The currently rec-listed diary, BREAKING WaPo says Obama's budget makes a $634B health care reserve w update talks about the proposed changes for health care. In the update, the girl wonders if the changes for Medicare (proposed cuts) could be a bad thing - and several people in comments note that there should be an "opt in" option for Medicare.
I wrote a few comments there, but decided to write a diary because we are about to have a big discussion/debate about health care changes this year, and I think people need to know more about Medicare so they know how to process the proposed changes, cuts, etc.
Tons of information can be found here: Medicare.gov
If you are 65 or older, or disabled, you are undoubtedly familiar with the website, but if you aren't familiar (even if you're not of Medicare age), I would recommend familiarizing yourselves with it because you'll be more informed to make your own plans for retirement, AND because you'll be able to help people you know who are ON Medicare.
First things first, the proposed cuts. We don't have a ton of detail right now, but here's what we do have:
Medicare cuts, tax hike on wealthy to pay for healthcare plan
Obama's plan would trim $316 billion over 10 years from Medicare by decreasing some payments to private insurance plans that focus on the elderly. Other proposals include charging upper-income beneficiaries a higher premium for Medicare's prescription drug coverage, added during the Bush administration
The healthcare proposal would also limit tax deductions for upper-income individuals and families, raising about $318 billion over 10 years.
Let me say first, these are great suggestions. This will save money and prevent wasteful spending and it will very likely help bring doctors BACK to Medicare.
Medicare Advantage plans are private insurance plans - people pay the premiums for Part B to Medicare and then they pay another premium for the MA plan on top of that (usually). Medicare pays each MA plan (for each beneficiary) over $600 per month for their care. In other words, Medicare is subsidizing private insurance companies to provide services to beneficiaries (which would have been cheaper and easier to obtain IF the beneficiary had just gone through original Medicare).
MA plans suck. They are bleeding the system of money and they provide little help to people unless they live in incredibly high population areas for the elderly and in states that have very good laws regulating insurance industry (New York, California, Florida, and Illinois have some decent MA plans that do help people get good coverage, but the vast majority of people end up being screwed over by their MA plan through denial of coverage OR through lack of options for local doctors and hospitals).
Here are a few articles about this:
Pressure builds for further slashes to Medicare Advantage spending
Private fee-for-service plans on average will be paid 118% of standard fee-for-service rates this year, and all Medicare Advantage plans will be paid an average of 114%, the Medicare Payment Advisory Commission reported in December 2008. The add-ons were designed years ago to attract more insurers and to provide more benefits for seniors who opt in.
Another GAO report released earlier in the month found that Medicare Advantage plans made roughly $1.3 billion more in profits in 2006 than expected.
The latest GAO finding that many private fee-for-service enrollees may be on the hook for higher cost-sharing levels if they don't follow special prior authorization rules unique to PFFS gave more ammunition to lawmakers trying to cut the plans down to size.
How are they making so much profit? Well, beneficiaries are paying them extra in fees AND on top of that, Medicare is paying them $600/month. Better be able to read the fine print and know your insurance coverage VERY thoroughly, or prepare to be charged extra fees along the way. And heaven forbid the ambulance takes you to a hospital that doesn't accept your plan - you'll be a LOT more as a result.
Elderly Found to Face Surprise Fees in Medicare Plans (Update2)
Insurers collected $100 billion in U.S. government payments this year for Advantage coverage. In 2009, the U.S. will pay all Advantage plans 14 percent more than it costs to cover beneficiaries through the traditional government Medicare program, according to figures presented at the Medicare Payment Advisory Commission this month. The panel is an independent agency created by Congress.
These extra services they are talking about? Some plans provide vision and dental coverage. What kind of vision and dental coverage? Usually no more than one pair of glasses OR contacts and 2 teeth cleanings per year and one set of dental x-rays per year. Yeah - not much extra coverage when you consider the extra hidden costs they are paying.
Second issue - the higher costs for wealthier beneficiaries.
At the moment, the wealthiest beneficiaries pay higher premiums to Part B, but not to drug plans. They can afford more, why not spread the wealth and help the entire system function better - especially if that helps bring down the cost of the donut hole? Or it enables us to eliminate the donut hole altogether? (By the way, if you're from Iowa and you aren't aware - Chuck Grassley is SOLELY responsible for adding the donut hole. Spread the word to everyone you know about that and stop voting for this joker.)
There are a few other ways I would improve Medicare through the budget, but overall, they do a pretty decent job. There IS a lot of Medicare fraud and I think that the system they have in place to hold providers accountable for that fraud doesn't work quickly enough in order to be as effective as it could be. I would actually add some funds for fraud - or restructure the process to make it more effective. Here's an example of the fraud I'm talking about. Changes have been made since 2003 to reduce fraud, but there are other improvements that could be made.
Other than that - these changes to Medicare will actually help most beneficiaries and will make the entire system function more smoothly.
At the moment people have to call around to find out if the doctor or hospital accepts the MA plan they have. Most doctors participate in Medicare - or would if the MA plans didn't exist anymore. Many doctors are getting more money from MA plans and are choosing that coverage over Medicare.
The other suggestion mentioned throughout comments of that rec-listed diary was an "opt-in" option for Medicare. To those making that suggestion, I have one question: Do you have any idea what Medicare costs?
Here's a rundown:
Part A premiums - over $400/month unless you qualify to get it for free because you've worked over 40 quarters in your lifetime.
Part B premiums - $96.40/month (unless you qualify for the highest level of Medicaid and then Medicaid pays for you).
Part D premiums and copays - average premium is $28/month. Copays vary, but the donut hole is HUGE and most don't qualify for extra help. You have to make less than $16,000/yr individually or $22,000/yr if married to qualify for extra help.
Yearly deductible for Part B - $135.00
Yearly deductible for Part D - varies, but the standard is $295.00
Deductible for Part A - $1069 per benefit period. Benefit period is defined as starting the day you enter the hospital and ending 60 days after you have been discharged from the hospital. So, you could have up to 5 benefit periods each year.
Copayments -
Part B is 80%-20% of the Medicare approved amount. Every visit to the doctor costs SOME money. It may not be a ton of money, but it adds up.
Durable Medical Equipment is 80%-20% - anyone need a motorized wheelchair? Have a few hundred bucks to pay for it? And there's a lot of equipment that isn't covered by Medicare at all, or has limits on it (diabetic testing strips, for instance) - those are out of pocket costs you have to add in.
Most beneficiaries buy Medigap policies which pick up these extra costs, but then they are paying 3 premiums per month -
Part B - $96.40
Part D - avg. $28
Medigap - can vary in cost from $80-$500 per month - depending on when you sign up for the policy and how much extra coverage you are buying.
Now, I think there are ways we could do an opt-in - perhaps if employers who don't offer health insurance could provide people an opt-in option for Medicare - and they could withhold the premiums tax free or they could contribute a percentage (although, if they aren't offering health care already, maybe they can't afford that). There are definitely some options and it's worth looking at to see if it's possible, but to consider this the best option for people?
And finally, if you are unlucky enough to get into a plan that doesn't provide the coverage you need - you are very likely stuck for the whole year whether you like it or not. Most people need to wait for an enrollment period to switch plans (drug plans or Medicare Advantage plans) - so you could end up paying extra costs for a whole year after you find that the plan is not working for you. There are some exceptions - special enrollment periods, but you can't count on those and there are a lot of rules to follow.
Wondering how the elderly deal with all this information? Me too. A lot of people need our help, but the best thing you can do now is inform yourself for your own future, or your parents' future. It's also incredibly useful to know a lot about Medicare because it helps you disarm Republican talking points. There are a lot of lies out there - if you're armed with the information, you can fight back. And of course, if you want to discuss/debate the upcoming changes to health care - knowing all you can about how Medicare works and what the problems are, but also what the problems aren't - is very important.