March 31, 2015

Insight 11. Medicare Helps Low Income People

Of the 54 million people with Medicare, a staggering 25% have annual incomes below $14,400. For these people living in retirement, or coping with a disability in poverty, Medicare coverage offers a lifeline, a chance to get needed health care. That precious red white and blue Medicare card means that a doctor will see you, a physical therapist will help you recover from a stroke and much more. But that lifeline disappears if you can’t afford to pay your $105 monthly Medicare Part B premium, or your $1260 hospital deductible, or if you have 10 prescriptions that need filling, each with a co-pay of $20 or $30.

Fortunately, the Medicare lifeline does work for many people in poverty, but only because safety net programs work together with Medicare to plug coverage gaps and make the Medicare benefit affordable. The Medicaid program covers Medicare premiums, deductibles and co-payments. Enrollees in full-scope Medicaid receive Medicaid long-term services along with coverage of their Medicare costs; those who qualify only for Medicare Savings Programs – operated by state Medicaid agencies and generally offered to people with incomes slightly higher than full Medicaid cut-offs – get help with their Medicare costs but do not get other Medicaid services. Today fully twenty percent of Medicare beneficiaries rely on Medicaid-funded programs for Medicare premium or cost-sharing assistance. In addition, the Low Income Subsidy, known as “extra help,” provides relief to about 11 million beneficiaries who otherwise could not afford Medicare prescription drug program premiums, deductibles and co-pays. That subsidy also protects low income beneficiaries from falling into the infamous donut hole.

Dual eligibles, people who qualify for both Medicare and Medicaid, need these safety net programs to remain strong and to grow. When states seek instead to narrow Medicaid eligibility standards, they not only are cutting off people from needed Medicaid services, like long-term services and supports, but also are effectively making it impossible for dual eligibles to use their Medicare. Medicare is a benefit that many earned working their whole lives at low-paying difficult jobs. Like other workers, they saw their Medicare contributions deducted from each and every paycheck. We at Justice in Aging are committed to working with the Center for Medicare Advocacy and other advocates to ensure that all Medicare beneficiaries, especially those who most need what Medicare can provide, can afford to use the benefits to which they are entitled.

You can read more about Justice in Aging, Medicare and low income beneficiaries at http://justiceinaging.org/our-work/healthcare/dual-eligibles-california-and-federal/.

You can read all of the Center for Medicare Advocacy's Medicare Insights at: http://www.medicareadvocacy.org/medicares-50th-anniversary/#Insights.

March 27, 2015

“Doc Fix” Package Passed by House Takes Too Much from Beneficiaries with Too Little In Return

Today, March 26, the House of Representatives passed the Medicare Access and CHIP Reauthorization Act of 2015 (H.R. 2). While the Center for Medicare Advocacy believes it’s in the best interest of Medicare beneficiaries to find a permanent solution to the broken physician payment formula called the “Sustainable Growth Rate” (SGR), this Bill is not the answer. Unfortunately, the SGR replacement package passed by the House is not sufficiently balanced; it asks too much from beneficiaries without providing enough in return. It asks nothing from pharmaceutical or insurance companies. It furthers Medicare’s march toward privatization by increasing costs for beneficiaries for traditional Medicare and Medigap plans.

Of the portion of the SGR package that will be offset, roughly half (approximately $35 billion of the total $70 billion over 10 years) would come from Medicare beneficiaries through changes that will increase their out-of-pocket costs for health care, including:

Adding deductibles to Medigap plans purchased by new Medicare beneficiaries starting in 2020;
Further means-testing premiums for higher-income beneficiaries; and
Overall increases in Part B premiums.

While the SGR package would make the Qualified Individual (QI) program permanent, which we strongly support, and would minimally increase and temporarily extend important funding for low-income education and outreach, it does not address other issues that serve as barriers to care for beneficiaries. For example, instead of repealing the annual outpatient therapy caps, the anemic exceptions process is merely extended for another two years, and instead of addressing hospital observation status, the bill simply further extends enforcement of the so-called “two-midnight” rule.

In short, Medicare beneficiaries would pay too much, with too little in return. Major industries pay nothing, and stand to gain a great deal. As the SGR bill now moves to the Senate, we hope further balance and improvements for beneficiaries can be made.

For more information, see the Center’s March 24th Press Release here: http://www.medicareadvocacy.org/analysis-of-sgr-legislation-from-the-center-for-medicare-advocacy/.

March 19, 2015

With billions in the bank, Blue Shield of California loses its state tax-exempt status

Score another one for CA!

Comment by Don McCanne of PNHP: Many of us in California were very upset when Blue Cross of California converted to a for-profit (WellPoint, then Anthem) and immediately changed its behavior to fulfill its responsibilities to its shareholders as a profit-making business. We immediately saw “insurance innovations” that redirected its business goals from taking care of patients to taking care of shareholders.

It was particularly disappointing to see non-profit Blue Shield of California adopt similar insurance innovations in order to remain competitive in the California insurance market. From the perspective of health care “consumers,” Blue Shield and Blue Cross remained virtually indistinguishable.

Blue Shield of California has annihilated the dream of those who believed that the United States could adopt a universal system of private, non-profit insurance companies like they have in Switzerland. There are many serious problems with the Swiss model, but some believed that a market of well-regulated, non-profit insurers would make optimal patient care a priority. Blue Shield of California has now demonstrated to us that this pipe dream would only become another nightmare in the saga of private insurance markets in the U.S.

March 4, 2015

Economists Throw Weight Behind Universal Health Care in Vermont

http://www.commondreams.org/news/2015/02/26/economists-throw-weight-behind-universal-health-care-vermont

It is not only possible, but financially and economically advantageous to implement a publicly financed healthcare system in Vermont, according to an open letter signed by more than 100 economists and delivered Thursday to lawmakers at the Vermont State House.

"As economists, we understand that universal, publicly financed health care is not only economically feasible but highly preferable to a fragmented market-based insurance system," reads the letter, whose signatories include Dean Baker of the Center for Economic and Policy Research; Richard Wolff of New School University; and Julie Nelson of the University of Massachusetts-Boston.

It continues: "Health care is not a service that follows standard market rules; it should be provided as a public good. Evidence from around the world demonstrates that publicly financed health care systems result in improved health outcomes, lower costs and greater equity."

In December, Vermont Gov. Peter Shumlin abruptly abandoned his much-lauded plan to create a single-payer healthcare system in the state, saying moving forward with the proposal would be too costly.

But the economists' letter, presented in tandem with a report (pdf) from the the Vermont Workers' Center and the New York-based National Economic and Social Rights Initiative (NESRI), shows that that universal health care can be implemented—affordably—in Vermont within the next few years.

"By moving from private, market-based insurance to public financing of universal care," said Anja Rudiger of NESRI, "we flip the way we pay for care: people contribute based on their ability, so that low- and middle-income people pay a small

March 4, 2015

With Private Health Insurance, Waste Is Revenue

http://www.counterpunch.org/2015/03/02/five-years-in-hows-the-affordable-care-act-doing/

In addition, the complexity of plans, each with its own marketing, paperwork, enrollment, premiums, rules and regulations, also contributes to an enormous administrative cost overhead.

I spoke about this with James G. Kahn, M.D., MPH, who is a researcher at the Philip R. Lee Institute of Health Policy at the Univ. of Cal., SF, and senior author of a recent study analyzing grotesquely excessive administrative costs of insurance companies and how it diverts several hundred billions of dollars annually from actual hands-on medical treatment.

What appears as wasteful to the normal person such as the enormous resources devoted to complicated billing and other insurance related activities (BIR), as documented by Dr. Kahn, is considered as income and revenue by insurance companies because they charge for these excesses.

Thus, extravagant squandering of funds and resources is endemic to the business model of insurance companies and precisely because it adds to their bottom line, there is no incentive to eliminate the bureaucratic discombobulation.

Healthcare economics scholar Uwe Reinhardt expressed his exasperation even before ACA in his Nov. 19, 2008 testimony to U.S. Senate Finance Committee: “900 billing clerks at Duke with 900 beds. Not sure we have a nurse for each hospital bed but we have a billing clerk. It’s obscene.”

This chronic problem has grown with ACA.