Medicare Watch

Doing the Math: The Cost of Medicare

There has been much discussion of late in the context of the deficit-reduction debate of Medicare beneficiaries’ “skin in the game.” The term “skin in the game” refers to how much people with Medicare pay out of pocket for coverage. Some believe that Medicare beneficiaries pay too little for care and overutilize care, and that if they paid more—that is, if they had more “skin in the game”—they would use less care generally. However, what many don’t realize is how much beneficiaries already pay for coverage. People with Medicare live on limited incomes—half have incomes lower than $22,000 per year—and on average spend 15 percent of their income on health care.  

To help raise awareness of how much people with Medicare pay out of pocket, the Medicare Rights Center has developed a fact sheet titled, “Doing the Math: The Cost of Medicare.” The fact sheet reveals that a relatively healthy Medicare beneficiary with a Medigap plan already pays over $5,000 per year in premiums and deductibles alone. This does not include the cost of drugs at the pharmacy, costs associated with hospital stays, or out-of-pocket costs associated with services that Medicare does not pay for, such as vision, dental and hearing care. 

As a result of the cost burden people with Medicare already face, proposals that shift greater costs to beneficiaries—by, for example, increasing copayments and limiting coverage under supplemental insurance plans like Medigap—may cause them to delay not only unnecessary but necessary care, putting their health and quality of life at risk.

Read “Doing the Math: The Cost of Medicare.”

Moving Forward on ACOs

Today the Centers for Medicare & Medicaid Services (CMS) released the long-awaited final rule that will govern Accountable Care Organizations (ACOs). Established by the Affordable Care Act (ACA), 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 while improving the quality of care patients receive. Providers who participate in ACOs that achieve these savings will be able to share in them.

While the final rule preserves certain aspects of the proposed rule, it does contain some significant changes. As was initially proposed, beneficiaries assigned to ACOs will still receive notice about participation and will not be locked in to a specific provider network. This means that beneficiaries who are assigned to an ACO will not be limited to using providers who are a part of that ACO, but may see any provider who participates in Medicare, as they do now. Among other changes from the proposed rule, the final rule reduces the number of reportable measures to assess quality by almost half, with a phase-in of additional measures over time. In addition, the rule expands the types of entities allowed to form an ACO to include Federally Qualified Health Centers and Rural Health Centers. 

Read the CMS press release on the final rule.

Read the CMS fact sheets on ACOs and the final rule.

Read the final rule.

Medicare Reminder

If you want to get the Medicare prescription drug benefit (Part D), you must choose a private plan offering the benefit in your area and enroll in it. When choosing a Medicare private drug plan, make sure to look at all the costs, not just the premium. Your costs throughout the year will depend on what drugs you take, whether your plan covers them, and whether there are any coverage restrictions.

In most cases, you can only enroll in the Medicare drug benefit during specific annual enrollment periods, such as the Fall Open Enrollment Period from October 15 to December 7. Enroll early during an enrollment period to make sure that your new coverage starts when it should.

Learn more about enrolling in the Medicare prescription drug benefit at www.medicareinteractive.org.

Spotlight

Social Security and Supplemental Security Income (SSI) benefits will increase by 3.6 percent in 2012, the Social Security Administration (SSA) announced this week. Also known as a cost-of-living adjustment (COLA), the increase is the first since 2009 for the millions of Americans who receive these monthly benefits.

Read SSA’s press release.