Medicare Patients Aren’t Taking Advantage Of Some Newly Free Tests
Washington, DC, United States (KaiserHealth) – Despite tough economic times, there are some things the government can’t give away.
Starting this year, seniors enrolled in Medicare no longer have to pay for more than a dozen tests and other services to help prevent or control cancer and other costly and debilitating diseases. These benefits, which also include an annual wellness exam, are part of the new federal health-care law.
But big crowds aren’t lining up for free mammograms or colonoscopies, although early data indicate that the free wellness checkup is luring patients.
Advocates say details about the new benefits haven’t reached enough seniors, and Medicare’s information about it isn’t easily accessible and can be confusing.
“Our hope is that by waiving cost-sharing and making preventive care more affordable, more beneficiaries will get it,” said Jonathan Blum, deputy administrator at the Centers for Medicare and Medicaid Services.
At a senior center in Reston, roughly 35 people recently attended a “Medicare 101″ meeting that provided information about the free services.
Howard Houghton, director of the Fairfax County senior health insurance information program, said he warned the seniors not to delay calling their doctor. “You want to do it sooner than later because this law might get repealed,” he said. “The law might change, so why take a chance?”
Even doctors have had some trouble figuring out what tests and exams are free and for which patients. Medicare is now paying all costs for most services that earned top ratings from the U.S. Preventive Services Task Force, an advisory group of medical experts. But if patients receive those services more often than recommended or don’t have risk factors to qualify for the tests, they can be charged a co-payment. In some cases, seniors may still have to pay for an office visit, even if the screening or test they receive is free.
To help clear things up, the American Medical Association issued a two-page guide for doctors. That’s in addition to e-mails that Medicare has sent to physicians and their professional associations.
Steven Schwartz, a family physician in Kensington who also teaches at Georgetown University’s medical school, said his group practice developed its own checklist of the preventive services and is contacting Medicare patients who haven’t had a wellness exam.
In 2008, when co-payments were required for many of the tests and screenings that are now free, only a minority of traditional Medicare beneficiaries in the District, Maryland and Virginia received them.
For example:
- Fewer than 4 percent took advantage of the one-time “Welcome to Medicare” physical exam.
- Fewer than 10 percent were tested that year for diabetes.
- Only 36 to 41 percent of women received mammograms.
- Only 12 to 15 percent of women got bone density tests.
- Fewer than 20 percent of men received prostate cancer screenings.
- And even though the flu shot was available for free before 2011, fewer than half got one.
A list of which preventive services are now free and other information are included in the “Medicare & You” handbook (available at www.medicare.gov or at 800-MEDICARE), the user’s manual sent to all 48 million Medicare beneficiaries. A 48-page Medicare guide on preventive benefits is also available online at www.medicare.gov.
But Joe Baker, president of the nonprofit Medicare Rights Center, said seniors usually read the handbook only when they have questions about a benefit. “If they haven’t heard about it, they’re not going to look for it,” he said.
One reason why seniors may not pay attention to the changes is that they have purchased a supplemental insurance policy or a Medicare Advantage managed-care plan that already offers some preventive health services without additional charges.
But cost isn’t the only reason that seniors may not be receiving preventive health services. Some people worry about whether procedures will be uncomfortable, and many are afraid of hearing bad news.
“It’s human nature to put off things that aren’t pleasant,” she said.
Blum thinks that attitude may be changing. In just the first three months of this year, almost 300,000 seniors nationwide received the new free wellness exam.
“Based upon what we’ve seen so far, we are very optimistic that we will have a greater proportion of beneficiaries who will take advantage of the preventive benefits,” said Blum.
– Provided by Kaiser Health News.
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Medical Device Industry Lobbies IRS and Congress To Dodge Health Law Tax
Washington, DC, United States (KaiserHealth) – Like many other interest groups, the medical device industry met with White House officials in the run-up to the health care battle in Congress. But while insurers, pharmaceutical firms and even the American Medical Association made agreements trading their support for specific concessions, the device makers were not able to close a similar deal.
As a result, the final health care reform bill included a 2.3 percent excise tax on device makers that’s expected to produce $20 billion over a decade to help pay for expanded health coverage.
That’s the law, or so it would seem.
But in Washington, it’s never over until it’s over. And like other medical interests who are scrambling to influence the implementation of health care reform, medical device makers are showering cash on friends in Congress and working the halls, hoping that one of five bills that would overturn the excise tax might actually make it into law.
Veteran Hill watchers say that may be a long shot, so to hedge its bets, the industry is also lobbying the Internal Revenue Service to write rules exempting hundreds of devices from the excise tax — even though the health law says the exemption should be limited to items widely purchased by the public from retailers. The outcome of that under-the-radar battle is far from certain.
The medical device business and its lobbyists have a strong record of winning concessions and at least partially deflecting the costs of health insurance coverage expansion. An early Senate “framework” version of the health bill pushed by Democrat Max Baucus of Montana, for example, would have nailed the industry with a $40 billion excise tax bill over ten years beginning in 2010. Shocked at the price tag, the device manufacturers’ trade group, the Advanced Medical Technology Association (AdvaMed), pushed back, aided by industry giants Medtronic Inc., Johnson & Johnson, 3M Co., and others.
With the help of a bipartisan group of lawmakers, the device makers succeeded in cutting the tax in half in the final health care law, which also delayed the start date for the tax until 2013, three years later than in the Baucus proposal.
Manufacturers, however, maintain that even the smaller tax in the health care law is catastrophic for them. So the industry is targeting Capitol Hill anew and working the regulatory process, searching for concessions.
Five industry-supported bills currently before Congress would completely overturn the excise tax on medical devices, the most widely supported of which are bills introduced by Sen. Orrin Hatch, R-Utah, and Rep. Erik Paulsen, R-Minn. Hatch’s bill has- Republican co-sponsors. Paulsen’s House bill has 119 co-sponsors, including three Democrats.
Hatch, who has been one of the health care law’s fiercest opponents, says the tax on medical devices will increase insurance premiums and the cost of care. Relying on an excise tax “to fund Obamacare will cripple an important engine of opportunity, job growth and innovation,” Hatch said in a January news release.
CAMPAIGN CONTRIBUTIONS FROM INDUSTRY
In 2009 and 2010, both Hatch and Paulsen were major beneficiaries of medical device industry money.
Hatch was not up for re-election that cycle but received more than $90,000 in campaign donations from the medical supply industry, which made him the trade group’s third largest political beneficiary, according to the Center for Responsive Politics. The political action committee of the AdvaMed association alone contributed $10,584 to Hatch’s campaign, and $3,150 to Paulsen’s.
The political action committees of individual companies also chipped in. The PAC of Boston Scientific, a major manufacturer of heart and other medical devices, contributed $7,000 to Paulsen’s campaign and $5,000 to Hatch’s. Medtronic, the world’s largest medical device maker — which is based in Paulsen’s home state — donated $3,000 to Paulsen and $5,000 to Hatch.
Paulsen spokesman Tom Erickson said the bill is a response to job loss fears, not industry campaign donations, and that more than 400 medical device companies are based in Minnesota. A Hatch spokesman said the senator’s bill reflects his political philosophy: “It’s something he has felt strongly about for a long time, that taxes are counterproductive,” spokesman Mark Eddington said.
Hatch and Paulsen are only two of the friends the device industry is counting on for help.
In late March, Democrat Amy Klobuchar of Minnesota and Republican Scott Brown of Massachusetts launched a new Senate medical technology caucus to increase awareness about issues facing the industry. Both represent states with significant medical device manufacturers and have been major beneficiaries of industry money.
Boston Scientific, which in 2010 had $7.8 billion in sales, is based in Brown’s state. In 2010, Brown received more than $30,000 in campaign donations from the medical supply industry, which is dominated by the device makers. Klobuchar received more than $40,000 in contributions.
“These businesses not only spark medical breakthroughs, they save lives,” Klobuchar said in comments released on the day the new caucus was launched. “Every day in every state small medical technology companies are driving the innovation agenda we need to compete in a global economy. I will continue to work to make sure that Minnesota remains a leader in health care innovation by developing innovative products while maintaining patient safety.”
The House medical technology caucus was revamped in February. According to the industry newsletter MedCity, its new website was launched on the same day that Paulsen, who chairs the group together with Anna Eschoo, D-Calif., addressed the Minnesota life sciences trade group LifeScience Alley.
In the halls of Congress, the medical device manufacturers have long pushed the jobs refrain, first to deflect taxes, and second to fend off scrutiny from the U.S. Food and Drug Administration, which regulates devices. Dr. Josh Makower, the founder of Exploramed, a medical device incubator – who frequently testifies before Congress – said the excise tax will particularly hurt small firms, many of which rely solely on investment capital for years before turning a profit.
“The saddest thing is that these small companies are exactly the ones that are delivering new innovations,” Makower told iWatch News in an e-mail response to questions.
REVOLVING DOOR
In pushing its interests, the device industry benefits from the revolving door connecting K Street with Capitol Hill.
In December, former AdvaMed executive Brett Loper, who lobbied against the excise tax, was named House Speaker John Boehner’s chief policy officer. Elizabeth Kegler, the association’s vice president of government affairs, is a former health policy advisor to Sen. Chuck Grassley, R-Iowa.
Advamed spent almost $1.5 million lobbying Congress on behalf of its members in 2010. First quarter lobby disclosure records for 2011 will not be available until late April, but medical device industry activity suggests the industry has likely not slowed its spending.
Despite device industry campaign donations, powerful allies, and support for the Paulsen bill in the House, George Schutzer, a tax lobbyist and attorney at the Washington firm Patton Boggs, said he doubts Congress is ready to overturn the device tax. A win for the medical device industry would “open the flood gates” for challenges to the health reform bill by other parts of the medical industry, Schutzer said, and would most likely result in an Obama veto.
As a result, the medical device industry has taken the fight beyond Congress to the Internal Revenue Service, which will administer the tax.
That part of the struggle appears to be splitting the industry as manufacturers try to protect their market niches. Although the medical device category includes big-ticket items generally sold to hospitals, including artificial hearts, pacemakers, coronary stents and artificial joints, it also includes a wide range of less expensive items ranging from tongue depressors to examination gloves.
The health law exempts from the excise tax eyeglasses, contact lenses, and any device the Treasury Department determines is generally purchased by the general public at retail for individual use. Certain sectors of the device industry, however, contend that devices from wheelchairs and scooters to home oxygen systems fit the exemption criteria.
In written comments to the IRS, which is expected to publish tax guidance for device manufacturers, DJO Global, the largest U.S. supplier of orthopedic devices, asked for an exemption on all items classified by Medicare as durable medical equipment, prosthetics and orthotics, including bone-growth stimulators and electrotherapy devices. The American Association for Home Care, which represents the home medical care industry, wrote that it believes all durable medical equipment, including complex power wheel chairs, should be exempt.
“Durable medical equipment and home medical equipment fit that exemption language to a tee,” said Jay Witter, senior director of government affairs at the American Association for Home Care, in an interview. Witter quoted a 2009 fact sheet released by former Speaker Nancy Pelosi that said wheelchairs would be exempt, and that the excise tax would apply only to sales of medical devices to hospitals and other institutions. The comment period on the exemption ended in late March; the IRS did not respond to questions on when it might decide who gets the exemption and who doesn’t.
Witter said it is unclear whether wheelchairs and other durable medical equipment were included in revenue calculations that projected $20 billion in revenue from the tax over a decade’s time. But since the majority of home health customers are covered by Medicare, which pays set rates, Witter said the cost of the excise tax cannot be passed on to consumers.
Diana Zuckerman, president of the National Research Center for Women & Families, a think tank that focuses on health issues, said the idea that all durable medical equipment should be exempt from the excise tax is absurd and could impair funding for the health care law.
“If they get what they want, the whole health care bill collapses,” said Zuckerman. “There is too much money involved to get rid of the excise tax or to substantially lower it.”
TAX DEDUCTION WINDFALL?
As device manufactures plead for exemptions, hospitals and group purchasing organizations worry that those who remain on the hook for the tax may simply pass it on in higher prices to hospitals and other purchasers. Curtis Rooney, president of the Health Industry Group Purchasing Association, said the excise tax could even wind up being a windfall for medical device manufacturers.
In a letter to the IRS, Rooney’s organization, along with the American Hospital Association, the Federation of American Hospitals and the Catholic Health Association of the United States, wrote that device manufacturers should be prohibited from passing on the excise tax to consumers, especially if they are allowed to deduct the excise tax when calculating their federal income tax.
Allowing device manufacturers to write off the tax and pass along the cost, the letter says, would “permit a financial ‘double-dip’ that could leave device companies in a better financial position than before the [health law] was enacted.”
Asked if device manufacturers planned to increase the prices charged to hospitals and other consumers to make up for excise tax, an AdvaMed spokeswoman declined to answer. She instead referred to a comment by David Nexon, the association’s senior executive vice president: “Each AdvaMed member company will have to individually decide how to best deal with the damaging effects of the tax. For some, that might mean cutting R&D, reducing staff or other measures. Those are tough business decisions that will have to be made if this tax goes forward and go to the heart of why we opposed the tax in the first place.”
iWatch News is the investigative news report of the Center for Public Integrity, a nonprofit group focused on investigative journalism.
– Provided by Kaiser Health News.
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Obama Hits Back At GOP On Health Proposals
Washington, D.C., United States (KaiserHealth) – KHN’s Mary Agnes Carey and Marilyn Werber Serafini talk with Jackie Judd about President Obama’s Wednesday speech outlining his details for reducing the deficit and hitting back at a Republican deficit plan. In it, Obama laid out his plans for preserving Medicare while cutting spending in the program, and he also rejected a Republican plan to give states block grants for Medicaid.
Transcript:
JACKIE JUDD: Good day, I’m Jackie Judd and this is Health on the Hill. President Obama delivered a much-anticipated speech today, describing in broad terms his proposals to reduce the nation’s federal deficit. He outlined some changes to Medicaid and Medicare and he slammed a House Republican budget proposal that would, among other things, provide older Americans with a set amount of money-premium supports – to purchase insurance.
President Obama video excerpt: Let me be absolutely clear. I will preserve these health care programs as a promise we make to each other in this society. I will not allow Medicare to become a voucher program that leaves seniors at the mercy of the insurance industry, with a shrinking benefit to pay for rising costs.
JACKIE JUDD: Here to take a closer look at what Mr. Obama had to say about the government’s health insurance programs are Mary Agnes Carey and Marilyn Werber Serafini, both of Kaiser Health News. Thank you both so much.
I know it was a lot to go through, the White House has not yet provided all the details. But tell us what you understand to be the proposed changes the president is making. First, Medicare.
MARILYN WERBER SERAFINI: Actually, what we know is that we still have a lot to know. The president did not talk in great detail today. But what he did, in Medicare, was talk about two basic things. One is he wants to get the cost of Medicare prescription drugs down by relying on some discounts that are already present in the Medicaid program, the health care program for the poor. The idea would be to apply – perhaps, and again we don’t have a lot of the detail – but to apply the same kinds of discounts to people who get prescription drugs in Medicare to people to people who are eligible for both Medicare and Medicaid, in other words, low-income seniors.
The second area in Medicare has to do with the Independent Payment Advisory Board, which was created in the health care overhaul law. This board is set with some targets to reduce spending in Medicare. What the president did was he proposed to give that board greater, sharper teeth so that it could achieve even greater savings in that program.
JACKIE JUDD: He also said that his philosophical approach to this is different from Republicans. He says where he wants to save money is by reducing the cost of health care services themselves vs. what he says the Republicans want to do, which is shift the cost burden to recipients.
MARILYN WERBER SERAFINI: Exactly right. Paul Ryan, the House Budget Committee Chairman, in his budget proposal proposed something called premium support. It would essentially change Medicare from being an entitlement program, which means currently the government pays as much as is necessary to care for seniors.
It would change the basic premise of that program so that there would be a set amount of money that the government would spend on each person. President Obama made very clear in his remarks that he calls it a voucher. There’s a lot of discrepancy right now whether you call it a voucher or premium support, but either way it would mean a set amount of money and President Obama has made it very clear that is not what he wants to do.
JACKIE JUDD: Let’s move to Medicaid now. The president probably spoke with even less specificity about what he wanted done with Medicaid. But tell us what you have figured out.
MARY AGNES CAREY: He definitely said he wants to work with governors to make the program stronger and more efficient. This has been a theme that President Obama has sounded for months now. As governors have complained about rising Medicaid costs, he wants to work with them, so he seems very open to their approaches.
He talked about having a single matching rate for Medicaid that would reward efficiency within the states, but also increase their funding from the federal government if there were a recession. So it’s a little unclear – there are Medicaid matching rates and then the Children’s Health Insurance Program is involved there, sometimes in reimbursement. So he seems to want to make some changes there. But, again, as Marilyn said, the devil is always in the details, a little unclear exactly what we’re talking about here.
JACKIE JUDD: The promised savings he described in his speech – $500 billion by 2023, this is all related to health care programs, a trillion in the decade following – is that on top of the promised savings from the overhaul law.
MARILYN WERBER SERAFINI: Yes, it is. It is meant to be additional savings to what has already been proposed. He’s talking about an extra $200 billion in Medicare, an extra $100 billion from Medicaid, and the total being close to – a little bit more than that. We’re not exactly sure where the remaining amount comes from. But it’s supposed to be a little bit more than $300 billion, so we’ll see where the rest of that is due to come from.
JACKIE JUDD: I think listening to the entire 45-minute speech, some people would walk away and say, the president, who announced his re-election plans last week, was much more forceful in denouncing what House Republicans are proposing than he was forceful in describing specifically what he wanted to do. So, was it as much a political speech as a policy speech?
MARY AGNES CAREY: Well, politics and policy, as we know, often intersect in Washington. So certainly, I think politics plays a part here. But also, he seemed very concerned about the rising deficit and how do we attack it. Republicans have their vision, and he said I have my vision, and he feels that for the good of the country and to get our spending under control, it’s very, very important to look at this and figure out different ways to work it.
The other thing we have to think about here is the debt ceiling. That is coming soon. We have to raise the debt ceiling. The president has to go to Congress and get their agreement. The Republicans in both the House and Senate have made it very clear they’re not going to vote for a debt ceiling increase unless they see some restraints on government spending. Now whether or not the president’s plan is going to suffice here is unclear. But I think that his play to Congress, if you will, to raise the debt ceiling was as much a part of this today as anything else.
JACKIE JUDD: And a final question to you, Marilyn. What has been the early reaction from the Republicans.
MARILYN WERBER SERAFINI: Well, the Republicans so far have very quickly come out with press releases and statements that try to turn the tables on President Obama by saying, look you’re talking about now reducing the budget deficit, when in your own budget you’re actually putting forth proposals that would increase the budget deficit. And also, the Senate Republican leader, Mitch McConnell, came out with a statement saying that you also did that in the stimulus spending. That everything you’ve done so far would increase the deficit, not decrease it. And they’re trying to really label him as talking out of both sides of his mouth.
JACKIE JUDD: I know I said that was the final question, but one more. And that is the timeline he laid out in here was to start talking about it with some depth, detail, seriousness in May, have a plan done by the end of June.
MARY AGNES CAREY: I just had someone on the phone offer to buy me a steak dinner if that comes out. And he is confident that he will not have to purchase that dinner. And I don’t think I’m getting a free dinner, either. It’s a very optimistic timeframe, but, of course, Washington works on deadlines. So if you say June, and it slips to July, perhaps that will work – or slips to August. Never hurts to aim high. I think that’s what the president is doing. But I can’t imagine that will happen. I guess we’ll see how it plays out.
JACKIE JUDD: Thank you so much both of you. Mary Agnes Carey, Marilyn Werber Serafini. I appreciate it.
– Provided by Kaiser Health News.
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Rangers win, Rangers in: Rip Devils to make playoffs; ‘Canes fall to Bolts
NY, NY, United States (AHN Sports) – The New York Rangers scored four straight goals, including three in the second period, to top the New Jersey Devils 5-2 Saturday to notch the final playoff spot in the East.
N.Y., with 93 points, edged out the Carolina Hurricanes (91) who fell 6-2 Saturday night to the Tampa Bay Lightning.
Nick Palmieri and Ilya Kovalchuk scored for the Devils in the opening period, but Chris Drury made a nifty move to knock a shot past Martin Brodeur for the Rangers.
It was the banged-up Drury’s first goal in 25 games.
Henrik Lundqvist (24 saves) shut down the Devils the rest of the way, while Wojtek Wolski, Ryan McDonagh and Brandon Prust netted second period goals for the Rangers.
Vin Prospal added another insurance goal in the third period for N.Y., which played frustratingly flat in a pivotal loss vs. the Thrashers but was solid throughout Saturday’s tilt.
The Rangers lost control of their playoff destiny when they lost to the Thrashers earlier this week, and the Hurricanes ripped the same Atlanta club.
Carolina fell behind Tampa 4-0 Saturday night, however, and could not catch up in a frustrating loss at the RBC Center.
It marked the second straight season the Rangers playoff hopes hinged on the outcome of the final day of the campaign.
The Flyers squeaked in ahead of N.Y. last season with a shootout win over the Rangers.
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Call for new Myanmar government to boost health spending
YANGON, Myanmar (IRIN) – With a new government recently sworn in, a former Myanmar health official is calling on leaders to invest more in healthcare for the country’s poorest.
“Our country is sorely in need of a health insurance programme. The government should introduce a health insurance programme like the 30 Baht scheme that Thailand adopted for poor households,” said Aung Tun Thet, former Health Ministry director-general of planning and statistics and secretary of the inter-ministerial National Health Committee from’89-1992.
In 2001, Thailand introduced a universal coverage scheme to improve healthcare access for its poorest citizens. Low-income patients are charged 30 Baht (approximately US$1) per medical consultation. The service is free for those younger than 12, over 60, and the very poor.
Though there is no national health insurance in Myanmar, all public hospitals offer a medical cost-sharing plan – first introduced in’93 – where patients cover medicine and laboratory fees and the state pays doctors’ fees.
Soldiers in military hospitals are exempt from paying for medicine or lab tests, and tuberculosis patients are not required to pay for drugs at a public hospital.
Cost-sharing
According to state media, Health Minister Kyaw Myint recently rejected a proposal by opposition parliamentarians to boost coverage for the poor, stating that the existing cost-sharing system was sufficient.
But for Ma Oo*, mother of a nine-month-old child, medical and lab fees were unaffordable on her husband’s income as a rickshaw and bicycle repairman in the economic capital, Yangon, when their baby needed an emergency operation.
“When doctors and nurses told me I had to buy medicine for the operation, I felt so sad and helpless because I could not afford it.” She said nurses “scolded” her for not having the money. After realizing the child would not get the life-saving operation otherwise, Ma Oo said the medical staff asked her to sign a letter testifying her family could not afford the medication to justify not paying for drugs.
Aung Tun Thet said these ad-hoc arranagements offered some hope to poor patients. “There are some healthcare providers that give free healthcare to poor people so the poor can get treatment even if they cannot afford medical fees.”
A new medical graduate who preferred anonymity confirmed that hospitals could not “deny any patient”.
Instead, hospitals ask patients who can afford to do so to purchase extra medication, and even medical supplies such as syringes, to donate to the poor. A doctor working in central Myanmar who gave his name as Htway said this stock is then distributed. “We health workers always check the [leftover] drugs donated by some patients to find out whether they are still valid.”
Myanmar had the world’s 44th highest rate of child mortality in 2009, with an estimated 71 children dying before their fifth birthdays out of every 1,000 live births.
While government data show an estimated 66 percent of children in this age group with suspected pneumonia infections – a leading childhood killer – were taken to a health facility from 2005-2009, there is no record how many of them received antibiotics.
Stop-gap measures
A technical officer and health financing specialist at the UN World Health Organization (WHO), Riku Eloviano, said community-based health insurance plans – such as higher-income patients subsidizing care for poorer patients – “have had some positive impact in making access to care and medicines more affordable for people… They [community health insurance schemes] provide a formal expression of solidarity where [the] rich can subsidize the poor and the healthy can subsidize those who are sick.”
However, she said: “These schemes often… cover only a relatively small number of the population, which means that the resources gathered through member contributions are low, which in turn hampers the ability of these schemes to act as an effective risk protection mechanism… They are often not financially viable as a long-term solution.”
Rather, the government should boost medical spending to ensure everyone from “hawkers to farmers” could afford care, suggested Aung Tun Thet. “Hopefully a new government will consider investing more in the health sector.”
Of WHO member countries that supplied information in 2007, Myanmar devoted the lowest percentage of its GDP to healthcare, about 1.9 percent. But this was still an increase over previous spending, according to government records .
[CORRECTION: Due a local currency devaluation, the original article wrongly stated the US dollar value of government health spending in 2008/9. ]
Health administration and insurance accounted for 4 percent of total spending in 2009.
*Not her real name
pt/tt/mw
– Provided by Integrated Regional Information Networks.
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Where The GOP Might Go On Medicare
United States (KaiserHealth) – Amid the buzz about a possible government shutdown over this year’s budget looms a more difficult question: What to do about entitlement programs, especially Medicare?
Politicians of all stripes have been decrying the nation’s soaring debt and say that taming entitlements is crucial to curbing spending. So far, President Barack Obama hasn’t proposed big changes. But some Republican leaders have called for a major overhaul of Medicare, a $520 billion program that covers nearly 47 million older and disabled Americans. Given the political peril involved in tampering with Medicare, the question is: How serious are the Republicans?
A major signal will come when Budget Committee Chairman Paul Ryan of Wisconsin unveils his proposed budget for 2012, expected next week. Some of his colleagues bluntly say big entitlement programs like Medicare can’t continue as is. “Most of us, 54 and younger, are not going to be able to enjoy the same type of programs that are in existence now,” House Majority Leader Eric Cantor, R-Va., said this week.
With a presidential election coming up next year, some observers say it’s unlikely anything big will happen involving entitlements before 2013, at the earliest, but that won’t stop the debate. Here is a guide to some of the ideas being discussed, especially in Republican circles, on changing Medicare:
RAISING THE ELIGIBILITY AGE: The age for full Social Security benefits is now 66 and will reach 67 in 2027. Some analysts – including Ryan and Alice Rivlin, who was budget director for President Bill Clinton — argue that it makes sense to slowly raise the Medicare eligibility age from 65 to 67. People are living longer and retiring later so they don’t need Medicare as early as their parents did, they say.
How Much Would It Save? According to an analysis by the Congressional Budget Office, gradually increasing the Medicare eligibility age would save the federal government $125 billion over the next decade.
The Gain: People who are still working at 65 and get health insurance at work could stay on their employers’ plans for another two years, thus slowing Medicare spending. Assuming the health law survives, people without job-related insurance would have more alternatives than they do now: They could buy coverage — even if they are sick — on the new exchanges being set up under the health law and may qualify for subsidies to help purchase insurance. Or, if they are lower income, they might be eligible for Medicaid, the state-federal program for the poor that will be expanded sharply in 2014. A gradual phase-in of the higher age requirement means that current beneficiaries and those near retirement would not be affected. “The impact of that takes a long time to hit,” said Joe Antos of the conservative American Enterprise Institute.
The Pain: Health care costs that are now borne by Medicare for people 65 and 66 would be shifted to individuals, employers and states, according to a new report by the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)
If the health care law were repealed, some people without employer insurance might not be able to afford coverage or get insurance at any price, especially if they had pre-existing medical conditions. Those people might delay needed treatments, which could eventually increase Medicare’s cost to treat them.
“MORE SKIN IN THE GAME”: Republicans, and some Democrats, have long thought that spending could be slowed if patients, including Medicare beneficiaries, had “more skin in the game” – in other words, put up more of their own money for health services. Some have suggested raising seniors’ share of the Medicare Part B premium (which covers doctor visits and other outpatient services) from 25 percent to 35 percent and imposing co-payments for home health services or the first 20 days of a skilled nursing facility stay.
How Much Would It Save? The home health co-payment would save $40 billion over the next decade for the federal government; the skilled nursing co-pay would save $21.3 billion, according to the CBO. Increasing the beneficiary’s share of Part B would save $241 billion over 10 years.
The Gain: Raising beneficiaries’ share of Part B premiums would bring the program closer to its original 50-50 split between the federal government and beneficiaries, proponents say. And greater cost-sharing for services would discourage overuse of care, they add.
The Pain: Opponents say beneficiaries already spend a big chunk of their incomes on medical care. In 2006, one in four spent 30 percent or more of their incomes on health expenses; one in 10 spent more than half, according to the Kaiser Family Foundation.
Requiring seniors to pay more could discourage people from getting needed medical care. “When you think about this population, which is sicker and uses health care more, what does it mean that they have to pay more and are living on a fixed income?” said Vicki Gottlich, senior policy attorney with the nonprofit Center for Medicare Advocacy.
MEDICARE VOUCHERS: Rep. Ryan, in a blueprint for entitlement overhaul he wrote in 2008 and continues to update, calls for a sharp, fundamental change: Transforming Medicare into a voucher program for future beneficiaries, starting with people who are now 54 and younger. Instead of being entitled to a specific package of benefits, beneficiaries would be given a voucher to spend on private insurance.
How Much Would It Save? Although CBO says Ryan’s Medicare proposals would reduce federal spending, it has not estimated a specific dollar amount.
The Gains: Ryan says that switching to vouchers would give Medicare financial stability. The voucher idea has also gained the backing of Rivlin, who is now a senior fellow at the Brookings Institution.
The Pain: Critics see danger ahead. Most proposals peg the growth in value of the voucher to general inflation or economic growth. But the rate of medical inflation is often higher. That raises concerns that costs will slowly be shifted to beneficiaries.
CHANGING MEDICARE’S DEDUCTIBLE AND MEDIGAP COVERAGE: Medicare charges beneficiaries separate deductibles for their hospital care (Part A) and for outpatient and physician services (Part B). This year, in Part A, beneficiaries pay $1,132 for each hospital stay, and enrollees also pay daily co-payments for extended hospital and skilled nursing care. For Medicare Part B, the annual deductible this year is $162. According to CBO, 30 percent of beneficiaries in Medicare’s fee-for-service program have supplemental insurance known as Medigap coverage to help with those costs.
Some proposals, including one advanced by the president’s deficit panel chaired by former GOP Sen. Alan Simpson and former Clinton chief of staff Erskin Bowles, have suggested combining the Part A and B deductibles into one $550 yearly deductible. That could reduce beneficiaries’ costs for hospital care but be more expensive for seniors who mostly use Part B. In addition, some proposals suggest a 10 to 20 percent co-payment for all services until beneficiaries reach a catastrophic limit. Others argue for making that $550 deductible ineligible for Medigap coverage so that beneficiaries are responsible for covering the cost of those initial services.
How Much Would It Save? Instituting the change in deductibles, co-pays and Medigap rules would save about $93 billion over the next decade, CBO estimates.
The Gain: Medicare would save money, but not just because beneficiaries were putting up more of their own. If Medigap plans were less generous, analysts believe beneficiaries would be more careful about spending and that could help lower Medicare costs.
The Pain: Once again, this proposal would shift costs to individuals.
– Provided by Kaiser Health News.
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World Economic Forum warns on threat of lack of investment to fund infrastructure projects
Geneva, Switzerland (AHN) – Tighter funding for investment in infrastructure and low-carbon projects needed around the world pose a threat to the world economy, according to the World Economic Forum.
The World Economic Forum is Geneva, Switzerland-based independent international organization.
On Tuesday, the World Economic Forum warned that a world economic growth could stall without investment in infrastructure.
Investment in infrastructure has traditionally come from the government. However, changes in regulation of insurance and pension funds have left some government entities with problems in trying to obtain long-term capital to finance costly long-term infrastructure projects.
World Economic Forum officials issued a report saying that without policy and investor changes that long-term investment in infrastructure projects might continue to decline.
A steering committee of 19 people helped to compile the report. The steering committee was comprised of business executives in the investment industry, including pension fund executives.
According to its website, the World Economic Forum is focused on improving the state of the world by trying to get business, political, academic and other leaders of society to engage in efforts “to shape global, regional and industry agendas.”
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Tom Hanks, Rita Wilson sue J.B. Goldman Insurance for alleged embezzlement
Los Angeles, CA, United States (AHN Entertainment) – Hollywood couple Tom Hanks and Rita Wilson have filed a suit against their former insurance agency for apparently overcharging them. They claim that J.B. Goldman Insurance Agency embezzled them for over 20 years.
According to the suit that was obtained by TMZ, the husband and wife team only found out about the company’s embezzlement scheme when they switched brokers last month. The new broker then discovered J.B. Goldman’s gross overcharging for various policies.
The company allegedly overcharged them by insuring them multiple times for the same things, engaging in a “predatory embezzlement scheme” that cost them hundreds of thousands if not millions of dollars.
Hanks and Wilson worked with the defendant to procure homeowners, directors and other business policies for more than 20 years. They are seeking unspecified damages.
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On Health Law’s Anniversary: Predictions For Next Year
Washington, DC, United States (KaiserHealth) – The health care law has been on a roller coaster ride since its passage one year ago, moving forward with implementation plans even as opponents throw up legal and legislative challenges to stop it in its tracks.
At Kaiser Health News, we wondered where these moving parts might be in March 2012, at the measure’s two-year mark. So we asked players and experts from across the nation what they thought the landscape would be like – and, in their view, should be like.
They discussed issues ranging from the new insurance marketplaces called exchanges to the future of accountable care organizations: combinations of hospitals, doctors and sometimes insurers. Here are their edited responses:
Bill Hazel
– Secretary of Health and Human Resources in Virginia, one of the states challenging the constitutionality of the law.
We will be extraordinarily busy. We will probably have designed the new marketplaces – the exchanges – as best we can, but we will still have to go back to the General Assembly for implementation. We’ll have a whole lot to do in a very short period of time. Unless something changes with the law, we will have the whole issue of getting the benefit exchange up and running. Getting it implemented will be a technical challenge.
Currently, everything is in a state of flux. We suspect that aspects of the bill will change with this Congress and we also have the lawsuits, which likely will not be resolved by this time next year.
In Virginia, we’ve authorized the Bureau of Insurance to enforce the law as it stands today. We’ve been told by the General Assembly to plan an exchange and bring it back for approval next year. And we have money budgeted to build an infrastructure that will allow us to determine eligibility for both the formerly eligible and the people newly eligible for Medicaid. We’re trying to streamline and automate the process and are well into that.
Lloyd H. Dean
– President and CEO of Catholic Healthcare West
Over the next year you’ll see more ACOs and more sharing of data and integrating ourselves with other providers.
We’ll begin to see the cost curve bending in the organization. Last year we were one of the first organizations in the country to launch a major accountable care organization – I like to call it a triumvirate, with CHW, Blue Shield of California and Hill Physicians. That’s been a success: We’ve reduced hospital admissions by 22 percent; we’ve reduced the length of stay and hospital days by almost 13 percent. A year from now we’ll be relatively far along in the path of implementing our new electronic health record.
What’s important here is that we’re not sitting on the sidelines waiting for something to happen in Washington, D.C., before we all get in the game. When you look at us a year from now, we’ll be more efficient, with better medical outcomes and better alignment with our physicians and others in the communities we serve.
Tom Goldstein
– Attorney, co-founder of SCOTUSblog
One year from today we should be waiting for a ruling from the Supreme Court. The courts of appeals should have decided the constitutionality and upheld the statute of the reform bill by this fall and the cases should have proceeded quickly to the Supreme Court for expedited consideration.
During the appeals process, I will be watching whether a court invalidates the individual mandate and therefore the entire law. I think that there will have been vigorous dissents on the Commerce Clause so the issue of the fate of the law will still be unsettled by the time it gets to the Supreme Court. But once the cases have been argued, I think the conventional wisdom is that the statute will be upheld because the justices have taken a very broad view of Congress’s power.
Wendy Schiller
– Associate Professor of Political Science and Public Policy, Brown University
The health care message is going to get more complicated for the American voter in 2012. The Republicans clearly ran against the health care bill in 2010, but they’re going to have to come to the table in making cuts to Medicaid and Medicare in the next year. You can’t even get close to cutting the deficit if you don’t cut entitlement spending. It’s going to be much harder for the Republicans to make this a key issue in the 2012 elections.
In Obama’s favor, a lot of the provisions of the health care bill will kick in. And the more people who actually benefit, the more entrenched these programs will be. As we see with Medicare and Medicaid, once a program is entrenched and voters see clear benefits, the [program is] almost impossible to get rid of.
Independents are the only [voting] group you’re really looking at in terms of health care. And the issue will be the battles for the key states — Ohio, Pennsylvania, Illinois, Michigan, Florida and California. It’s really, ironically, going to be a much more localized issue than it is a national issue. From this point forward, it’s the implementation of the health care act that will matter much more for Obama in 2012 than the passage of the act itself.
Ceci Connolly
– Senior Adviser, McKinsey Center for U.S. Health System Reform
What I will be watching are the Republican presidential primaries and the CMS innovation center. I want to be keeping an eye on that, because I feel strongly that the real transformation in health care will come from the private sector. So I am very eager to see if and how quickly seed money from the innovation center can foster truly significant change. Will the innovation center grants help us find a way to deliver the right care at the right time for the right price?
I think what has been striking about health care to date here in the U.S. is this: We have amazing one-off success stories. We can point to them dotting the landscape but the real question is, can and will those be replicated or expanded? That’s why I’m eager about the private sector, but also hopeful that at least this grant money could help nudge it along.
Steven E. Wojcik – Vice President, Public Policy, National Business Group on Health
By March 2012, we hope to convince Congress to adopt medical liability reform that limits how much providers pay in non-economic damages and restricts attorneys’ fees. The administration has signaled that it is open to changes, and there’s a significant gap in the health care law to reduce the unnecessary, added costs we all pay for defensive medicine.
We also will have made sure health care payment reforms pilot projects called for in the health law get implemented quickly and widely throughout the Medicare program because we want to be paying for outcomes and quality not just care. We expect to work through the regulatory process to make sure “consumer directed” or high-deductible health plans are allowed to be offered as rules get drawn up for new insurance exchanges. These plans are the key to getting health costs under control.
Sarah James – Analyst, Wedbush Securities
One of the insurance industry’s main focuses in the next year of health care reform is medical loss ratio [provision, which requires insurers to spend 80 percent of premium revenues on medical care] and how it may change. There’s a push to change the definition of MLR to exclude brokers’ commissions. If it goes through, it would be very positive for the managed care plans. Also, removing broker commissions from premium revenue would make it easier for plans to stay in states like Maine.
Also, there’s the impact of exchanges. Each state’s exchange could be different, creating some favorable markets and some less favorable markets. Another negative aspect is the potential repeal of the individual mandate, which fines people for not having insurance. If you remove that, you’re more likely to have healthy people stay out of plans.
Meanwhile, a lot of insurers are diversifying to areas outside the U.S. with a particular interest in Asia, and also in the technology area. There’s a lot of federal money coming into health information technology.
Katie Mahoney – Director of regulations, U.S. Chamber of Commerce
By March 2012, we hope to persuade Treasury to clarify how the health law bans employers from giving richer health benefits to high paid executives than their employees. We want the regulations to be made clear so employers are not unfairly accused of discriminating against their employees.
The Chamber also hopes to convince regulators to define “essential benefits package” in a less extensive way so it doesn’t make the cost of coverage unaffordable. We don’t want every desirable benefit to be required, because that will drive up costs. The Chamber expects to work through the regulatory process to make sure that employers continue to have important flexibility to design workplace wellness programs. The health law expands the incentive amount that employers’ can offer to workers for participating in wellness programs beginning in 2014. The Chamber also hopes to convince Congress to change the health law’s provision that bars employees from using their flexible spending accounts from buying over-the-counter medications unless they have a doctor’s note.
Howard Bedlin – Vice President for Public Policy and Advocacy, National Council on Aging
Seniors will become more aware of what’s in it for them, because there’s still a lot of confusion and misunderstanding about the implications of health care reform in general. If you’ve been looking at the Kaiser tracking polls, many people don’t even know it’s law.
People will gain a greater understanding of what this means, the fact that some of the Medicare reductions did not cut benefits or impede access to care. They did not cut payments to doctors. They will have access to physicians and may have better access to primary care physicians. Hopefully more will avail themselves of preventive services, annual wellness visits.
I do think an important issue next year, particularly in the fall before the elections, will be what the trends are with regards to Medicare Advantage plans. It will vary a lot by geographic region. What happens next year will have particular implications for folks. We’re talking about a quarter of beneficiaries.
I anticipate that sometime next year, the CLASS program [voluntary long-term care insurance] will be made available for people to sign up. That will affect baby boomers more than seniors, because there will be a work requirement. But seniors who are working will be eligible to sign up. It will provide some meaningful benefits for folks that will be interested in it.
Thomas Johnson – President and CEO, Medicaid Health Plans of America
By March 2012, we want to have regulations on accountable care organizations that ensure managed care plans can play a major role in these new payment and delivery systems. We hope to convince more states to carve drug benefits back into Medicaid managed care. Many states now exclude drug benefit from being managed by their Medicaid managed care plans. We hope to have more guidance on how Medicaid will interact with the insurance exchanges. There should be a recognition that Medicaid health plans have experience in dealing with this population with complex medical histories, and we think our health plans are well suited to be in the exchange. Medicaid health plans should have the option of offering coverage to small business and individuals in the exchanges. We don’t think there should be any barriers that limit their participation.
David Godfrey – Medicaid director, Minnesota
I think we will have made a lot of progress in terms of trying to put the pieces together necessary at the state level to prepare for the creation of the exchanges, although a lot of work will still need to be done on that. But we’ll have a framework, I believe. Also (we’ll be) pursuing different grant opportunities through the ACA, and also begin thinking about policy and program redesign and response to the ACA as well. There’s a lot of interest in administrative simplification. We think this is an opportunity for that. There’s still a lot of work to be done in that area, and we’re still waiting for a lot of the guidance from CMS in terms of just what our programs need to look like by 2014.
The backdrop to all this is we have a significant budget deficit, and there’s going to be incredible pressure in trying to find cost savings in the Medicaid program in response to that and just trying to manage those pressures but still moving forward and putting into place the building blocks we need for 2014.
Rose Ann DeMoro – Executive Director, National Nurses United
(What will you be doing this time next year?) Same thing we’ve been doing: Fighting for a single payer health system, Medicare for all. We’re working with [Sen.] Bernie Sanders in Vermont on his campaign for single payer.
It’s incumbent on us to figure out a way to pay for it and how to get the ideological opposition groups out of the way. We see the Obama thing as essentially a setback in fighting for genuine reform. Obama says he is trying to figure out a way to provide health care for all, and the industry turns around and raises rates to make it unaffordable. We’ve done massive protests in an effort to get insurers to get rate increases rolled back. The problem is that Obama and the Democrats are bipartisan, but the right wing is not.
– Provided by Kaiser Health News.
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Initial jobless claims drop to 385,000
Washington, DC, United States (AHN) – Both the number of Americans filing first time jobless claims and the number filing ongoing claims have dropped, the Department of Labor announced Thursday.
Initial unemployment claims filed during the week ending March 12 were 385,000, representing a decrease of 16,000 from the previous week’s revised figure of 401,000.
The four-week moving average dropped to its lowest rate since July 2008. It was 386,250, a decrease of 7,000
Ongoing jobless benefits claims dropped by 80,000 to 3,706,000 during the week ending March 5, the most recent week for which data is available. That was below the 3,750,000 continuing claims economists had expected and it was the lowest number of continuing claims since September 2008.
Although the amount of time that individuals can claim jobless benefits varies by state, the maximum benefit period in 99 weeks. In addition, not every jobless American qualifies for unemployment benefits. The percentage of Americans covered by the unemployment insurance compensation program remained unchanged at 3.0 percent for the week ending March 5.
For the week ending Feb. 26, the number of people claiming benefits in all jobless programs was 8,953,610.
Extended benefits were available for the jobless in 35 states and the District of Columbia. Those states were Alabama, Alaska, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia and Wisconsin.
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Affordable Health Insurance- HHS unveils final design for insurance labels
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- BMW says sales in China helped it hit new record
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- Brake light, airbag issues prompt recall of 700,000 Toyota cars
- Volkswagen announces its annual profits doubled
- Chrysler posts $225 million profit
- GM back on top as world’s biggest automaker
- VW sells record 5.1 million cars in 2011
- Honda widens recall for airbag problem
- Budget Car insurance
- Oil at 9-month high on Iran export halt
- Employers added 243,000 jobs in January
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- U.S. housing prices show some gains
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