Saving Medicare: watching our back while looking forwards Laura S. Boylan, MD Assistant Professor of Neurology Bellevue Hospital Center, New York University School of Medicine
Medicare Prescription Drug Improvement and Modernization Act of 2003 "With the Medicare Act of 2003, our government is finally bringing prescription drug coverage to the seniors of America. With this law, we're giving older Americans better choices and more control over their health care, so they can receive the modern medical care they deserve. . . Our nation has the best health care system in the world. ” President George W. Bush, White House Press Release, 12/08/2003
Top 3 things you don’t know about MMA 2003 that can hurt you…. 1. Means testing 2. The 45% cap 3. Medicare Advantage
Means Testing • 1/1/2006, Higher Part B premiums for those earning over 80 K. • For individuals with incomes over $200, 000, the premium, now $88. 50 a month, is expected to quadruple by 2009 • More generous Part D benefit for low income seniors
45% Supplementary Medical Insurance (SMI) Hospital Insurance (HI) Part A $$$$$$$ Payroll tax 2. 9% 1. 45% employers 1. 45% employees Outpt Svcs (Part B) $$ Tax on SS benefits $$ trust fund interest $$$$$$ General Revenue accounts for 75% of SMI but less than 45% of total support for Medicare. MMA 2003 caps General Revenue at 45% of total expenditures. Since Part D largely expanded SMI it accelerates the arrival of the cap. The cap will lead to increased premiums and/or decreased benefits. Joint Economic Committee May 2006 Economic Fact Sheet, highlights of MCR trustees report Pharmacy (Part D) $$ Beneficiary premiums
Medicare Basics Medicare & You 2007, CMMS Original Medicare Plan Medicare provides this coverage. Part B is optional. You have your choice of doctors. Your costs may be higher than in Medicare Advantage Plans like HMOs and PPOs Private insurance companies approved by Medicare provide this coverage. Generally, you must see doctors in the plan. Your costs may be lower than in the Original Medicare Plan, and you may get extra benefits.
Medicare Advantage Plans • Private plans • Cost on average 11% more per beneficiary than traditional medicare despite selective enrollment of the healthy • Annual additional cost of $5. 4 Billion dollars
Key Events in Medicare Privatization • • Medicare enacted 1965 Limited private plan offerings 1966 -1985 Medicare risk (HMO) authorized 1982 Medicare + Choice program adopted, 1997 Balanced Budget Act • Balanced Budget Refinement Act 1999 “health adjusts” HMO payments • Medicare Modernization Act 2003
www. whitehouse. gov reimbursements, Plans withdraw MMA 2003
Misc Pet Peeves • With MMA Medicaid/Medicare dual-eligibles lost Medicaid Rx coverage and were forced into Part D • Part D plans can negotiate with drug manufacturers, but they need not pass on their savings to beneficiaries • The joy of “Choice”/the fear of “Bamboozle”
Looking Forwards: Role of Private Health Insurance • Budget busting has been acceptable if it supports privatization • Cost effectiveness and equity of traditional Medicare over private insurance has been demonstrated • Importance of one risk pool, universal buy in • If taxpayers will pick up the tab for the sickest and poorest, let’s pick up the revenues from the healthier and wealthier
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