Medicare Watch

Proposed Budget Would End Current Medicare and Medicaid Programs

House Budget Committee
Chairman Paul Ryan’s budget proposal, released this past Tuesday, would end the Medicare and Medicaid programs as we know them today and pass significant extra costs on to consumers and states. Starting in 2022, the current Medicare program would be replaced by a “premium support” or voucher program that would provide a limited government contribution to Medicare consumers, who would use the payment to buy coverage from private insurance companies. This would result in far higher out-of-pocket costs for consumers, according to multiple analyses. The payments would grow more slowly than increases in spending in the health care sector overall, making them insufficient to purchase coverage as good as what is currently provided under Medicare. The Congressional Budget Office (CBO) estimates that Medicare consumers will be responsible for a considerably higher percentage of their health insurance costs under the scheme. A significant increase in out-of-pocket costs could be devastating for the Medicare population, half of whom have household incomes below $20,000. And many in the next generation of Medicare consumers are not projected to be in considerably better financial situations: half are estimated to have household incomes below $26,400. In addition, the proposal would gradually raise the age of Medicare eligibility from 65 to 67. 

The program would also establish “block grants” for Medicaid, meaning that the government would provide a capped amount of funding to states for the program beginning in 2013, cutting over $1 trillion. According to the CBO, the costs of medical services for Medicaid enrollees would grow faster than the block grant amount, leading to severe shortfalls that would have to be covered by states, which could raise taxes in order to cover the extra costs, or that would cause states to reduce payments to doctors, cut benefits, increase cost-sharing, or cut entire populations from the program. One such population could be Medicare consumers, who rely on Medicaid to cover extra cost-sharing under Medicare and long-term care, since Medicare does not provide coverage for long-term care facilities or services. 

Regrettably, the House budget does little to address the underlying problem that causes growth in Medicare spending: growth in spending in the health care sector overall. The House budget repeals the Affordable Care Act (ACA), which attempts to bend the Medicare cost curve not through shifting greater costs to consumers, but through cracking down on waste, fraud, and abuse and enacting delivery system reforms that increase the quality and coordination of care for people with Medicare while increasing efficiency within the program. In fact, the ACA is estimated to increase the life of the Medicare trust fund by 12 years without shifting new costs to consumers.

Take action to prevent cuts to Medicare and Medicaid.

Read Medicare Rights Center President Joe Baker’s statement on the House budget.

Read the Medicare Rights Center’s “Medicare and Medicaid: Essential Partners for Older Americans and People with Disabilities.”

Read the CBO’s analysis of the House budget.

Read the Leadership Council of Aging Organizations’ letter to Congress on the adverse effects of cuts to Medicaid on people with Medicare.

CMS Releases Rules on ACOs

Last week, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule on Accountable Care Organizations (ACOs). ACOs create incentives for health care providers—doctors, nurses, hospitals and others—to work together to provide patient-centered care by organizing together in groups. The promise of ACOs is that by providing patient-centered, coordinated care, cutting down on duplications of tests, and preventing avoidable hospitalizations, the Medicare program will achieve savings. Providers who participate in ACOs that achieve these savings will be able to share in them.

According to the proposed rule, if patients give permission, Medicare will share claims data with providers so that they may get a full picture of the care that their patients are receiving. This is intended to help providers within the ACO determine what care the patient receives now, what care they may need and what other providers they are seeing. CMS will attribute or assign patients to an ACO based on which primary care doctor they have received most of their care from. Even though a patient may be assigned to an ACO, ACOs are not like managed-care networks; patients will not be required to see a provider within the ACO, but can do so if they wish. In addition, providers participating in ACOs must provide notice to patients that they are participating in the program.

ACOs, established by the Affordable Care Act (ACA), are one of many different provisions of the law, which attempts to save the Medicare program money not by cutting benefits or raising cost-sharing, but through addressing underlying delivery system problems that increase costs. These problems include poor care coordination and payments that are based on the number rather than quality of services provided.

The proposed rule is open for comment, which should be submitted to CMS no later than 5:00 p.m., ET on June 6, 2011.

Read the proposed rule.

Medicare Reminder

Medicare Savings Programs (MSPs), which are administered by Medicaid, help people with limited incomes pay Medicare costs, such as premiums, coinsurance and deductibles. To apply for an MSP, you will need to call your local Medicaid office for exact rules in your state. Below is a general guide to the process.

Call your local Medicaid office to ask how you can submit your application. Many states allow you to submit your application online, through the mail, or through community health centers or other organizations. Some states still require that you schedule an appointment and go in person to the Medicaid office to apply.

Examples of documentation that may be required for your MSP application include:

• Your Social Security card
• Your Medicare card
• Your birth certificate, passport or green card
• Proof of your address, such as an electric or phone bill
• Proof of your income, such as a Social Security Administration award letter, income tax return or pay stub
• Information about your assets, such as bank statements, stock certificates or life insurance policies

The list of the exact documents that you will need to have for your application varies by state. Some states do not require that you submit documentation of your income or assets. Contact your local Medicaid office to find out what documents you need.

Learn more about applying for a MSPs at www.MedicareInteractive.org.

Spotlight

Medicare Rights Center President Joe Baker appeared on Democracy Now! this morning to discuss the House budget proposal’s impact on the Medicare program.

Watch the Democracy Now! segment.