The Deficit Commission Targets Medicare
On Wednesday, December 1, the National Commission on Fiscal Responsibility and Reform released its final plan to reduce the deficit, including proposals that would cut Medicare spending. The report questions the viability of the CLASS program, which provides limited insurance for long-term care supports and services, and recommends that it be reformed or eliminated, even though the program will generate revenue in the short term. Also, to address the lingering threat of a cut of over 20 percent in Medicare physician payment rates, the plan would freeze Medicare provider payments until 2013 and effectuate a 1 percent cut to payment rates in 2014.
To pay for lost revenue caused by the elimination of CLASS and the expense of the “doc fix,” the report suggests significant changes to Medicare benefits. For example, the report proposes a combined annual deductible of $550 for Part A (which covers inpatient services such as hospital stays) and Part B (which covers outpatient services such as doctor’s visits). It also proposes to apply a 20 percent coinsurance for all services under Parts A and B after the deductible is met. The Part A deductible for 2011 is $1,132; the Part B deductible is $162. This would effectively increase upfront out-of-pocket costs for those who visit doctors but do not require hospitalization. In addition, the proposal would potentially increase cost-sharing for people with shorter stays in a hospital or skilled nursing facility, as well as those receiving home care. While the proposal would create a catastrophic limit in Original Medicare, first reducing coinsurance to 5 percent after out-of-pockets costs exceed $5,500 and then eliminating cost-sharing once out-of-pocket costs reach $7,500, the plan would also eliminate Medigap coverage of deductibles up to the first $500 and then limit coverage of the next $5,000 in cost-sharing to 50 percent.
Furthermore, the plan requires a global spending target of Gross Domestic Product plus one percent for total federal health care costs, and if costs exceed the target, the President and Congress would need to make further cuts.
The commission will vote on the report on Friday. Congress is required to consider proposals if 14 out of 18 commissioners approve the report.
Read the National Commission on Fiscal Responsibility and Reform’s report.
Physician Payment Cuts Delayed, but Congress Still Has Work To Do
Congress passed legislation this week that will delay, for one month, steep cuts in Medicare physician payments. Signed into law on November 30, the legislation averted a 23 percent reduction in reimbursement rates for physicians who bill Medicare, which was due to take effect December 1. However, if Congress does not pass a longer-term fix in the next few weeks, policymakers will have to revisit the issue again in just one short month.
In addition, there is still important work to be done by the end of December on two other issues that affect Medicare consumers’ access to care. Congress must act now to renew the Qualified Individual (QI) program and extend the Medicare therapy caps exceptions process. Without action, both will expire at the end of this year. QI, a Medicare Savings Program (MSP), helps people with limited incomes pay their Part B premiums. The therapy caps exceptions process allows people who need therapy services to apply for exceptions to the Medicare coverage caps of $1,860 for combined speech and physical therapy services and $1,860 for occupational therapy services.
Take action now. Tell your senators and representatives to protect Medicare consumers’ access to care and preserve the QI program and therapy caps exceptions process.
Experts from the Medicare Rights Center will be on hand to answer questions during a live health chat on Tuesday, December 7, at noon, Central Time. The chat, hosted by the Tribune Company and moderated by Chicago Tribune’s Judy Graham, will address the concerns of people who will soon become eligible for Medicare, including the first wave of baby boomers, who will age into Medicare this coming year. The chat is free and open to the public, and attendees are encouraged to submit questions.
View the chat page and sign up to receive an e-mail reminder.