Category: Medicare

A Win for Health Insurers

And also for seniors. Sarah Kliff reports:

The Obama administration reversed a proposed 2.3 percent pay cut for private Medicare plans, replacing it with a 3.3 percent raise…

Wait, how exactly does a pay cut become a pay raise? When I asked Medicare acting administrator Marilyn Tavenner about the proposed pay cut, back in February, she said it was due to a slowdown in Medicare cost growths…

Medicare costs haven’t changed in the past two months — but two other things did.

First, political pressure ratcheted up. As my colleague Sandhya Somashekar reports, over 100 legislators pushed Medicare to reverse the cuts. America’s Health Insurance Plans, which lobbies for the industry, aired television ads titled “Drastic” and “Too Much.”

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Apr 02, 2013 | 9 comments | by

Socking It to the Poor

On February 15, the Centers for Medicare and Medicaid Services announced its intention to reduce payments to Medicare Advantage (MA) plans by 7 to 8 percent in 2014…

More than 14 million beneficiaries enrolled in MA plans will be affected in some way by this cut. Low-income beneficiaries have the most to lose. According to America’s Health Insurance Plans, the insurance industry trade association, 41 percent of MA enrollees in 2011 had incomes of $20,000 or less. Medicare Advantage is attractive to those with low incomes because private plans offer a better deal.

Joseph Antos at RealClearMarkets.

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Mar 14, 2013 | 12 comments | by

Goldhill: Medicare Is the Problem, Not the Solution

In 10 years, the number of CT and MRI scans per beneficiary more than doubled; hip replacements increased by 36 percent between 1997 and 2007. One out of three Medicare beneficiaries now has at least one surgery in the year of his or her death; even 20 percent of 90-year-olds do! The average 75-year-old is on five prescription drugs. Here’s a fact you rarely hear about Medicare: Annual spending just on those in excellent or very good health was an astonishing $5,437 per person in 2008.

View entire editorial in the Washington Post.

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Mar 12, 2013 | 16 comments | by

Administration Cuts Medicare Plans; Stock Prices Plunge

Sarah Kliff on the stock market response:

Aetna, Humana, Cigna and WellPoint all saw a big drop off between Friday and this morning.

So, what happened? In a nutshell: Late Friday afternoon, right after the market closed, the federal government cut Medicare Advantage reimbursement rates way more than anyone expected.

The change amounts, according to Wall Street analysts, to a pay cut of about 7 to 8 percent in 2014.

Avik Roy on the impact:

Because the typical for-profit managed care plan targets profit margins of only 5 percent, and non-profits even less, the net consequence would “turn almost every plan in the industry unprofitable,” according to [Citi managed care analyst Carl] McDonald…

Richard Foster, the recently-retired chief actuary of the Medicare program, has projected that Obamacare’s cuts to Medicare Advantage would force half of its current enrollees to switch back to the old, 1965-vintage Medicare program. Robert Book and James Capretta estimate that this will cost enrollees an average of $3,714 in 2017 alone.

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Feb 20, 2013 | 5 comments | by

Oops. Competition Works Here, Too

Historically, the government has effectively set prices through Medicare for wheelchairs, hospital beds and other medical equipment. But a demonstration project begun in 2011 introduced competitive bidding in roughly 100 metropolitan areas to see if market forces could bring down prices. The results have been dramatic. Prices for oxygen equipment went down 41 percent; wheelchairs, 36 percent; hospital beds, 44 percent; and the cost of diabetic testing equipment, like glucose strips, dropped by a whopping 72 percent. And research has shown no adverse effects on beneficiaries.

Ezekiel Emanuel in the NYT.

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Feb 18, 2013 | 3 comments | by

Competition Works – At Least for Drugs

Last week, the Congressional Budget Office (CBO) released its annual updated projections for the entire federal budget, including health programs. And, in those projections, CBO dropped the projected ten-year cost for Medicare quite substantially—by $137 billion. The reason? Buried deep in the CBO report there’s this explanation: “the largest downward revision in the current baseline is for spending for Medicare’s Part D (prescription drugs).”

That’s an understatement. Of the $137 billion drop in the Medicare baseline, $104 billion—or 75 percent—was due to the drop in expected Medicare drug benefit spending. This is truly remarkable because CBO had already lowered the drug benefit baseline several times in the preceding years. With this latest revision, CBO’s part D projections bear almost no resemblance to what was expected to occur when the law was enacted in 2003….

And this is occurring in a program run entirely through private insurance plans competing with each other for enrollment among Medicare beneficiaries…. Those plans are offering seniors low-premium products with strong incentives for generic substitution, and—surprise, surprise—seniors are readily taking them up on the offer. It turns out that Medicare beneficiaries are just as eager to save on their monthly insurance premiums as everyone else in America. It’s just that this is the first time in the history of Medicare that they have been given the opportunity to cut their expenses by signing up with lower-cost options.

Jim Capretta.

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Feb 18, 2013 | 7 comments | by

Is President Obama Breaking the Medicare Law?

On the Medicare funding issue, federal law requires that if the program’s funding becomes imbalanced, its trustees are required to issue a warning, and the president is required to send Congress a plan to repair the finances.

Then-President George W. Bush did just that during his time in the White House, but Mr. Obama has never filed the submission.

“The administration has failed each of the last four years to response to these funding warnings despite receiving several communications from Congress urging them to comply,” eight Republicans on the Senate Budget Committee said in a letter to the White House.

Washington Times.

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Feb 04, 2013 | 6 comments | by

The Cost of Dying

The average individual in Medicare spent $38,688 [out-of-pocket] in their last five years of life. The average couple spent $51,030 in the five years before one spouse died. But spending wasn’t evenly distributed. For individuals, the median amount spent was $22,885, but the 90th percentile spent was $89,106. That means that ten percent of people had to spend more than $89,000 out of their own pockets. For couples, the median was $39,759, and the 90th percentile was $94,823.

Aaron Carroll commentary. Study.

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Feb 01, 2013 | 12 comments | by

Kaiser: Medicare Reform Ideas

There are 150 cost-cutting ideas, totaling $9.4 trillion in spending cuts over the next decade. Find them here, “Policy Options to Sustain Medicare for the Future,” summarized by Timothy Taylor:

  1. Raise the age of Medicare eligibility from 65 to 67 ($113 billion over 10 years)
  2. 10% coinsurance payment on all home health episodes ($40 billion over 10 years)
  3. Restrict first-dollar Medigap coverage ($53 billion over 10 years)
  4. Increasing premiums for Part B and Part D: for example, raise Part B premiums by 2% per year until they cover 35% of total Part B expenses ($231 billion over 10 years)
  5. Increase Medicare payroll tax by 1 percentage point for all workers ($651 billion over 10 years)
    Read More » »

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Jan 31, 2013 | 12 comments | by

Medicare to Punish Most Doctors for Not Practicing Medicine the Way It Thinks They Should

More than 80 percent of Medicare providers will face penalties for failing to meet quality thresholds if current performance trends continue, according to a new study…

The requirements encourage doctors to improve patient care by following evidence-based clinical procedures, such as administering aspirin to someone suffering a heart attack or ordering a tuberculosis screening for rheumatoid arthritis patients.

Source: The Hill.

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Jan 10, 2013 | 6 comments | by
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