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Welcome to MEDICARE WATCH, a biweekly electronic newsletter of the Medicare
Rights Center
Vol. 11, No. 3: February 5, 2008
Contents:
1. FAST FACT
2. BUSH PROPOSES $178.2 BILLION IN MEDICARE CUTS
3. SENATE PANEL INVESTIGATES MEDICARE PRIVATE PLANS
4. STUDY: COPAYMENTS LIMIT ACCESS TO ROUTINE MAMMOGRAMS
5. CASE FLASH: LOW-INCOME PROGRAMS AND PRIVATE PLANS
________________________________
1. FAST FACT
Americans spent nearly $500 billion on the 10 most expensive illnesses in 2005,
according to recent study by Agency for Healthcare Research and Quality. The
costliest set of illnesses-heart conditions-cost the nation $76 billion ("Big
Money: Cost of 10 Most Expensive Health Conditions Near $500 Billion
<http://www.kintera.org/TR.asp?a=fjIUI4PMJiKUIkI&s=doLDKQOuH9LDKUOHF&m=hhKVL8OLLoJ4G>
," ARHQ, January 23, 2008).
2. BUSH PROPOSES $178.2 BILLION IN MEDICARE CUTS
President Bush unveiled a budget proposal yesterday that slashes Medicare
spending by $178.2 billion over the next five years largely by imposing a
three-year freeze on payments to hospitals, nursing homes and other health care
providers and phasing out special funding to hospitals that care for the
uninsured.
However, payment rates for insurance companies that offer Medicare private
health plans, which cost taxpayers 13 percent more than coverage under Original
Medicare, would remain untouched under the president's budget. Health and Human
Services Secretary Mike Leavitt defended the administration's decision to
protect the plans at a press conference, claiming that private plans are "a
part of the future that will bring Medicare into a place where it can be
sustainable."
Leavitt asserted that Medicare spending had reached "emergency levels" and
warned that the benefit would not be available to future generations unless
immediate cuts were made. Kerry Weems, acting administrator of the Centers for
Medicare & Medicaid Services (CMS), noted that the Part A trust fund, which is
funded by dedicated payroll taxes and pays for Medicare hospital care, is
projected by CMS actuaries to become insolvent in 2019. CMS actuaries estimate
that eliminating overpayments to Medicare private health plans will extend the
solvency of the trust fund by two years, to 2021.
The administration's budget plan received a cool reception on Capitol Hill.
According to John Spratt, Democrat of South Carolina, this is because "most of
these cuts affect critical needs," and as a result, "are unlikely to generate
sufficient support to become law."
3. SENATE PANEL INVESTIGATES MEDICARE PRIVATE PLANS
Private-Fee-for-Service (PFFS) plans, Medicare private health plans that
operate without provider networks, were the focus of criticism from providers,
counselors and health policy experts at a Senate Finance Committee hearing last
week.
In recent years enrollment has surged in PFFS plans, which allow enrollees to
visit any doctor who agrees to the plans' terms and conditions but have no
minimum network of providers. The plans cost taxpayers on average 17 percent
more than the cost of care under Original Medicare, Mark Miller, executive
director of the Medicare Payment Advisory Commission (MedPAC), told the
committee.
Miller also expressed concerns over lenient federal standards regulating the
quality of care provided by PFFS plans. Currently, PFFS plans are the only type
of Medicare private plan not statutorily required to provide federal agencies
with data on the quality of coverage provided to enrollees.
Providers at the hearing disclosed that they are increasingly severing their
financial relationships to the plans. Dr. Albert Fisk, medical director of the
Everett Clinic in Washington State, testified his clinic had given its 21,000
patients with Medicare 14 months' notice that it would no longer accept
coverage provided by PFFS plans. Dr. Fisk attributed the change to PFFS plans'
refusal to negotiate "acceptable [reimbursement] rates" with the clinic that
compensate doctors for providing coordinated care.
Elyse Politi, a health care counselor for Virginia's State Health Insurance
Assistance Program, testified that the benefit plans and lack of provider
networks can lead to problems for people with Medicare who enroll in the plans.
"People who gave up their Medigap policies suddenly had to pay these large,
unexpected costs out of their own pocket," Politi testified. "Other people find
out that a health care provider will not accept their PFFS plan just as they
are scheduled to receive a needed health care service."
Politi recommended that Congress provide for standardized benefit packages for
Medicare private health plans, require PFFS plans to have a minimum network of
providers and exercise tighter control over marketing activities by insurance
agents selling these plans.
4. STUDY: COPAYMENTS LIMIT ACCESS TO ROUTINE MAMMOGRAMS
Women in Medicare private plans are less likely to receive routine mammograms
if their plans charge copayments for preventive screenings, according to a
study recently published in The New England Journal of Medicine.
>From 2001 to 2005, a Brown University-based research team followed 366,000
>women in their mid- to late-60s who were enrolled in Medicare private plans.
>Seventy-eight percent of participants in plans without copayments received
>mammograms, compared to 69 percent of women in plans that charged copayments
>ranging from $12.50 to $35 for preventive screening.
The percentage of women in plans with copayments who received mammograms
decreased by 5.5 percent during the course of the study. Women in plans without
copayments saw a 3 percent increase in mammography usage over the four-year
investigation.
Researchers also found that low-income and minority women were more likely to
enroll in plans with preventive mammography copayments. As a result, the effect
of cost-sharing on low-income and minority populations was "magnified,"
according to the study.
The research team concluded that the data justifies eliminating copayments for
certain preventive services under private plans and Original Medicare. Original
Medicare currently charges a 20 percent coinsurance for routine mammograms,
which would have been eliminated under the Children's Health and Medicare
Protection (CHAMP) Act of 2007. The CHAMP Act passed the House, but not the
Senate. Head researcher Dr. Amal Trivedi explained that at least for
mammography, "exempting elderly adults from cost-sharing may be warranted."
5. CASE FLASH: LOW-INCOME PROGRAMS AND PRIVATE PLANS
This January, Mr. B spoke with an insurance agent about a Medicare private
health plan. Mr. B had been having trouble paying his monthly Part B (medical
insurance) premium and his monthly Part D (prescription drug insurance)
premium. The insurance agent told Mr. B that if he joined this particular plan,
he would be eligible for a program that would eliminate his monthly Part B
premium, would pay for his Part D monthly premium, and reduce his prescription
drug copayments dramatically.
Mr. B called the Medicare Rights Center to ask about his Medicare health plan
options and if the private health plan was too good to be true. The hotline
counselor asked Mr. B about his monthly income and his assets, and determined
that Mr. B was eligible for a Medicare Savings Program (MSP). The counselor
explained that an MSP is a government program that pays the Medicare Part B
premiums for individuals with low incomes.
If you enroll in an MSP, you are also automatically enrolled in Extra Help, a
federal program that helps people with low incomes pay their Medicare drug
coverage premiums and out-of-pocket costs. Everyone who meets the eligibility
guidelines for an MSP or Extra Help is entitled to this assistance, not just
people who are in particular plans.
The counselor said that if the insurance agent had told Mr. B that these
programs would only be available him if he joined the plan, he should call the
Health and Human Services Office of Inspector General's TIPS Hotline at
800-HHS-TIPS to report the deceptive marketing.
Mr. B decided to stay in Original Medicare and apply for an MSP. The hotline
counselor directed Mr. B to his local Department of Social Services where he
could apply.
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Medicare Watch is MRC's fortnightly newsletter, established to strengthen
communication with national and community-based organizations and professional
agencies about current Medicare policy and consumer issues. Each edition
contains news of recent policy developments affecting Medicare and health care
generally and a case story from our hotline that illustrates steps
professionals can take to get older adults and people with disabilities the
health care they need.
The Medicare Rights Center (MRC) is the largest independent source of Medicare
information and assistance in the United States. Founded in 1989, MRC helps
older adults and people with disabilities get good, affordable health care.
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