Your Weekly Medicare Consumer Advocacy Update
What Are Accountable Care Organizations?
Medicare Accountable Care Organizations Explained in New Kaiser Article
According to a recent Kaiser Health News article, an Accountable Care Organization (ACO) is “a network of doctors and hospitals that shares financial and medical responsibility for providing coordinated care to patients in hopes of limiting unnecessary spending.” This means that providers team up to provide higher quality care to patients while limiting their costs. If an ACO successfully reduces costs, it is eligible to share in some of the savings. Both hospitals and doctors can participate in an ACO. However, primary care doctors are a required component, while hospitals are optional.
Due to Affordable Care Act incentives to form ACOs, about 4 million Medicare beneficiaries are now being served by ACOs. However, since the ACOs mostly affect providers and how they are paid, many beneficiaries may not even be aware that they are receiving their care from an ACO. Unlike many private insurance companies – such as HMOs – ACOs allow beneficiaries to go outside of the network to receive care. Additionally, ACOs must meet a variety of quality measures to ensure they are not saving money by refusing medically necessary care.
While ACOs have been fairly successful in generating savings in their first year, only a little over a quarter have created enough savings to qualify to keep some of them. According to another article on ACOs in the Journal of the American Medical Association (JAMA), this may largely be due to the fact that Medicare beneficiaries have no incentive to stay within the ACO network. This lack of consistency makes it especially difficult for the ACO to coordinate care in a manner that limits costs. The JAMA article suggests that ACOs and the regulations for ACOs will need to continue to evolve to increase and continue on the care model’s success.
New Data Shows Retiree Health Care Costs Exceeding Average Social Security Benefits
According to a recent article in Investment News, a new Retirement Health Care Cost Index released by HealthView Services shows that Social Security benefits for middle-income retirees are on track to be surpassed by the retirees’ average health care costs. The index looks at the percentage of Social Security benefits needed to pay health care costs for a healthy couple in retirement who receives average Social Security benefits. According to the analysis, retirement health care costs will increase from 69% of Social Security benefits for a couple retiring in 2015 to 98% for a couple retiring in 10 years—those retiring 20 years from now will need 127% of the average Social Security benefit to pay for their heath care costs.
To calculate the total cost of health care in retirement, the index includes all Medicare Part B, Part D and Medigap premiums, as well as out-of-pocket costs such as co-pays, the portion of a service that the beneficiary must pay. The index also uses $1,294 in today’s dollars as the average amount of Social Security benefits per month. According to the data, an average healthy couple retiring next year will spend about $366,600 during their retirement—in 10 years that number will increase to about $421,000 for newly retired couples. Meanwhile, estimated health care cost inflation is set at 5 percent to 7 percent per year, while the annual cost of living increase in Social Security benefits is expected to increase by 2 percent per year.
Rising costs in the Medicare program have been slowing over the past few years; however, there is still much that needs to be done. While many in Congress propose to cut costs in Medicare by shifting the health care cost-burden onto people with Medicare, this data shows that the average retiree cannot afford to pay more. In the fact sheet, Build on What Works: Medicare Cost Savers, The Medicare Rights Center lists some positive steps that can be taken to further reduce health care costs in Medicare, including restoring Medicare drug rebates, scaling back wasteful overpayments to Medicare Advantage plans, and advancing the delivery and payment system innovations of the Affordable Care Act.
Volume 5, Issue 16
Medicare will cover emergency ambulance services if:
- It is medically necessary, meaning that an ambulance is the only safe way to transport you and the reason for your trip is to receive a service that you need and Medicare will cover;
- You are transported to and from certain locations, such as a hospital; and
- The supplier meets Medicare ambulance requirements.
An emergency is when your health is in serious danger and every second counts to prevent your health from getting worse. If the trip is scheduled as a way to transport you from one location to another when your health is not in immediate danger, it is not considered an emergency.
If you have Original Medicare, it will pay for 80% of its approved amount for the ambulance service. You or your supplemental insurance policy will be responsible for the remaining 20%. If you have a Medicare Advantage plan, contact your plan to find out its specific ambulance costs.
This week the Medicare Rights Center released the newly redesigned Medicare Interactive (www.medicareinteractive.org), an online compendium of Medicare answers, presented in a searchable, consumer-friendly format. This redesign makes it easier for beneficiaries, professionals, and others to find answers to Medicare questions. It also puts the most relevant information front and center, including the website’s newest tool: Medicare Roadmaps, which are easy-to-use decision tools that help users navigate Medicare.
Last year, the site received over 1,000,000 visits, a 40 percent increase over the previous year. With the launch of the new redesign, the website is now better than ever.