Medicare Better Than in Past Years

Health reform helped extend the Medicare Hospital Insurance (HI) Trust Fund for 12 years, according to the 2010 Medicare Trustees report released today. Specifically, the report states that the Affordable Care Act (ACA) will extend the life of the Trust Fund through 2029, whereas last year’s report projected the fund to remain solvent only through 2017. While the report was more optimistic than in past years, the trustees cautioned that in order for projections to be met, Congress must fully enact many of the provisions included in the Affordable Care Act (ACA) and implement additional reforms in the future. For example, while the trustees reported that Part B spending will account for about 2.5 percent of GDP at the end of the 75 year projection period, as opposed to 4.5 percent as estimated in 2009, the report cautions that such estimates include payment cuts to doctors through the Sustainable Growth Rate (SGR) formula, which are unlikely to occur. However, the report states that improvement in the financial outlook of Medicare are possible even without including the full doctors’ cuts, through higher provider productivity and delivery system reforms included in ACA that promote care efficiency and quality. The Medicare Trustees Report is released annually as an update on Medicare’s outlook.  

Read a summary of the 2010 Medicare Trustees Report.

Read the 2010 Medicare Trustees Report.

Read statement on the Report by Medicare Rights Center’s President, Joe Baker.

 

Relief for States Means More $ for Medicaid

Today, the Senate approved $26 billion in relief for states that are suffering budget shortfalls, including $16 billion in funding for state Medicaid programs. The economic downturn, and specifically higher unemployment rates, have increased the demand for Medicaid while also causing greater financial strain on states.

Additional federal money to states for Medicaid was first made available in 2009 through the American Recovery and Reinvestment Act, which included an increase in the Federal Medical Assistance Percentage (FMAP). The increased funding is due to expire, however, on December 31, 2010, and the legislation passed today by the Senate would extend the increased matching funds through June 2011.  The House of Representatives, who are currently on August recess, will return to Washington, D.C., to vote on the financial aid package next week. 

Medicaid programs provide health coverage for low-income individuals, including Medicare consumers who qualify for Medicaid. People with both Medicare and Medicaid are known as dual-eligibles. Medicaid can help cover Medicare cost-sharing and fill in gaps in Medicare coverage, such as many long-term care supports and services. 

Read more about the FMAP legislation and today’s vote. 

Learn more about implications of proposed state budget cuts.

Spotlight

Earlier today, Medicare Rights President Joe Baker appeared on C-SPAN's morning call-in program, the Washington Journal. On the program, he answered callers' questions about health reform's impact on the Medicare prescription drug benefit (Part D).

Watch Joe Baker on C-SPAN.

Medicare Reminder

Consumers who reach the coverage gap in the Medicare prescription drug benefit (Part D) in 2010 will receive a one-time $250 rebate check. The coverage gap (commonly known as the “doughnut hole”) will be phased out as a result of the new health reform law. The $250 checks are the first step in this phaseout.

Everyone who falls into the doughnut hole in 2010 will receive a check, and Medicare will send the checks automatically. There are no forms to fill out, and consumers should not give out personal information to anyone who calls about the rebate.

Learn more about the $250 doughnut hole rebate.