They Call It Healthcare Reform

They call it healthcare reform, but under the new law some   Medicare  beneficiaries and providers will cover more of the costs. So, it’s not really cost reform; it’s cost reallocation? Well maybe it’s a little of both.

 Medicare  has been around since 1965, about 46 years, providing access to healthcare for seniors age 65 and older. If you thought the program had been around longer-it hasn’t. It’s a fairly modern answer to one of society’s big challenges, how to provide quality healthcare for everyone. And the U.S. is a little late coming to the table when it comes to establishing broad health benefits for its citizens.

Today,  Medicare  covers about 47 million Americans, making it the nation’s largest  health  insurance program. So, the way  Medicare  operates has a significant impact on the country’s healthcare. And on our pocketbooks. In fact, according to the Center for  Medicare  and Medicaid Services, one in every five dollars spent on  health  services in 2008 were spent through  Medicare .

Since its enactment, spending on  Medicare  has grown to be a larger and larger share of the U.S. federal budget and gross domestic product (GDP). And a larger share of consumer spending. The trend is expected to continue as prices for health services continue to rise, the number and complexity of services increases, and the number of enrollees goes way up as the population ages.

That’s why there’s a big push for continuing retirement healthcare reform. The Patient Protection and Affordable Care Act (ACA) implemented in 2010 is expected to reduce overall spending on  Medicare . But where will those savings come from and who will pay?

Under the new law,  Medicare  savings are expected to come from reduced annual fee-for-service payments to providers, changes to payments for  Medicare  Advantage plans, reduced payments for preventable hospital readmissions and home  health  services.

Beginning in 2015, there will be a 15-member Independent Payment Advisory Board (IPAB) charged with recommending  Medicare  program changes if spending growth exceeds specific limits. To give that group some clout, a supermajority vote will be required by Congress to override the Board’s recommendations. We know-there is a lot of concern about this panel setting policy without public input. But as it stands, this group could very well find ways to reduce  Medicare  spending by continuing to push more costs to enrollees and providers.

And under the new law there will be more enrollees who fit the high-earner income levels requiring them to pay higher premiums for  Medicare  Part B (physician service). That’s because the law temporarily eliminates the annual inflation adjustment for income levels, freezing them at 2010 levels until 2019. So, the income thresholds for higher Part B and Part D premiums are now fixed at $85,000 for an individual and $170,000 for couples through 2019.

Then there are incentive plans intended to improve the quality and coordination of care, produce efficiencies and, ultimately, program savings. And if you’ve been to a hospital lately, you know firsthand the need for improvement. What we wouldn’t do for better communication among providers, and between providers and patients. And whether you were the patient or a visitor, you can’t help but long for better quality care. Let’s face it, if you end up in the hospital today, you had better have an advocate to help oversee your stay, or it’s very possible you will end up with an infection, won’t make a full recovery or could even become a statistic.

When it comes to possible efficiencies, just think about the hospital billing process. After a hospital stay, you get separate bills for doctor and hospital services. You may even get bills from doctors you didn’t even know treated you or what they treated you for. That bill may arrive months later. And there is really no way to verify that you received the service. Nor is there a way to challenge the amounts you’re being charged. Come on! Is it really $10 for an aspirin? Really? Can you say “simple fraud prevention?” Clearly, reforms are needed. The reality of a hospital stay doesn’t look anything like what you see on TV. And every business can find ways to implement best practices and become more efficient. It’s just a question of what should be changed and how it will be paid for until the associated savings are realized. Implementing efficiencies is one of the few areas where true cost savings are possible. But watch out for the tendency to cut costs by simply shifting them to the patient, doctor or back to  Medicare .

There are also provisions in the law that will increase  Medicare  spending, offsetting some of the planned program savings. For instance, the law phases in coverage that closes the Part D prescription drug gap (“doughnut hole”) by 2020. And there is an annual wellness visit and other improvements in coverage for preventative services. Providing those additional services may be important and may provide cost relief for recipients, but the coverage will certainly add costs to the  Medicare  program. So, here again the costs haven’t been eliminated; they’ve merely been shifted.

The law even includes provisions that produce revenue for  Medicare , including an increase in the  Medicare  payroll tax for high earners, those with incomes of $200,000 for an individual and $250,000 for a couple. And, there are new fees directed at drug and equipment manufacturers. Here again, no real cost elimination. The revenue inflow to  Medicare  will come from some beneficiaries, or vendors. It is certainly possible that both targets of cost increases can well afford to pay. But, more than likely when it comes to vendors, they’ll simply increase the prices they charge, and the costs will end up right back with  Medicare . Lots of energy expended to end up right back in the same place.

In addition to monthly premiums,  Medicare  enrollees contribute to the cost of care through deductibles and coinsurance. And, some healthcare services like vision, dental, hearing and long-term care aren’t covered by  Medicare , so you must either purchase separate insurance, pay for the services yourself or forego having that test or procedure. Here again, beneficiaries continue to shoulder the costs.

So, while overall the new law should save the  Medicare  program money, the impact on beneficiaries and vendors will vary. Those who use fewer health services will carry less of the financial burden. And, those with higher incomes will pay a bigger share for their benefits and a bigger share of their own and others’ expenses.

Because  Medicare  is such a large part of the federal budget, the program will undoubtedly be central to the deficit reduction conversation. And that may mean more change is coming.

Some proposals for additional reforms expand caps on  Medicare  spending growth, increase beneficiary contributions even further, delay the age of  Medicare  eligibility and expand the scope of the advisory Board. We can either, bite the bullet and pay more, find new sources of revenue to fund the program or overhaul these benefits completely. It’s a challenge with wide-reaching implications for the government, providers and beneficiaries.

And no matter which course is chosen, or which political party gets to set the course, it is very clear that someone will pay more.

For people 65 and older, get reliable information about  Medicare  and Medigap insurance, including help to compare prices of Medigap plans in your area.

Medicare Reimbursement Cuts – A Policy Perspective

This article will evaluate the challenges associated with  Medicare  reimbursement cuts. The amount of expenditure in this program has skyrocketed since its inception in 1965 despite various measures to control growth. Short-term legislative fixes have been buying time for the development of long-term solutions while various stakeholders stand to win and lose as they are faced with forthcoming reimbursement cuts. Among these stakeholders are the federal government, politicians, third-party payers,  Medicare  recipients, and healthcare providers. Foreseeable problems exist in implementing reimbursement cuts including barriers to patient care and the financial viability of healthcare providers who rely on  Medicare  patient revenues. Continual debate over short-term  Medicare  cuts will be eclipsed by policy changes related to the viability of the program and long-term sustainable healthcare funding and delivery systems.


Health care spending currently accounts for 16% of the gross domestic product of the United States (Getzen, 2007). New technology and higher incomes have increased overall healthcare spending and driven up costs. The question raised, is how  health  care expenditure will be controlled within government programs like  Medicare . The formation of  Medicare  and Medicaid by the Social Security Acts of 1965 established the government as a major payer in  health  care. Regular reimbursement through government funding allowed hospitals and other institutions to grow in size, capacity, and capital. Controlling growth and costs has become a major concern as proportional expenditure on healthcare has increased. Of the various cost-containing measures employed to control expenditure, reimbursement cuts are some of the most contentious issues.

Background and Significance

 Medicare  has evolved in numerous ways since its inception in 1965. Physicians were initially reimbursed by the program for services covered and were able to bill patients for non-covered costs. Hospital reimbursement methods also followed similar patterns until a change was made in 1983 from “reasonable cost” to the prospective payment system based on diagnostically-related groups. In 1992 the physician fee schedule replaced the charge-based system. The Sustainable Growth Rate (SGR) of 1998 was created to control spending even further. Annual targets for spending are established and physician payments are reduced if spending exceeds these limits.

The bulk of today’s  Medicare  costs are different than those of the past. A larger portion of expenditure is attributable to outpatient services covered by Part B of  Medicare . This expenditure has consistently exceeded the established formula as specified in the SGR. Forthcoming adjustments in the form of reimbursement cuts propose major problems for physicians receiving reimbursements for services rendered to their  Medicare  patients. “Whereas over the next several years the SGR formula will cut doctors’ reimbursement by an estimated 25 to 35 percent…[and] deep cuts in physician reimbursement will force many doctors out of the  Medicare  program and leave many patients without access to a physician (H.R. 863 IH, 2007).” These cuts will have a significant impact on physicians and hospitals, and may exacerbate healthcare access barriers to  Medicare  recipients. New reimbursement cuts are especially troubling in light of evidence that the expansion of  Medicare  reimbursements to new areas of care can benefit patient  health  (Gross et al., 2006). The types and amounts of cuts to be made are largely dependent on legislation and actions on Capitol Hill.


Legislative action on  Medicare  cuts is ongoing. A recent (February 14th, 2008) amendment was proposed in the House of Representatives to adjust conversion factors in Part B of title XVIII of the Social Security Act, increasing  Medicare  payments for physicians’ services through December 31, 2009. These adjustments are temporary fixes in the challenge to create long-term solutions: “The purpose of this Act is to allow adequate time for Congress to determine an appropriate long-term solution for  Medicare  physician reimbursement rates (H.R. 5445 IH, 2008).” Legislative fixes are influenced by the various groups that are potentially affected by these cuts. Language in these resolutions seems to indicate this. A resolution on December 11th, 2007 in the House expresses the sentiment “…that the  Medicare  physician payment system must be immediately reformed in a long-term manner in order to stabilize  Medicare  payment to doctors, return equity to the program, and ensure that  Medicare  patients have access to a doctor of their choice (H.R. 863 IH, 2007).” Congress is continuously tuning reimbursement-related legislation to slow uncontrolled growth while appeasing powerful constituencies and interest groups.

The executive branch also plays a major roll in the determination of alternate  Medicare  cuts. The Bush Administration recently proposed a measure to control the explosive growth in the program. On February 18th, 2008, “the Bush administration…submitted a measure to Congress to reduce  Medicare  spending by increasing prescription drug plan premiums for higher-income beneficiaries and by increasing the use of  health  information technology, such as electronic  health  records, among other provisions (Carey, 2008, p.1).” This move was triggered by a condition of the 2003  Medicare  law. When a financial warning is issued by  Medicare  trustees the administration is mandated to submit legislation reducing program spending or increasing revenue. “The warning is issued when trustees for two consecutive years predict that federal general fund revenue must be used to pay for 45% or more of total  Medicare  costs within seven years (Carey, 2008, p.1).” Monies required to pay for  Medicare  exceed allotted funds and the program’s encroachment on other fund sources is closely monitored.


Among the major stakeholders in this issue are the federal government, politicians, third-party payers,  Medicare  recipients, physicians and hospitals.

The federal government stands to win by moderating uncontrolled growth in the  Medicare  program. In recent years total expenditure and federal reimbursement has exceeded target rates. “By the 2000-2004 period, society was willing to devote over 20 percent of the cumulative increase in GDP and the cumulative increase in Federal outlays towards health care (Hartman, Smith, Heffler, & Freeland, 2006, p.41).” The growing size of  Medicare  threatens to encroach on other fund sources and programs. It is in the best interest of the federal government to reform  Medicare  and keep expenditure within manageable boundaries. Despite the benefits involved in implementing cuts, the types of cuts which are made have the potential for backlash. Cuts to reimbursements are exceptionally contentious in the healthcare community. The federal government must seek and implement responsible controls to mitigate harm while effectuating reform.

Politicians are another group affected by policies on reimbursement cuts. Their role is fairly complex as their duties and functions are reflective of the competing interests of different populations, groups, and political parties. Expenditure reduction and reimbursement cuts affect a wide range of constituents in different manners. The role of  Medicare  reimbursement cuts in political decision-making depends on how these groups are impacted. Politicians may win or lose depending on how the effects of these cuts unfold. The amount of healthcare lobbying that takes place on Capitol Hill speaks to the magnitude of interests involved.

Third party payers are heavily influenced by  Medicare  reimbursement methodologies.  Medicare  reimbursement cuts may likely equate to reimbursement cuts by other third-party payers, thus exacerbating many of the problems experienced by healthcare providers. Significant resentment already exists from problems associated with current reimbursements models and additional cuts may hurt payers in the short-run. In the long-run payers will benefit from moderated expenditure and more stable growth rates.

 Medicare  recipients are another prime group affected by cuts. A major concern associated with reimbursement cuts is the reduction of benefits and programs to these recipients. Technological advancement has provided patients with a vast array of services, procedures, and pharmaceuticals. Benefit and program cuts may translate into a reduction of these features which they have become reliant on. Reimbursement cuts may also contribute to barriers in accessing care. Lower reimbursements from  Medicare  may lead providers to be less inclined to accept new  Medicare  patients. Studies have already been conducted on barriers associated with general and specialized care related to payer type. In a study conducted on appointment setting for dermatology patients, “…some access limitations in hot spots where  Medicare  payments are low relative to commercial insurers suggest that patients in these areas may be most sensitive to further payment reductions (Resneck, Pletcher, & Lozano, 2004, p.85).” The case can be made that additional reimbursement cuts may further expand these “hot spots” for  Medicare  recipients. Additional barriers may emerge as the expected cuts related to the SGR come to fruition. In the short-term seniors stand to lose from reimbursement cuts but may benefit in the long-run from a more sustainable delivery system that can result from  Medicare  reform.

Physicians and hospitals stand to lose in the short-term. The healthcare community is at odds with current reimbursements models and believes that further cuts will significantly erode revenues. A study featured in Pain Physician acknowledges that “physicians in the United States have been affected by significant changes in the pattern[s] of medical practice…and escalating healthcare costs have focused concerns about the financial solvency of  Medicare  (Manchikanti & Giordano, 2007, p.607).” The payment rate cut which was released on July 12th, 2007 includes a 9.9% reduction. Many physician practices and hospitals will be drastically affected but may benefit in the long-run from programs that are moderated in growth and can remain solvent.

Implementation issues

Various groups are involved in seeking solutions to this problem including the  Medicare  Payment Advisory Commission (MedPAC), the Government Accountability Office, physician and hospital organizations, economists, and other interest groups. The U.S. Senate and House of Representatives are separately working on two different ways to alleviate the inconsistencies in costs and corresponding reimbursements while trying to establish long term sustainable solutions. One of the most significant implementation challenges is the financial fallout to providers relying on reimbursements (physicians, hospitals, and other affected providers).  Medicare  accounts for a sizeable portion of revenues to some  health  facilities and healthcare providers. Further reducing reimbursements for services will have a major financial impact and the healthcare community has been especially active in resisting additional cuts. Some of the most vocal groups have been providers and their affiliated interest groups. It is common to find multiple reimbursement-related articles in trade journals and specialty magazines. Certain specialties will be impacted more heavily than others and this is reflective in payment changes by CPT code.

Impact to  Medicare  recipients is another major implementation issue. Cost-containment may have negative effects on patient access to services and resulting health outcomes, though this is not generalizable across the board. At least one study has shown that health outcomes were not impacted for patients receiving treatment in hospitals affected by past reimbursement cuts (Volpp et al, 2005). Counterintuitive results from studies like this make implementation even more intricate and perplexing. Legislation must be drafted based on truly measurable effects to recipients, providers, and cost-containment goals.

Future direction

 Medicare  reimbursement reduction is a major policy issue affecting large strata of interests. Within government it is recognized that more time is required to generate sustainable strategies. Balancing long-term objectives with the immediate effects of cuts is a delicate matter. Policymakers will need to make difficult and calculated decisions about efforts to reduce healthcare spending. Some believe that a greater focus on preventive care has the potential to alleviate expenditure trends. A significant portion of current expenditure in  Medicare  and other programs comes from long-term maintenance of chronic conditions. This trend accounts for a large portion of uncontrolled growth.  Medicare  reimbursement cuts are merely stop-loss strategies in a losing equation rather than robust long-term solutions. A greater focus on preventive care has the potential to extend the viability of U.S. healthcare systems.

Medicare Vs Medicaid

Each time that you get a paycheck there is a small amount taken out for your Social security benefits. These payroll deductions pay for your federal Medicare health insurance benefits. When you retire from the workforce at age 65, or earlier due to a disability, your Medicare coverage begins. It also covers your children under the age of eighteen if you die before retirement. You will receive Medicare even if you are a millionaire provided you paid in enough quarters. It does not depend on your assets or income. Bill Gates will get his coverage.

Medicare coverage is not complete and there can be co-pays. Most retirees buy supplemental insurance for some of the services that the basic Medicare benefits do not provide. Medicare covers hospital stays and limited skilled nursing facilities under “Part A.” Doctors, outpatient care, and medical supplies are covered under “Part B.” The two biggest gaps in Medicare coverage are long term care and prescription drugs. You cannot double dip and if you collect coverage from another source, Medicare does have some reimbursement rights.

Some days I think that Congress named our two very different national health care programs “Medicare” and “Medicaid” just to confuse us.

Medicaid on the other hand is a welfare program that is not funded through Social Security. It comes from our general taxation with about half paid by each state and the balance paid for by Congress. Each state designs its own program. Medicaid covers many more services than Medicare and there are no co-pays. Medicaid covers hospitals, doctors, drugs, x-rays and long term nursing home care.

The key to be eligible for Medicaid is that you must be very poor. Your income and resources must be below a threshold set by the federal government and adjusted every year. You must also be able to prove that you are a U.S. citizen. Aliens cannot receive Medicaid benefits.

While Medicaid will cover long term nursing home care if your family member meets the Federal medical need guidelines, there are certain hooks. Medicaid can assert a payback lien against some future earnings, inheritances, gifts, lawsuit winnings and your estate. You will also be ineligible if you gave anything away during the five years before you apply. The period of time that you are ineligible is based on how much you gave away. Some transfers to spouses or disabled children are exempt from the penalty rules.

Surprisingly, Congress took some care not to impoverish a healthy spouse or disabled children who remain at home in the community. A home, a car and approximately $100,000 can be kept back for them when a disabled spouse goes to a nursing home. Congress also allows some limited asset protection planning and has sanctioned the use of “Special Needs Trusts” in a law called “OBRA 95.”

The rules are all laid out in 95,000 pages of books cutely called the “POMS.” You can read them all at It does help to have a little working knowledge of your family’s federal health benefits and the difference between Medicare and Medicaid. The rules cited in this article are very general and it is important to have exact guidance for each particular case.

Information on Medicare

At initial glimpse it may seem incredibly bewildering to figure out the differences among a number of  Medicare  plans and firms. There will in addition be differences in what is on offer in assorted counties in California. For you to make the appropriate decision then you must study as much info as you can on  Medicare  in California, only then will you be able to find the scheme that most suits your wishes. It is not the case that you must be over sixty five to meet the criteria for a  Medicare  plan, if you are under sixty five and regarded as permanently disabled then you are in addition qualified to go in for a scheme.

The coverage and costs vary with distinct sorts of schemes. Moreover reflect on that fees possibly will grow yearly, and advantages can be added or withdrawn. This is why it is important to keep in the know with the latest information on health insurance in California.

There are 4 aspects to  Medicare  and it is prudent to know the details of every one prior to enrolling.

Part A is referred to as hospital cover. It will insure the receiver for the bulk of in-patient hospital treatment, together with some forms of in patient home care and plus hospice treatment. To be entitled to this assistance devoid of footing a monthly fee, you will require to be holding 40 or more quarters of Social Security credits. If you possess less than this total, though more than thirty, then you can acquire  Medicare  Part A for a monthly fee of around $250.00. Individuals with lesser than thirty Social Security credits would have to pay $461.00 each month in 2010.

 Medicare  Part B includes  health  insurance relating to out patient costs. This contains doctor’s fees, laboratory tests, out patients hospital care, speech and physical therapy, ambulance transport, and certain medical equipment. This segment of the  Medicare  plan is optional. It is repeatedly the case that if you are still in employment then you may possibly by now have comparable schemes by way of a employer medical program so it may well not be considered necessary to sign up until you leave.

The rate of this premium is $110 in 2010, however in the order of 73 percent of  Medicare  holders will continue to pay the 2009 fee of ninety six dollars. This is for the reason that the individuals will not obtain a cost of living change in their 2010 Social Security benefits. Those who are new to  Medicare  will need to pay the complete 2010 amount as will persons who have a larger take-home pay.

It is important to realize that  Medicare  does not promise a wholly inclusive cover for all your medical connected circumstances. There will commonly be various reasonably substantial fees to pay beside deductibles and the expenditure of special services and objects. These include eyeglasses, hearing aids, dental care, as well as any form of long-term care be it in a private home or nursing home.

 Medicare  Part C is also referred to as  Medicare  Advantage. This is an choice to the original cost for service form of  Medicare . The  Medicare  program will pay for  Medicare  Advantage plans and will pay private medical cover firms to provide  health  cover to the beneficiaries of the schemes. To be qualified for a  Medicare  Advantage plan, you should be signed-up for both Part A and Part B of the  Medicare  plan. By choosing to register yourself for  Medicare  Part C you will still be entitled to all the benefits that are included in the complete  Medicare  scheme.

You will be offered the  Medicare  benefits through a certain private plan. These may possibly additionally incorporate insurance for the expenditure for prescribed medications, this will be referred to as a MA-PD program. If this isn’t the case then the plan would be deemed MA-only. The majority of  Medicare  Advantage plans will have amplified advantages over the first set up.

If you are opting for such a scheme then you need to examine the costs with care as lots may be more pricey for certain aspects. And numerous  Medicare  Advantage plans insist that you to only visit doctors or visit hospitals that are associated with their system. There are 5 separate  Medicare  Advantage plans:  Health  Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medical Savings Accounts.

Part D of  Medicare  in California is what’s more referred to as the MMA ( Medicare  Prescription Drug, Improvement, and Modernization Act). This is a form of prescribed drug coverage in which all  Medicare  receivers are qualified no importance what their fitness position or income. To be eligible for this kind of  Medicare , the person should sign up for a medication plan and contribute to the premiums and deductibles.

Overview Of Medicare Supplemental Insurance

The health of an individual is almost like the primary source of everything that he or she has. When your body is not functioning properly and you are suffering from various debilitating conditions, chances are you will not be able to carry out your work properly which will greatly affect your daily living. Because of this, it is a big must for you to get a partner which will be able to help you secure your health conditions. And one of these is the  Medicare  supplemental insurance (aka Medigap insurance).

A Quick Glimpse

 Medicare  supplemental insurance (aka Medigap insurance) is a kind of private insurance for  health  which is designed as a supplement for Original  Medicare . It is the one which is responsible for the payment of the costs of healthcare which is not being covered by  Medicare  such as the deductibles and copayments. Medigap plans are also going to cover some of the services which are not being covered by the Original  Medicare  insurance. In case that you have decided to enroll in  Medicare  while having the Medigap policy,  Medicare  will still be paying its share of the amount that they have approved for the costs of the healthcare that they cover. For the meantime, your policy is in Medigap will also be paying its share.

Every  Medicare  supplement insurance plan (aka Medigap insurance) is also expected to adhere to both Federal and State laws that are designed to protect the holders like you and it should be evidently identified as the “ Medicare  Supplement Insurance.” Insurance companies are only allowed to sell a plan that is standardized and identified with letters A to N. Every standardized and regulated policy must offer similar basic benefits, regardless of the insurance company selling it. Service and cost is the sole difference between the policies being sold by various insurance companies.

Buying  Medicare  Supplemental Insurance (aka Medigap Insurance)

As a whole, whenever you buy your Medigap policy, there is a minimum of two components in the policy,  Medicare  Part A, which is Hospital Insurance and the  Medicare  Part B, which is the Medical Insurance. If you decide to buy a medigap plan, you have to directly pay  Medicare  Part B’s monthly premium to  Medicare . Also, you have to pay another insurance premium to the corresponding company of private insurance which provides the  Medicare  supplemental insurance (aka Medigap insurance).

To clear some issues, Medigap policy does not have anything to do with the coverage that you can claim from your employer for this is not  Medicare  Part B,  Medicare  Advantage Plan and is not way connected to Medicaid. What is primarily does is to help you in closing the gaps with your deductibles in  Medicare . There are also policies that are providing extra benefits not being within the bounds of  Medicare  like at home recovery, prescription drugs and routine checkups.

Getting your own  Medicare  supplemental insurance (aka Medigap insurance) is a good way of assuring that you will be able to properly look into your  health  for you to be assured that you will have no difficulties in the near future.

Medicare Benefits Part 3 – Prescription Drugs and Private Insurance

 Medicare  is a heath insurance program that is funded by the United States Federal Government and provides a very noble service to many people who are older or suffer from disabilities. It was created in 1965 and is geared towards providing affordable medical care to people who may otherwise not be able to afford it.

 Medicare  is available for American citizens who are of at least 65 years of age or are disabled. In order to qualify for  Medicare  if you are under 65 years of age, you must have been on Social Security or received Railroad Retirement benefits for at least 2 years. In addition people with acute renal failure are also covered as are those with Lou Gehrig’s disease.

The benefits received by those on  Medicare  are divided into 4 different categories. This is the third and final article on  Medicare  benefits, so please check out my previous articles if you have not already done so for more information. This article covers Part C and Part D benefits.

In 1997, as part of the Balanced Budget Act of 1997, people who receive  Medicare  benefits were allowed to receive their benefits from private  health  insurance companies. These are Part C benefits. The insurance companies that offer these plans refer to them as  Medicare  Advantage Plans. The insurance companies are required to at least cover the same things that are covered under  Medicare , but can do so in different ways. For example if the insurance company does not offer the same hospital program, they can balance this out by offering lower co-pays on doctor visits. In some cases they use this to also offer dental insurance or other services that are not traditionally covered by  Medicare . It is very important for the consumer to completely read and understand the benefits derived from traditional  Medicare  and those provided by  Medicare  Advantage Plans before committing to either one. There are advantages to both that depend on your specific needs.

Traditionally  Medicare  only covered a few very specific types of prescription drugs, but this was changed with the advent of Part D of  Medicare  Benefits. This was because of the  Medicare  Prescription Drug, Improvement, and Modernization Act, which was signed into law by President Bush in 2003. This plan is different from the Part A and Part B benefits of  Medicare  because it is not standardized. This is because it is actually designed and administered by private insurance companies. This means they can pick and choose drugs or even whole categories of drugs to cover or not cover. This is with the exception of drugs that are specifically not covered by  Medicare , like cough suppressants and barbiturates. This amendment to the  Medicare  act has received a large amount of attention because, as it was presented by the Bush administration, it was originally supposed to only have a 10 year cost of $400 billion. Many of the senators that voted for it did so only because of this cost, but a month after the bill was passed, the actual cost was estimated to be more than $530 billion.

Both Part C and Part D benefits are relatively new, and as far as laws goes are still in their infancy. As they continue to develop it is likely they will change and transform into a more lean and scaled down model.

How To Compare Medicare Drug Plans

Are You Looking For The Best  Medicare  Part D Plan For You?

 Medicare  Part D provides drug coverage to millions of American senior citizens and disabled people. This is one of the newest  Medicare  benefits. There are many different drug plans on the market now. They are provided by private health insurance companies, but of course, are subsidized by federal tax money. Some of the basics are the same across all plans, but many things are also different.

With so many prescription plan choices, it can be hard fo beneficiaries to find the best one. Here are some things to consider.

  • Where do you live? Your own choices will be affected by the plans that are sold in your area. The convenience of actually getting prescriptions filled by a particular plan will also be a big factor for many older or disabled people.
  • What type of medicine do you need to take? Different plans cover prescription medicine in different ways. You want to maximize benefits that will help you save money on the drugs you need to take.
  • The monthly premium should also be considered. Premiums vary a lot.. I have seen some for less than $15 a month, while others may cost more than twice that much.

The monthly premium can be an important thing to think about for many people who must lived on a limited income. Cheaper plans can be very attractive. However, be wary because some low priced plans may be able to keep premiums low because of restrictions on covered drugs or covered drug stores.

Convenience Of Buying Prescriptions Under The Drug Plan

For example, some large chains have branded Part D plans. These plans are fairly cheap. But they restrict preferred coverage to their own pharmacies. If it is not convenient to pick up drugs at one of these stores, they may not really save money in the long run. Convenience is not a trivial matter to many seniors and disabled people who have trouble finding transportation. In some cases, it may be better to pay a little more for a plan that is more flexible.

Overall Out Of Pocket Drug Costs

The actual out of pocket drug costs, even with coverage, will probably be more important than the monthly premium. It would not make sense to save $10 a month on a drug plan premium, but then pay $50 a month more for prescriptions! It is also important to consider how much you will have to pay for your medicine every month.

How To Find The Right  Medicare  Drug Plan For You

If you are looking for a new Part D plan, or if you are helping somebody else look for one, there are some tools that can help you make a good choice.

The government has some handy online tools at  Medicare .gov. You can enter your zip code, some of the basic information about the drugs you take every month, and then compare local plans.

Some people would rather talk to or email a local agent. You can find some online  health  quote forms that also provide information about  Medicare   health  plans. You enter your basic information. This takes less than 5 minutes. You will be matched with a few local agents who are eager to work with seniors.

Will Health Care Reform Kill Medicare Advantage?

It has been six months since the highly contested Patient Protection and Affordable Care Act, also called health care reform, became law. Polls show that people remain worried about how the law will affect their health care. There is a lot of talk about big cuts in  Medicare , and seniors are worried their coverage will be reduced or that their doctors will no longer accept  Medicare . Should they be worried?

The worst news is for people who love their  Medicare  Advantage plans. This program pays private insurance companies to enroll seniors in managed-care networks. Many plans offer more benefits than “plain”  Medicare , such as dental and vision coverage and  health  club memberships.

The problem with  Medicare  Advantage is that taxpayer’s aren’t getting their money’s worth from the program. Much of the recent increases in  Medicare  costs can be traced to overpayments to insurance companies offering the subsidized plans.You’ve heard that  Medicare  is going broke? Well,  Medicare  Advantage is a big reason for that.

A  Medicare  Advantage benefit costs the government 14 percent more than exactly the same benefit offered through regular  Medicare . In some parts of the country, the difference is as high as 20 percent. That extra money is being eaten up in marketing and administrative costs, and in profits to the insurance companies.

According to the U.S. Department of  Health  and Human Services, all  Medicare  beneficiaries, including those enrolled in regular  Medicare , are paying for these overpayments through higher premiums. HHS says that this year these subsidies are adding about $3.60 per month to premiums.

But there is no proof that the program is providing better  health  care than regular  Medicare ; just that it’s more expensive. And for this reason, most of the cuts to  Medicare  provided in the  health  care reform law are cuts to  Medicare  Advantage, not regular  Medicare .

These cuts won’t go into effect all at once. In 2011, the subsidy going to private insurance companies will be frozen at 2010 levels. After that, the payments will be reduced an average of 12% per year, until costs are more in line with the cost of regular  Medicare . Beginning in 2014, the private insurers offering  Medicare  Advantage plans must maintain a “medical loss ratio” of at least 85%, which is a fancy way of saying that 85 percent of the subsidies and premiums they receive must be paid out in benefits. On the other hand, companies that meet certain benchmarks for quality of service are eligible for a bonus.

Bottom line: according to the Congressional Budget Office, by 2019 the private insurance companies offering these plans will receive $136 billion less than they would have received at the current level of subsidy.

Naturally, the private insurance companies do not like this one bit, and they say they will drop out of the program if these cuts aren’t repealed. And when those  Medicare  Advantage taxpayer subsidies stop being a cash cow for those companies, they might very well drop out of the program. Companies that stay in the program probably will eliminate some of the extra benefits that make  Medicare  Advantage popular.

Some seniors will be unhappy about this, but it’s important for them to understand why it is happening —  Medicare  Advantage as it is has been dragging the entire  Medicare  program closer and closer to bankruptcy.

Before the  Medicare  program began in 1965, only 56 percent of people over age 65 had any  health  insurance. Today, without  Medicare , the percentage of seniors with  health  insurance would be very tiny, indeed. It’s a sad fact that in our autumn years, nearly all of us will suffer increasing problems with our health. Some ailments — arthritis, heart disease — are common, and some are rare, such as mesothelioma cancer, rarely diagnosed before the patient is 50. Either way, senior health care is expensive, and private insurance companies don’t want seniors as customers — unless taxpayers are supplying the profits.

In 2009, while  health  care reform was being hotly debated in Congress and town hall meetings all over America, some insurance companies deliberately misinformed their customers about what the bill would do to their  Medicare  Advantage Plans. One major  Medicare  Advantage provider sent out a letter to its  Medicare  Advantage customers claiming that Congress and President Obama would cut “important benefits and services” provided by  Medicare .

Remember the stories about silver-haired grandmothers marching in protests with signs saying “Keep Government Out of My  Medicare “? People laughed at them, but it’s possible those were misinformed  Medicare  Advantage customers.

But the Patient Protection and Affordable Care Act is not cutting any benefit from  Medicare . In fact, it is adding a few new benefits. Beginning this week,  Medicare  patients will not have to pay a co-payment to the doctor for preventive care or for an annual checkup. The  health  care reform law also will gradually close the infamous “doughnut hole,” the gap in  Medicare  Part D prescription drug coverage that costs some  Medicare  patients thousands of dollars every year.

Last year, the trustees of the  Medicare  program announced that by 2017, the part of  Medicare  that pays hospital bills would be out of money, and  Medicare  would have to stop paying those bills. This year, the same trustees said the hospital fund should be good until 2029, thanks mostly to the health care reform bill. This tells us the struggle to save the program isn’t over, but we’re moving in the right direction.

As we get closer to the November midterm elections, watch out for politicians citing the cuts to  Medicare  Advantage as a reason to repeal the  health  care reform bill. Without those cuts,  Medicare  itself is in grave danger.

Exploring The Senior Health Situation in the United States

Senior health should be a concern to all of us because none of us can escape the effects of aging. The senior population is increasing steadily. Today there are around 50 million seniors in the United States. By 2036 there will be over 80 million. In 1940 someone at the age of 65 could plan on living another 14 years. Today a 65 year old can expect to live 20 more years. The point here is that senior health care has made it possible for the elderly to live longer. Although it is certainly wonderful that seniors are living longer lives, problems have arisen as it pertains to the financial burden it has created.

A recent study suggested that over 13 million seniors are financially unprepared for retirement. 9 out of 10 seniors rely on social security for support. It is believed that 50% of seniors have no private pension option and over 30% do not have savings sufficient enough to cover their needs. Those seniors having to file bankruptcy due to skyrocketing medical debt is on the rise. Today the majority of seniors depend on the   medicare  program for  health  coverage. This program is pertinent to senior health and without most seniors would have no senior health coverage at all.

However, the number of seniors on  Medicare  is increasing at an alarming rate. Less than a decade ago only 40 million seniors were receiving  medicare . Today that number has risen to 48 million. This year has many concerned because the first of nearly 80 million baby boomers begin entering the senior class and many will enter the  medicare  ranks. This year with the arrival of the baby boomers it is estimated that  medicare  spending to preserve senior  health  will rise to 929 billion or 19% of the United States federal spending budget. At this rate, by the year 2030,  medicare  could be in big trouble.

Beyond the medical costs associated with senior health there are the problems seniors face with simply growing old.  Medicare  does not pay for all medical costs and therefore seniors must pay the remainder out of pocket or with supplemental insurance. As we grow older our bodies begin to fail us. We become more at risk for disease. It is no wonder that over 6 million seniors suffer from depression and only 10% will ever receive treatment. This effects senior health incredibly. Seniors are often afflicted with health concerns like osteoporosis, dementia, depression, diabetes, high blood pressure, cancer, heart disease and arthritis. Many have outlived their spouse, children and no longer have the social support system they once enjoyed. However, better senior health opportunities are out there.

It is important that seniors are encouraged to not give up on life. They need the social support system that is often lost in the shuffle because their children lead busy lives. Seniors need to stay proactive and engage in as many activities as possible to get the social support they need. It is also vital that seniors follow a proper diet and exercise. Seniors should exercise 3-5 times per week, 30 minutes per event. This is a very good for disease prevention. It will allow the senior to feel good about themselves and provide them with more energy and enthusiasm.

Seniors are living longer. Sure the cost of living longer is going to be enhanced, but seniors can still live happy in their twilight years. With exercise, diet, regular screenings, and a proper social support system in place they can be some of the best years of their lives.

What Is Medicare Supplemental Insurance?

For those who are enrolled in the Medicare program the coverage may simply not be enough. That is why there are Medicare Supplemental Insurance or Medigap programs in place. If you are unsure of whether or not you need Medigap insurance for your Medicare program please read what is contained below.

What is Medicare

Medicare is an entitlement program created by the federal government as its principal health care plan for seniors. To qualify for Medicare all you need to do is reach the age of 65, become permanently disabled or have end stage renal disease. Medicare was originally created to help our elderly with the burden of paying for health care. Medicare is not free however; recipients pay a monthly premium as well as portion of the cost of services they receive as a co-payment or deductible amount.

Medicare also does not cover certain needed services such as nursing homes and in-home health care. To pay for services that are not covered by Medicare most recipients turn to private insurance policies that are called Medigap. What are the gaps in coverage?

Medicare Part A

There are actually quite a few gaps in Medicare coverage you should be aware of depending upon which Medicare program you are enrolled in. Medicare Part A coverage is known as hospital coverage because it takes care of such things as inpatient hospital and skilled nursing, home health and hospice.

What Medicare currently does not cover however is:

The hospital deductible: This is the amount you must pay for your hospital stay before Medicare will cover the rest. The amount as of last year was over $1000.00

The hospital coinsurance coverage: Medicare covers your hospital stay in full, besides the deductible, for the first 60 days of your stay. However after the 60 days are up if you still need to be in hospital Medicare will no longer cover all of the charges but will charge you a daily coinsurance payment.

Hospital services: Once you have been in hospital for 150 Medicare will no longer bear any of the cost

Skilled Nursing facility: Medicare covers a skilled nursing facility stay for up to 20 days, if you need skilled care beyond that you will need to pay a daily coinsurance amount

Skilled nursing facility services: If you need to be in a nursing home for more than 100 days, Medicare will not cover any of the expenses.

Home health aide services: While Medicare will defray some of the cost of occasional home health aide services it does not cover extended services.

Home health aide or nursing services: Medicare will not cover home health aide or home health nursing unless skilled care is necessary.

Medicare Part B

Although Medicare Part B was created to be Medicare’s premier supplemental insurance it ended up becoming more of an outpatient and preventative medicine type of coverage. The types of coverage Part B covers is durable medical equipment, supplies the physician uses, prosthetic devices, and ambulance services. Just like with Part A there are gaps in the coverage here as well, although not as many.

Deductible: Medicare Part B has a flat yearly deductible that must be met before any services are covered under Medicare. While minimal in cost the amount last year was $135 and goes up each January 1.

Part B coinsurance coverage: While Medicare Part A covers 80% of the items that Part B takes care of neither covers all and there is a 20% coinsurance payment you must cover.

Any person who is eligible and enrolled in the Medicare program needs a Medigap or Medicare supplemental insurance to help defray the costs missed by Medicare Part A and Part B.