Medicare Watch

The Myth of the $247 Medicare Part B Premium

With all of the information available to people with Medicare, it can be difficult to separate fact from fiction. Recently, Medicare beneficiaries have contacted the Medicare Rights Center with concerns about an e-mail circulating to the general public. This e-mail falsely claims that the Medicare Part B premium will increase to $247 in 2014 as a result of the Affordable Care Act (ACA).

The amount of the Part B premium is calculated each year based on health care costs from the previous year. For most individuals, the government pays 75 percent of this calculated premium, while beneficiaries are responsible for 25 percent. The aforementioned email suggests that the ACA universally and dramatically increases premiums for all Medicare beneficiaries, an indisputably false claim. In fact, one of the potential effects of the ACA, which does not alter the long-established formula used to calculate Part B premiums, may be to slow the growth rate of these premiums over time. Health reform intends to decrease fraud, waste and abuse, and drive down health care costs through delivery system reforms, such as preventing unnecessary hospital readmissions. Because the Part B premium is calculated based on health care costs, a decrease in the growth rate of these overall expenses will result in a similar slower growth rate for Part B premium costs.

One change that the ACA has implemented affects the premium amounts paid by Medicare beneficiaries who have annual incomes over $85,000. A law passed well before the ACA requires that these individuals pay a greater share of the Part B premium. The higher a beneficiary’s income, the more that individual pays in monthly premium costs. Currently, only about five percent of those with Medicare are responsible for a higher premium. The ACA builds on this existing law by freezing the current income thresholds for higher-income Medicare beneficiaries through 2019. As a result, an estimated 14 percent of people with Medicare will be responsible for a premium surcharge by that date. However, the majority of Medicare beneficiaries are unaffected by this provision.

Read AARP’s article, “Myth of the $247 Medicare Part B Premium.”

Read more about means-tested Part B premiums.

Read Kaiser Family Foundation’s report, “Income-Relating Medicare Part B and Part D Premiums: How Many Medicare Beneficiaries Will Be Affected?”

CBO Report Examines Proposals to Raise Medicare Eligibility Age

Raising the Medicare eligibility age from 65 to 67 would increase out-of-pocket costs for affected populations, according to a new report released this week by the Congressional Budget Office (CBO). The issue brief, “Raising the Ages of Eligibility for Medicare and Social Security,” discusses the impact on individuals and the federal budget of changing the ages of eligibility for both programs. Policymakers have discussed raising the Medicare eligibility age in negotiations on deficit reduction. According to the CBO, increasing the Medicare eligibility age to 67 would save the federal government approximately $148 billion, but these savings would come at a price, by mostly shifting costs to individuals and employers. Overall savings might also be undermined, because in restricting Medicare eligibility, costs would increase for other government health programs that would then be responsible for providing coverage to this population.

The report assumes full implementation of the Affordable Care Act (ACA). It states that while a change in the eligibility age would result in an increased number of uninsured people between the ages of 65 and 67, that number would be small due to the advent of expanded Medicaid and health plans offered through state Exchanges beginning in 2014. However, even with implementation of the ACA, individuals may face higher premiums and other out-of-pocket costs if they are enrolled in a plan offered through an Exchange rather than in Medicare. These expenses would depend on the Exchange subsidy for which individuals qualify. In addition, the CBO brief states that if the ACA is not fully implemented, the number of individuals that would be uninsured would increase.

The CBO report does not discuss the effect of raising the eligibility age on individuals who do not yet have Medicare. According to a report released by the Kaiser Family Foundation in July 2011, these individuals might pay increased premiums, because of the introduction of a population into health insurance risk pools that consists of comparably higher users of health care. The CBO report also does not address the effect of changing the eligibility age on employers. For example, Medicare pays primary to small employers’ and retiree insurance coverage. In other words, Medicare pays first for all services, and small employer or retiree coverage only supplements Medicare coverage. If the Medicare eligibility age were to increase from 65 to 67, small businesses and businesses that offer retiree coverage would face increased health care expenses, as they would be responsible for providing primary coverage to this population.

Read the CBO report, “Raising the Ages of Eligibility for Medicare and Social Security.”

Read the Kaiser Family Foundation report, “Raising the Age of Medicare Eligibility: A Fresh Look Following Implementation of Health Reform.”

Medicare Reminder

Over the past several months, the Centers for Medicare and Medicaid Services (CMS) has added five new preventive benefits to its roster of free services for Medicare beneficiaries. The new preventive services include:

• Annual depression screening for all Medicare beneficiaries;
• Intensive obesity screening and behavioral counseling to help Medicare beneficiaries who are obese lose weight and sustain weight loss through proper diet and exercise;
• Annual cardiovascular screening, which gives primary care providers the opportunity to screen for high blood pressure, provide counseling around maintaining a healthy diet, and when appropriate, recommend taking aspirin;
• Annual alcohol misuse screening for all Medicare beneficiaries, as well as counseling sessions forindividuals found to be misusing alcohol; and
• STD/STI screening for Medicare beneficiaries who have certain risk factors.

As a result of the Affordable Care Act, if you have Original Medicare, you will not pay a coinsurance or deductible for these preventive services, as long as you see a doctor who takes assignment. If you receive your Medicare benefits through a Medicare private health plan, also known as a Medicare Advantage plan, you will also pay no out-of-pocket costs. Your private plan may, however, require that you use an in-network provider. Cost-sharing may apply if your doctor makes a diagnosis during a service or performs additional tests or procedures.

Read Medicare Rights’ press release about the five new preventive benefits available at no cost to Medicare beneficiaries in 2012.

Learn more about Medicare preventive services, including those free benefits added in 2011, at www.medicareinteractive.org.

Spotlight

The United States Government Accountability Office (GAO) recently released a report analyzing Medicare beneficiaries’ ability to access Medicare Part D vaccinations, such as those for shingles and tetanus/diphtheria. The report identifies factors that contribute to the low percentage of Medicare beneficiaries who access these vaccinations under Part D, including the scarcity of physicians and pharmacies that stock the shingles vaccine, the difficulty beneficiaries have affording cost-sharing requirements, and administrative challenges related to being reimbursed consistently by Part D private plans.

Read the GAO’s report, “Many Factors, Including Administrative Challenges, Affect Access to Part D Vaccinations”.