Doing the Math: A Medicare Cost Worksheet and a Supercommittee Update
As Congress continues to debate changes to Medicare, many of the proposals under consideration would increase out-of-pocket costs for people with Medicare. In an effort to help policymakers and the public better understand what people with Medicare pay for health care, Medicare Rights Center has developed a Medicare cost worksheet. If you have Medicare, we invite you to fill out the worksheet with your health care costs to help us illustrate that people with Medicare already have significant “skin in the game.” Medicare beneficiaries, half of whom have incomes at or below $22,000 dollars per year and nearly half of whom suffer from three or more chronic conditions, already spend 15 percent of their incomes on health costs—three times as much as the non-Medicare population.
Fill out the Medicare cost worksheet.
As the November 23 deadline looms for the supercommittee to send a deficit-reduction proposal to Congress, both Democratic and Republican members of the committee offered new proposals this week. A proposal offered on November 7 by some Democrats on the committee would achieve $2.3 trillion in deficit reduction, half of which is achieved through spending cuts and half of which is achieved by raising revenues. The proposal reportedly includes a provision that allows entitlement changes, including cuts to Medicare, to take effect only if tax reforms also take effect. The new plan moderately reduces the cuts to both Medicare and Medicaid contained in the last proposal offered by Democratic members, but most significantly, the new proposal contains proportionally fewer cuts that would directly affect beneficiaries. According to reports, the November 7 proposal contains $350 billion dollars in deficit reduction from changes to Medicare, with $100 billion in spending reductions that would directly affect beneficiaries—half of what was offered in previous proposals. And an additional $250 billion in savings would be achieved through changes in provider payments. However, the details of how these savings will be achieved, including what the term “beneficiary changes” means, are not yet publicly available.
In comparison, the Republican plan put forth by Senator Pat Toomey achieves $1.5 trillion in deficit reduction. While the proposal does contain a limited amount of increased revenues through tax reforms, it characterizes some changes to Medicare that would affect beneficiary out-of-pocket costs, such as Medicare premium increases, as revenue raisers rather than cuts. In addition, the plan contains $700 billion in spending cuts, including cuts to Medicare and Medicaid, such as raising the Medicare eligibility age from 65 to 67.
Read a recent Associated Press article for the latest on the supercommittee.
Better Care Should Be Focus of Proposals to Reduce Spending on Dual Eligibles
In the context of deficit reduction, policies that attempt to rein in spending on those who are dually eligible for both Medicare and Medicaid (also known as dual eligibles), continue to receive a great deal of attention. While the cost of providing care for dual eligibles is high, so are their health care needs; two-thirds of dual eligibles have three or more chronic conditions, and three-fifths have cognitive impairments.
The Medicare Rights Center, in conjunction with several other consumer advocacy organizations, has developed a fact sheet discussing the complexity of the population’s needs and the potential dangers of mandating one-size-fits-all policies to address them, such as requiring dual eligibles to enroll in private plans. However, as the fact sheet states, there is little data available to show that mandatory managed care models actually achieve any savings or create a better patient experience. In fact, in the context of Medicare, private managed care plans have actually cost the program more than the traditional model. The document also warns that private plans are inexperienced in providing care to this population, and that many states lack the infrastructure necessary to move ahead quickly with private managed care models.
Additionally, the document addresses existing policies put in place by the Affordable Care Act (ACA), which established the Medicare-Medicaid Coordination Office (MMCO) with the mandate to explore policies to better coordinate care for dual eligibles. Since the passage of the ACA, MMCO has launched several demonstration projects, allowing for the exploration of a variety of models that build on the flexibility states already have to innovate, and that create new pathways for the federal government and states to partner in providing care to this population. However, such policies are still in their early stages, and there is little data that demonstrates what does and does not work on a large scale.
According to the document, the primary goal of policies that impact dual eligibles should be better care, and over the long term such better care may result in savings—for example, through reducing unnecessary hospitalizations. But, attempts to achieve savings through fast-tracking or mandating prescriptive policies, whether it be mandatory managed care or setting caps on expenditures for dual eligibles, could result in disruptions of care, which can have serious health and financial consequences for this complex low-income population.
Read the fact sheet “Mandatory Managed Care for Dual Eligibles Could Harm Patients and Stifle Innovation.”
The Fall Open Enrollment Period will come to a close in four weeks, so now is the time to review your coverage options. Listed below are six things to keep in mind while you are deciding on your Medicare coverage for 2012.
- The Fall Open Enrollment Period dates have changed. Fall Open Enrollment now occurs earlier, from October 15 to December 7 of every year.
- Review your Annual Notice of Change (ANOC).
- Help is out there.
- The best way to enroll in a new plan is to call 800-MEDICARE.
- If you are unsatisfied with the Medicare Advantage plan, you can disenroll from that plan and join Original Medicare during the Medicare Advantage Disenrollment Period (MADP).
- Understand Medicare’s new coverage of preventive services and know how your plan will cover those services.
Learn more about Fall Open Enrollment at www.medicareinteractive.org.
Recent deficit-reduction proposals that rely on private health plans to drive down costs would end Medicare as we know it and raise costs for beneficiaries, according to Medicare Rights Center President Joe Baker. Mr. Baker was featured this week in a Kaiser Health News article that examined a Medicare proposal from Republican presidential candidate Mitt Romney.
Read the article.