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From the category archives: healthcare

Obamacare Court Ruling Is Good News for Medicare Too

You could literally hear the collective sigh of relief today as millions of Americans whose healthcare was in jeopardy found out today they can keep their coverage through Obamacare.  Today’s Supreme Court decision upholding federal exchange subsidies is also good news for millions of seniors in Medicare who stand to lose billions in new benefits if healthcare reform is dismantled. 

As we have said for years now, seniors in Medicare need the Affordable Care Act.  Today’s Supreme Court ruling helps preserve this vital reform.

"Today’s Supreme Court decision impacts so many more Americans than just those in federal health exchanges created by Obamacare.  Thankfully, the Court’s ruling today preserves the many benefits and savings that Americans have received through the Affordable Care Act and avoids the damage that could have been done to our entire American health care system.

Seniors in Medicare have a stake in this debate as they will save, on average, about $5,000 over the next 10 years due to lower drug costs, preventive services with no out-of-pocket cost and reductions in the growth of health spending.  Since passage of Obamacare, more than 8.2 million people with Medicare saved over $11.5 billion on prescription drugs.  These are real people who will face real threats to their health security if the quest to dismantle Obamacare is ever successful.  No doubt the enemies of health care reform will continue their zealous mission to roll back Obamacare’s successes but today we have reason to celebrate. Tomorrow we’ll resume our fight to ensure seniors continue to benefit from the enormous savings Obamacare provides them and their families.”...Max Richtman, NCPSSM President/CEO


Robbing Medicare to Pay for the Trade Deal

Chances are if you’re a regular reader of this blog, the last issue you’d expect to see us write about is the hotly-debated and barely understood TPP (Trans-Pacific Partnership) trade deal.  After all, keeping up with and explaining policy issues impacting Social Security, Medicare and Medicaid is complicated enough, so yes, we really didn’t plan on wading too deep into the trade deal.  (Although you can read NCPSSM’s take on TPP and drug prices here.)

Unfortunately, that changed this week with news that Congress (with the White House running silent) intends to cut $700 million from the Medicare program to pay for a slice of the trade package.  We talked to Michael Hiltzik the Los Angeles Times about this back-door attack on Medicare:  

“The plan on Capitol Hill is to move the Trade Assistance Program expansion in tandem with fast-track approval of the Trans-Pacific Partnership trade deal, possibly as early as this week. We explained earlier the dangers of the fast-track approval of this immense and largely secret trade deal. But the linkage with the assistance program adds a new layer of political connivance: Congressional Democrats demanded the expansion of the Trade Assistance Program, Congressional Republicans apparently found the money in Medicare, and the Obama White House, which should be howling in protest, has remained silent.

Medicare advocates have taken up the slack by raising the alarm. "To take this cut and apply it to something completely unrelated sets a terrible precedent," Max Richtman, head of the National Committee to Preserve Social Security and Medicare, told me. 

The Medicare raid was so stealthy that critics in Congress, including members of the Congressional Progressive Caucus, are just now gearing up to oppose it. "It was sort of buried" in the bill, Rep. Keith Ellison (D-Minn.), the caucus co-chair, told me Monday.”

Funding the Trade Assistance Program is necessary to help Americans workers expected to lose their jobs because of this trade deal receive job training and assistance.  However, telling American workers they have to trade away health care benefits in their retirement in order to get job training when they lose their job now is incredibly mercenary, even by Washington standards.

This isn’t the first time Medicare has been Congress’ piggy bank. This move follows last year’s vote to extend the Medicare sequester cuts into 2024 to cover a reversal of cost-of-living cuts to veterans' pension benefits.  Shifting Medicare funds to other programs seems to be Congress’ new go-to budget approach.  That’s pretty ironic given that the GOP has spent millions of campaign dollars claiming Obamacare cut Medicare benefits (which is didn’t):

“This is different from the $700-billion cost reduction in Medicare enacted via the Affordable Care Act. That includes efforts to make the program more efficient by improving the incentives governing how doctors and hospitals deliver care to their patients, along with reductions in payments to Medicare Advantage plans. Richtman points out that much of this amounts to a reallocation within Medicare -- "it's piled back into the program by paying for improvements in preventive care, closing the 'doughnut' hole in Medicare Part D (the prescription drug benefit)" and other measures. In the broadest sense, the cost reductions in Medicare are netted against other healthcare costs within the Affordable Care Act.

By contrast, the new proposal would take $700 million out of Medicare, period. Nothing in the TAA will help Medicare function better, augment its services to members, or cover healthcare costs. Slicing into physician and hospital reimbursements may have the opposite effect, by reducing members' access to care. "I'd characterize this as money stolen from Medicare," Richtman says.”

We recommend you read Michael Hiltzik’s entire story at the Los Angeles Times

Congress Trades Bad Deal for Doctors for Bad Deal for Seniors in Medicare

The House has passed the so-called "doc fix" legislation replacing the flawed reimbursement formula Congress itself created years ago to cut pay to doctors in Medicare.  The formula has never worked and Congress has had to vote to replace it year after year.  We've supported the permanent replacement of this flawed formula and still do.  Unfortunately, the legislation that passed the House today merely trades one bad deal for another.  And this time it's seniors who take the hit. 

 “Contrary to claims by supporters, on both sides of the aisle, this ‘doc fix’ does not impact only ‘wealthy seniors’. Millions of beneficiaries who depend on a Medigap plan to help pay their health care bills – no matter their income -- will be hit with higher costs. Given that 46% of all Medigap policy holders had incomes of $30,000 or less, it’s clear this deal impacts far more than the wealthy, as the bill’s proponents have claimed.  What’s more, Medicare beneficiaries will be forced to contribute nearly $60 billion in premiums over the next decade to replace the SGR.

No doubt, we’ll hear today that this ‘compromise’ Medicare doc-fix plan must be a success because there are concessions from all sides.  Unfortunately, that political trope is just as flawed as the SGR itself because it ignores the financial reality facing Medicare beneficiaries just as the SGR ignored the reality facing doctors. Trading a bad deal for doctors for a bad deal for seniors is not a legislative victory and it is a surprising move from some in Congress who have previously vowed to protect Medicare from cuts and seniors from cost-shifting.

 It’s no surprise that anti-“entitlement” lobbyists on Capitol Hill and their allies in Congress are celebrating this deal for the benefit cuts they know will ‘grow like an avalanche over time’.  That avalanche will be headed straight for American retirees, current and future, as Congress continues to push Medicare down the slippery slope of means testing, raising costs for more and more seniors, including the middle-class.”...Max Richtman, NCPSSM President/CEO

When “Don’t Cut Medicare” Really Means “Protect Private Insurers’ Profits”

The annual lobbying extravaganza by the multi-billion dollar private insurance industry which sells Medicare Advantage plans to seniors, will enter a new phase tomorrow when the Centers for Medicare and Medicaid Services announces it’s 2016 rate schedule.  Lobbyists (America’s Health Insurance Plans alone spent nearly $5 million in just six months last year) have been in hyper-drive convincing Washington that trimming their billions of dollars in federal subsidies is the same as cutting seniors’ Medicare benefits.  It’s not.  But all that lobbying has paid off so far because not only have the proposed single-digit cuts been avoided; they’ve been replaced with rate increases:

“The Obama administration turned a proposed 1.9 percent cut to 2015 Medicare Advantage health plans into a .4 percent increase after heavy lobbying from insurers and the Hill. It was the second-straight year that the Medicare agency transformed a proposed rate cut into a raise.  Still, Medicare Advantage enrollment has grown every year since the ACA passed in 2010. In fact, enrollment has increased more than 9 percent each year since 2012, when the ACA’s cuts to the Medicare Advantage started to take effect.  The law is supposed to cut payments by $156 billion over 10 years because the program has historically reimbursed private insurers at a higher rate than the traditional Medicare program. Private plans are reimbursed at 106 percent of the traditional program, and Obamacare aims to close this gap.”  Washington Post

Except that gap will never be closed as long as the powerful insurance industry is allowed to pretend that a 1.9% cut in their federal overpayment is unreasonable to ask from  companies with financial reports like these: 

“Revenues at Humana for 2014 climbed 17.4% year over year to $48.5 billion. Meanwhile, reported premiums and services revenues increased 9.2% to $3.1 billion, primarily on the back of an increase in average group Medicare Advantage membership.” 

UnitedHealth Group’s full year 2014 revenues of $130.5 billion grew $8 billion or 7 percent year-over-year. UnitedHealthcare growth was led by strength in the public and senior sector.”

Let’s not forget that these giveaways to private insurers, covering just one-third of Medicare beneficiaries, are being paid for by taxpayers and the majority of seniors who don’t even participate in a private MA plan. The fact that these subsidies exist is terrible public policy.  The fact they continue to be protected by lawmakers is indefensible.  Especially when you consider the mounting evidence that the only advantage to Medicare Advantage plans is to the $884 billion dollar a year health insurance industry. 

Reports of Medicare Advantage fraud continue to surface.  Whistleblowers (including a former Bush administration official) have filed more than a half-dozen federal court cases detailing systemic over-billing by private Medicare Advantage insurance companies.

The Center for Public Integrity has investigated MA plans in depth.  It reports CMS officials acknowledge billions of dollars have been improperly paid to private MA plans due to a practice called “upcoding” in which insurers exaggerate how sick their patients are to increase their “risk score” and collect higher Medicare reimbursements. Some of CPI’s other findings include:

  • Risk score errors triggered nearly $70 billion in “improper” payments to Medicare Advantage plans from 2008 through 2013 — mostly overbillings, according to government estimates. 
  • Risk scores of Medicare Advantage patients rose sharply in plans in at least 1,000 counties nationwide between 2007 and 2011, boosting taxpayer costs by more than $36 billion over estimated costs for caring for patients in standard Medicare.
  • In more than 200 of these counties, the cost of some Medicare Advantage plans was at least 25 percent higher than the cost of providing standard Medicare coverage.
  • In 2012, CMS audits of six plans found that private insurers couldn’t justify payments for 40 percent or more of their patients. Those overpayments alone cost the Medicare program nearly $650 million in 2007.  That’s just for six plans for one year.
  • The Government Accountability Office reports Medicare Advantage plans collected $3 - $5 billion in “excess payments” over just two years (2010-2012) because of private insurers “upcoding.”
  • A new Government Accountability Office investigation is now underway continuing its look into MA “upcoding” fraud which, by some estimates, has provided an $70 billion dollars of improper payments to private insurance companies.

This is just the fiscal side of what the privatization of Medicare has meant.  Now let’s consider what beneficiaries in Medicare Advantage plans have faced.  Unfortunately, that news is also disheartening.

  • The Center for Medicare Advocacy reports there is evidence that private insurers are “cherry picking” healthier seniors for their plans to keep costs down (and profits high.)  “A recently released CMS report confirms advocates’ fears by concluding that disenrollment by individuals from MA plans back to traditional Medicare ‘continues to occur disproportionately among high-cost beneficiaries, raising concerns about care experiences among sicker enrollees and increased costs to Medicare.’”
  • The Kaiser Family Foundation says that “Since 2012 average out-of-pocket spending limits have been on the rise, which could expose a subset of enrollees to higher costs – mainly those who have significant medical needs.” Again, that means older and sicker seniors.
  • These rising premiums are confirmed by the industry itself in a survey distributed to lawmakers.  Incredibly, the insurance lobby uses their premium hikes as justification for Congress to protect private insurers’ massive subsidies.   

“The sickest patients who need the most care have seen their maximum annual out-of-pocket costs increase by as much as $761 since 2012, according to the study, which was conducted by the actuarial firm Milliman for the Better Medicare Alliance advocacy group. The value of extra benefits that the health plans provide fell by a national average of $180.24 from 2012 to 2015.”  Congressional Quarterly

It’s hard to imagine how our political leaders can justify preserving federal over payments to private insurers in Medicare with a track record that looks like this. However, if early media reports are correct that’s exactly what’s likely to be announced tomorrow – federal subsidies to one of the wealthiest industries in America’s will be preserved while taxpayers and seniors in Medicare will continue to foot the bill.

What ACA Repeal Means for Seniors

House Republicans have voted more than 50 times to rollback or fully repeal the Affordable Care Act.  They did it again yesterday. While it feels like Bill Murray’s movie “Groundhog Day” it’s not even close to funny for the millions of Americans this repeal would hurt.  

 

Seniors have probably been the most demagogued group when it comes to what the ACA actually means to their health care. Remember those fake “death panels” you were assured were a part of health care reform?  They weren’t.  The ACA also didn’t “destroy Medicare” as promised by opponents.  Quite to the contrary, seniors in Medicare have benefitted from a number of important improvements since its passage.  This success is exactly why the conservatives in Washington remain desperate to repeal health care reform before evidence of the ACA’s success can no longer be buried in a mountain of their false claims and political hysteria.

 

Medicare beneficiaries will save, on average, $5,000 over the next ten years thanks to health care reform provisions. Here are just a few of the real-life benefits millions of seniors in Medicare would lose immediately if Republicans have their way and repeal the Affordable Care Act.  You can see even more in our NCPSSM brief.  

 

  • No out-of-pocket costs for preventive services like colorectal and mammogram screenings and annual wellness visits 
  • 50% discount for brand name drugs purchased while in the Part D donut hole, leading to the closure of the donut hole entirely 
  • $700 in covered drug costs for the average senior would be lost and the sickest seniors would face $3,600 in additional out-of-pocket costs
  • Reduction of billions in overpayments to private insurers in Medicare and a new requirement that 85% of every dollar is spent on healthcare rather than costs/profits 
  • $200 per year in premiums and $200 in out-of-pocket costs to be saved by seniors by the year 2018 
  • $350 million in fraud-fighting investment 
  • Medicare Trust Fund will lose years of solvency

 

Of course, seniors in Medicare aren’t the only ones this repeal would hurt.  Here’s a list of what losing the Affordable Care Act means for Americans of every age.
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