We are still awaiting the CBO's scoring of the bill which came out of the Senate majority leader's closed door discussions. Similar to the "bill" sent to the CBO by the Senate Finance Committee, it is still in the conceptual stage and has yet to be officially written.
On the other hand, the bills in the House were merged to form H.R. 3962, the Affordable Health Care for America Act, which was released October 29th. As mentioned in the analysis of the Baucus Bill, H.R. 3962 does not include fixing the physician reimbursement rate (Medicare SGR). While it claims to save the federal government $104 billion, it leaves in place the 21% SGR cut scheduled for 2010, and makes no further provisions to fix the formula. This is clearly unsustainable, as providers will have no choice but to opt out of the program, leaving seniors without care.
Interestingly a separate bill, H.R.3961, the Medicare Physician Payment Reform Act of 2009, was introduced the same day. It restructures the SGR formula, increasing physician payments for Medicare, Medicare Advantage and TRICARE. One quarter of that increase would come from premium increases paid by Medicare Part B enrollees. Ultimately, this bill is estimated to increase the direct spending of the Federal government by $210 billion over the 2010-2019 period.
According to the numbering system, it seems the Medicare Physician Payment Reform Bill was introduced first. It seems someone in the House was aware of the SGR problem. Since this wasn't an afterthought, wouldn't it have been logical to have “fixed” the problem in the comprehensive bill before introducing it? After all, for months politicians have been insisting that we must have ONE bill to reform healthcare. But without the "fix," House politicians could and did proceed to hold press conferences, claiming victory and “savings” for the American people all the while putting us $100+ billion further in debt. This behavior is disrespectful of the hardworking Americans who voted them into office and it does nothing to increase sustainability or affordability.
Showing posts with label Medicare Advantage. Show all posts
Showing posts with label Medicare Advantage. Show all posts
Thursday, November 5, 2009
Monday, November 2, 2009
Medicare, Medicare Supplemental & Medicare Advantage: Part III - Who enrolls in what plan?
A 2005 report by Emory University researchers and commissioned by the Blue Cross Blue Shield Association of America found the following:
Of eligible retirees, 18% percent only have Medicare coverage. It is important to note that 49% of African-Americans and 31% of Hispanics and 33% of Whites fall into this category. Over 30% of retirees have primary or supplemental coverage through employer or union retirement plans. Another 25% of those who are Medicare eligible purchase MedSup (Medigap) policies on their own. Another 13% are Medicare beneficiaries who are also on Medicaid or other public assistance plans. Medicare Advantage covers 13% of retirees (Today, this represents 10 million people.)
Of retirees without employer/union plans or Medicaid, 53% of Hispanics, 40% of African- Americans and 33% of whites are enrolled in Medicare Advantage plans.
Medicare Advantage plans are required to offer at minimum the same benefits as traditional Medicare. Many offer more coverage, including vision, dental and drug benefits. As a result, those with lower incomes (<$20,000) are quick to see the value in joining such programs. In fact, 18% of Medicaid eligible retirees join a Medicare Advantage program instead of Medicaid. [One wonders if this is because of the challenges in signing up for public assistance or because Medicare Advantage is preferred.] It was determined that Medicare Advantage plans provided a $1,128 per person savings to the state and federal government over Medicaid. According to the study, if Medicare Advantage was ended, 39% would join a MedSup plan. Another 39% would be left with only basic Medicare and 22% would join Medicaid. As discussed in the October 29th post, Congress is subsidizing benefits for Medicare Advantage enrollees. Poor and minority groups are disproportionately affected if these are eliminated. Since Medicare Advantage is more cost-efficient than Medicaid and has a 90+% satisfaction rate, perhaps there ought to be some means testing to qualify for these private sector programs. From a cost standpoint, perhaps would it be reasonable for government to encourage elderly Medicaid enrollees, in geographic areas where plans exist, to enroll in Medicaid Advantage programs.
Of eligible retirees, 18% percent only have Medicare coverage. It is important to note that 49% of African-Americans and 31% of Hispanics and 33% of Whites fall into this category. Over 30% of retirees have primary or supplemental coverage through employer or union retirement plans. Another 25% of those who are Medicare eligible purchase MedSup (Medigap) policies on their own. Another 13% are Medicare beneficiaries who are also on Medicaid or other public assistance plans. Medicare Advantage covers 13% of retirees (Today, this represents 10 million people.)
Of retirees without employer/union plans or Medicaid, 53% of Hispanics, 40% of African- Americans and 33% of whites are enrolled in Medicare Advantage plans.
Medicare Advantage plans are required to offer at minimum the same benefits as traditional Medicare. Many offer more coverage, including vision, dental and drug benefits. As a result, those with lower incomes (<$20,000) are quick to see the value in joining such programs. In fact, 18% of Medicaid eligible retirees join a Medicare Advantage program instead of Medicaid. [One wonders if this is because of the challenges in signing up for public assistance or because Medicare Advantage is preferred.] It was determined that Medicare Advantage plans provided a $1,128 per person savings to the state and federal government over Medicaid. According to the study, if Medicare Advantage was ended, 39% would join a MedSup plan. Another 39% would be left with only basic Medicare and 22% would join Medicaid. As discussed in the October 29th post, Congress is subsidizing benefits for Medicare Advantage enrollees. Poor and minority groups are disproportionately affected if these are eliminated. Since Medicare Advantage is more cost-efficient than Medicaid and has a 90+% satisfaction rate, perhaps there ought to be some means testing to qualify for these private sector programs. From a cost standpoint, perhaps would it be reasonable for government to encourage elderly Medicaid enrollees, in geographic areas where plans exist, to enroll in Medicaid Advantage programs.
Thursday, October 29, 2009
Medicare, Medicare Supplemental & Medicare Advantage: Part II
Congress is planning on making big cuts to the Medicare Advantage program claiming that it is subsidizing the private insurers for this program. Is this true? The answer is yes, it is subsidizing the health plan; but it is really subsidizing the beneficiaries, not the insurers. People saw value and as a result the number of people in these plans has grown. The payments/expenditures for beneficiaries are higher on average than traditional Medicare.
The reason lies in how Medicare Advantage plans are paid. The Medicare Modernization act of 2003 set into place the present system of payment. A private insurer places a bid for what price per person it is willing to offer Part A and Part B services in a given geographic area. If it is under the government’s benchmark rate that it is willing to pay in that geographic area, they split the difference. Under the rules, the government keeps 25% of the savings, and the insurer must provide the beneficiary with additional benefits or a rebate equivalent to 75% of the difference. For example, if Medicare is willing to pay $500 per person per month to the insurer and the insurer has bid $400 per person per month, there is a $100 difference. Of that amount $25 in savings goes back to the government and $75 goes to the beneficiary in the form of a Part B or D premium rebate or additional services. Medicare pays out $475 in benefits. As you can see, the amount of additional benefits or rebates enrollees are offered makes one plan more attractive than another.
The heart of the problem is the benchmark rate calculation. By law, it must be at least as high as high as what the government would pay on average per person in the traditional Medicare fee for service (FFS) arena. Remember, Medicare pays 80% of the allowable payment rates. There are risk adjustments fir areas of the country where patients are “sicker.”
According to the Congressional Budget Office, for 2007 the “benchmarks are 17% higher, on average than projected per capita FFS expenditures nationwide.” [Note: This CBO report was released in 2007, yet proposals to fix the problem are just now coming forth.]
These benchmarks are determined by statutory rules. It requires an act of Congress to make any changes. This is the similar to the way the Medicare physician payment formula [SGR] is set. Do you see a pattern here? There is a problem anytime an act of Congress is required to make should be a common sense business decision - namely to fix the formula. Government bureaucracy seems to preclude it from making the necessary adaptations to respond in a timely manner to save money or prevent potential disruptions in service.
The next question is what will happen to current Medicare Advantage enrollees? Who will be most affected? We will try to tackle that tomorrow -
The reason lies in how Medicare Advantage plans are paid. The Medicare Modernization act of 2003 set into place the present system of payment. A private insurer places a bid for what price per person it is willing to offer Part A and Part B services in a given geographic area. If it is under the government’s benchmark rate that it is willing to pay in that geographic area, they split the difference. Under the rules, the government keeps 25% of the savings, and the insurer must provide the beneficiary with additional benefits or a rebate equivalent to 75% of the difference. For example, if Medicare is willing to pay $500 per person per month to the insurer and the insurer has bid $400 per person per month, there is a $100 difference. Of that amount $25 in savings goes back to the government and $75 goes to the beneficiary in the form of a Part B or D premium rebate or additional services. Medicare pays out $475 in benefits. As you can see, the amount of additional benefits or rebates enrollees are offered makes one plan more attractive than another.
The heart of the problem is the benchmark rate calculation. By law, it must be at least as high as high as what the government would pay on average per person in the traditional Medicare fee for service (FFS) arena. Remember, Medicare pays 80% of the allowable payment rates. There are risk adjustments fir areas of the country where patients are “sicker.”
According to the Congressional Budget Office, for 2007 the “benchmarks are 17% higher, on average than projected per capita FFS expenditures nationwide.” [Note: This CBO report was released in 2007, yet proposals to fix the problem are just now coming forth.]
These benchmarks are determined by statutory rules. It requires an act of Congress to make any changes. This is the similar to the way the Medicare physician payment formula [SGR] is set. Do you see a pattern here? There is a problem anytime an act of Congress is required to make should be a common sense business decision - namely to fix the formula. Government bureaucracy seems to preclude it from making the necessary adaptations to respond in a timely manner to save money or prevent potential disruptions in service.
The next question is what will happen to current Medicare Advantage enrollees? Who will be most affected? We will try to tackle that tomorrow -
Monday, October 26, 2009
Medicare, Medicare Supplemental and Medicare Advantage: Part I
What’s the difference?
Traditional Medicare covers 80% of allowable medical expenses for the elderly. In general, it covers hospitalizations (Part A) for free for those over the age of 65 who are also eligible for social security. The elderly who want part B coverage, which covers things like doctor visits, labs, etc., must pay monthly premiums which are deducted from the social security checks. Since it does not cover all medical expenses, many enrollees also buy a Medicare Supplemental [MedSup or Medigap] policy. There are about a dozen MedSup plan options from which to choose. Plan benefits are government-defined, but privately-insured. There is no medical underwriting for the plans, and thus, no pre-existing conditions. While there may be a dollar or two discount per month for enrollees who buy coverage through a union, trade organization or AARP, there is no need to join such an organization as the plan prices are competitive.
Medicare Advantage, previously known as Medicare+Choice or Part C, is a different animal. It was established by the Balanced Budget Act of 1997. People with Medicare A and B can choose to receive their Medicare healthcare services through an Advantage plan. It is a cheaper alternative that negates the need for a MedSup plan, as it provides many of the same benefits without having to buy additional coverage, and may also provide Part D coverage. Enrollees agree to receive their care through the plan’s network of providers. “Medicare Advantage plans include (1) Medicare Managed Care plans (like HMOs), (2) Medicare Preferred Provider Organization plans (PPOs), (3) Private Fee-for-Service plans(PFFS), and (4) Medicare Specialty plans (available in some areas to provide Medicare benefits for certain people with special needs, such as beneficiaries in institutions).” [SSA website]. It was supposedly an attempt to privatize Medicare. But since there are no specific eligibility requirements for this lower cost program, it is not too surprising that this program is growing in popularity, particularly the PFFS plans. Of the 45 million Medicare recipients, 9 million are Medicare Advantage members.
Congress has Medicare Advantage, in particular, in its sites to cut costs. Tomorrow we will look at why.
Traditional Medicare covers 80% of allowable medical expenses for the elderly. In general, it covers hospitalizations (Part A) for free for those over the age of 65 who are also eligible for social security. The elderly who want part B coverage, which covers things like doctor visits, labs, etc., must pay monthly premiums which are deducted from the social security checks. Since it does not cover all medical expenses, many enrollees also buy a Medicare Supplemental [MedSup or Medigap] policy. There are about a dozen MedSup plan options from which to choose. Plan benefits are government-defined, but privately-insured. There is no medical underwriting for the plans, and thus, no pre-existing conditions. While there may be a dollar or two discount per month for enrollees who buy coverage through a union, trade organization or AARP, there is no need to join such an organization as the plan prices are competitive.
Medicare Advantage, previously known as Medicare+Choice or Part C, is a different animal. It was established by the Balanced Budget Act of 1997. People with Medicare A and B can choose to receive their Medicare healthcare services through an Advantage plan. It is a cheaper alternative that negates the need for a MedSup plan, as it provides many of the same benefits without having to buy additional coverage, and may also provide Part D coverage. Enrollees agree to receive their care through the plan’s network of providers. “Medicare Advantage plans include (1) Medicare Managed Care plans (like HMOs), (2) Medicare Preferred Provider Organization plans (PPOs), (3) Private Fee-for-Service plans(PFFS), and (4) Medicare Specialty plans (available in some areas to provide Medicare benefits for certain people with special needs, such as beneficiaries in institutions).” [SSA website]. It was supposedly an attempt to privatize Medicare. But since there are no specific eligibility requirements for this lower cost program, it is not too surprising that this program is growing in popularity, particularly the PFFS plans. Of the 45 million Medicare recipients, 9 million are Medicare Advantage members.
Congress has Medicare Advantage, in particular, in its sites to cut costs. Tomorrow we will look at why.
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