Medicare Watch

New Proposal May Mean Higher Costs for Medicare Beneficiaries

Today, Senator Ron Wyden and Representative Paul Ryan introduced a new proposal that would convert Medicare into a premium support, or voucher, program. However, many of the details of the proposal remain unclear. Though the Wyden-Ryan plan purports to preserve some form of Original Medicare, it would require people to pay the difference in cost between the coverage they want and what essentially is a fixed-amount voucher. In addition, under this proposal, global Medicare funding would be capped. When costs exceed that cap, the program’s funding would be cut to meet the cap, which could lead to deep cuts to Medicare providers or even higher costs for beneficiaries. Wyden and Ryan propose setting the cap at no higher than one percentage point above the Gross Domestic Product (GDP). This cap would be lower than not only the historic rate of Medicare growth, but also the rate of cost growth in the health care sector overall.

While the intention of voucher proposals is to cut the amount that the government spends on Medicare, these plans do so by increasing the out-of-pocket responsibilities of individual beneficiaries. Analyses of similar plans, such as that coauthored by Alice Rivlin and former Senator Peter Domenici, have found that although Original Medicare might remain an option for health coverage, costs for beneficiaries would still rise significantly. People with Medicare are in a poor position to pay more for their health care; half of all Medicare beneficiaries have annual incomes below $22,000, and those with Medicare already pay 15 percent of their incomes on average for health care. Under plans like the Wyden-Ryan proposal, private plans might also be able to insure only the healthiest individuals, making it more difficult for sicker Medicare beneficiaries to find cost-effective coverage.

Read Medicare Rights Center President Joe Baker’s statement on the Ryan-Wyden Medicare Proposal.

Read the Center on Budget and Policy Priorities’ paper “Converting Medicare to Premium Support Would Likely Lead to a Two-Tier Health Care System.”

Congress Must Act to Prevent Medicare Physician Cuts, but Not at the Expense of Medicare Beneficiaries

The future of extensions to various Medicare programs, including the Qualifying Individual (QI) benefit, the therapy caps exceptions process, and a potential 27.4 percent cut to Medicare physician payments, remains uncertain. While the House of Representatives passed a bill this week that would prevent Medicare physician cuts, and extend the QI benefit and therapy caps exceptions process with modifications, the bill also contained controversial policies that would pay for such extensions by passing greater costs to Medicare beneficiaries. Specifically, the bill would further means-test Medicare Part B and D premiums, which are used to pay for outpatient and prescription drug coverage, respectively. Medicare beneficiaries with annual incomes of $85,000 or more currently pay higher premiums, and this legislation would extend those increased premium responsibilities to those who earn at least $80,000 each year. In addition, the bill would increase the premium amount for individuals who are charged income-related premiums. Lastly, the income threshold would be frozen until at least 25 percent of all Medicare beneficiaries fall into the category of having to pay higher premiums. Over time, this policy will likely affect individuals with more moderate incomes, increasing the cost of their health care.

In addition, the bill attempts to cut funding for and repeal sections of the Affordable Care Act (ACA). For instance, it would reduce funding for the Prevention and Public Health Fund by 68 percent. The Fund was created by the ACA to reduce the occurrence of chronic illnesses such as diabetes and heart disease.

Senate leaders are currently in negotiations over how best to prevent the cut in physician payments and extend other important programs for people with Medicare.

Contact your senators to tell them to preserve Medicare. (Click here to find your senators’ names and contact information.)

Read last week’s Medicare Watch for talking points on extending Medicare programs while preventing increased costs for people with Medicare.

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

 

Medicare Reminder

If you have Original Medicare, Part B covers 100 percent of the cost of a pneumonia vaccine with no copay or deductible, as long as you see a doctor or other health care provider who takes assignment. This is also true if you receive your Medicare benefits through a Medicare Advantage plan (private health plan). In addition, you cannot be required to get a referral for the vaccine. However, your private plan may require that you use an in-network provider. You should call your plan to find out what rules apply.

In most cases, you will need a pneumonia vaccine only once in your lifetime. However, Medicare may cover 100 percent of the cost of the vaccine once every five years for people who are considered at high risk for pneumonia.

Learn more about pneumonia vaccines at www.medicareinteractive.org.

Spotlight

AARP, the Center for Medicare Advocacy, and the Medicare Rights Center recently published an advertisement in newspapers throughout Washington, DC, urging Congress to prevent a 27.4 percent cut to Medicare doctor payments that will otherwise go into effect at the end of this year. Preventing the cut would ensure that Medicare beneficiaries continue to have access to the doctors they trust. However, in preventing cuts, Congress must not shift costs to beneficiaries by, for instance, further means-testing monthly premiums for the program.

See the advertisement here.