Medicare Privatization (and Occasional Reform)
What are the principles that Medicare should adhere to in the future?
Are Medicare (and Social Security) crucial to fending off poverty for future retirees?
How does privatization affect Medicare? Read Judith Stein's discussion on the Nieman Watchdog
For further information, follow one of the links below or scroll down the page.
DON'T "FIX" MEDICARE OUT OF EXISTENCE
Much of the current talk about the problems of Medicare misses the point. The proposals could end up "fixing" a successful program out of existence. Before supporting any fix, remember:
Medicare assures the elderly and people with disabilities that neither they nor their families will have to bear the full burden of their health care costs.
Seniors and people with disabilities appreciate Medicare and the uniform benefits it provides to everyone, regardless of income or where they live.
Medicare became necessary in the first place because health insurance companies were not meeting the needs of the elderly; that's why it was enacted by Congress in 1965.
Today, almost forty years later, private insurance companies still aren't interested in serving the elderly and disabled. HMOs have pulled out of markets, increased premiums, and cut benefits - despite evidence that they are paid enough.
Any efforts to reform Medicare should
Preserve a guaranteed set of benefits for all beneficiaries and include prescription drugs and long-term care services.
Provide plain and simple information about what Medicare covers, how to get necessary services, and what to do when individuals don't get the Medicare coverage or services they need.
Recognize the limits of private health insurance and managed care: they come and go depending on their economic interests. They are currently reducing access to services to Medicare beneficiaries, often leaving whole communities without a managed care option.
We must strive to make Medicare work for all by building on its established track-record of providing guaranteed benefits. Policy makers should make choices that keep Medicare a strong program with uniform benefits available to all beneficiaries.
Preserving a Structurally Sound Program for Tomorrow
A Position Paper from the Undersigned Organizations*
Introduction
The Medicare program is a success story. It reflects our national commitment to the concept of social insurance by providing one health insurance system with a defined set of benefits for our nation’s elderly and disabled. Any discussion of reforms to the Medicare program and responses to the Medicare Commission must begin with understanding this important commitment.
As stated by Nancy-Ann Min DeParle, Administrator of the Health Care Financing Administration (HCFA), United States Department of Health and Human Services:
Medicare is clearly a success story, an achievement of social insurance. And yet, as the millennium approaches, the program faces challenges that cannot be ignored. While the Balanced Budget Act of 1997 extended the solvency of the Medicare Part A Trust Fund, the broader, longer term challenge of meeting the complex health needs of an aging society is not diminished. The number of elderly is growing and their life expectancy is lengthening. In addition, the traditional Medicare benefit package, reflective of average indemnity plans in 1965, is less generous than most large employer sponsored fee-for-service plans. Gaps in coverage contribute to high out of pocket expenses relative to income for many seniors, particularly those with low incomes. Indeed, only about half of the elderly’s health care costs are paid for by Medicare. (Preface, A Profile of Medicare May, 1998)
Basic Tenets and Principles that Must be Observed
Medicare should continue to be a health care delivery and financing program provided and overseen by the United States government and not a mere set of payment mechanisms.
The Medicare program must include a secure, guaranteed, defined set of benefits.
Medicare should continue to provide one community of interests among the healthy and frail, rich and poor. It should not separate these beneficiaries into separate groups with distinct and varying interests by creating benefit options and delivery systems that differ depending upon the ability to pay or the beneficiary’s health status.
The Medicare program must provide equal access to appropriate and high quality services for all beneficiaries.
The needs of beneficiaries who have chronic, long-term conditions and disabilities must be formally recognized by the Medicare program and must be met by its coverage and payment structures.
The Medicare program must be administered fairly, efficiently, and consistently.
The Medicare program must be comprehensible to beneficiaries. An appropriate, ongoing education campaign should be developed that makes Medicare understandable to the average beneficiary.
Organizations providing Medicare managed care services must be required to provide full and clear information regarding their plans, their benefits, all the rights of participants, and all the costs related to the care.
The Medicare program must provide a full and fair appeals system which guarantees due process to beneficiaries if their health care services are denied, reduced, or terminated. The system must include access to the courts and an opportunity for attorneys fees in order to ensure that beneficiaries can obtain proper representation.
Medicare must provide an effective independent quality review system to ensure access and quality of care and services.
Concerns and Cautions
In considering programmatic change, planners should learn from the recent experience of implementing the Medicare+Choice program; beneficiaries were [ARE] confused by the Medicare+Choice program and unsure of its reliability as a set of health care delivery options.
Policy makers should remember that managed care plans have discontinued their Medicare managed care products in many markets, identifying lack of profitability and program uncertainty as reasons for leaving the Medicare market.
Deliberations about Medicare reforms should take into consideration the realities of beneficiaries who have lost services (or who have been unable to obtain services) as a consequence of new, more restrictive Medicare payment systems such as the Interim Payment System (IPS) for Medicare covered home health care.
The Medicare program should be structured so that "Medigap" insurance policies are unnecessary. If Medigap insurance does continue to be necessary, the policies must provide comprehensive, affordable coverage.
Policy makers should identify, address and monitor the scope of services provided and treatment options available to women and racial and ethnic minorities, and assure that Medicare reform efforts address the special needs of these populations.
Outpatient prescription drug coverage should be a Medicare benefit. This would not only provide for a critically needed benefit, it would also give beneficiaries a better opportunity to choose between managed care plans and "original" Medicare, since many individuals join managed care to obtain prescription coverage. Careful attention must be paid, however, to what is required in order to obtain this benefit.
Ideas for Further Study and Exploration
Policy makers should explore some new cost sharing provisions which do not adversely affect low to moderate income beneficiaries, and some new employer and/or employee contributions. New cost sharing and contribution mechanisms may be necessary, and may well be acceptable to the public, if the public understands that the alternative is the loss of a Medicare program to which everyone contributes and from which everyone benefits.
Policy makers should explore the advantage of combining Medicare Parts A and B, restructuring the Medicare premium, and lowering the eligibility age so that the risk pool includes individuals who will need less care and services while contributing premiums to the program. Similarly, efforts to raise the age of eligibility should be examined carefully to determine true cost savings, and to consider the likely impact these efforts would have on increasing the number of uninsured persons, decreasing access to services, and diminishing the good health and longevity of those who no longer qualify.
A significant portion of the budget surplus should be dedicated to help fund the Medicare program. If we have saved as a nation, we should use our savings for the nation’s future; the health care needs of our increasingly aged population must be a priority.
Medicare should explore strategies for incentive purchasing with providers who demonstrate a history of delivering appropriate access to high quality services.
Conclusion
The public should be informed of the dramatic changes envisioned by the Medicare Commission and should be given an opportunity to consider seriously whether they want these changes. As we continue the dialogue about Medicare solvency and reform, we must remember that the Medicare program is sound, and that it has served our nation’s elderly and disabled well. Again, as HCFA Administrator, Nancy-Ann Min DeParle, has stated:
[f]ew programs in the history of the United States have brought as much benefit to society as Medicare. Since its enactment in 1965, Medicare has provided access to quality health care for those Americans least likely to be attractive to private insurers – those over age 65, disabled, or with end stage renal disease. Medicare has also prevented many Americans from slipping into poverty. The elderly’s poverty rate has declined dramatically since Medicare was enacted – from 29 percent in 1966 to 10.5 percent in 1995. Medicare also provides security across generations: it has given American families assurance that they will not have to bear the full burden of health care costs of their elderly or disabled parents or relatives at the expense of their young families. (Preface, A Profile of Medicare, May 1998.)
Medicare must remain a strong and reliable program with specific benefits. It must be available to all eligible persons, irrespective of health or financial status. This must be our commitment. This must be our national goal.
Center for Medicare Advocacy, Inc.
National Senior Citizens Law Center
Consumer Coalition for Quality Health Care
National Academy of Elder Law Attorneys (NAELA)
Alzheimers Association
American Federation of State, County and Municipal Employees (AFSCME)
National Council of Senior Citizens
Connecticut Association of Area Agencies on Aging, Inc.
Medicare Advocacy Project, Greater Boston Legal Services
Legal Assistance to the Elderly (San Francisco)
Tennessee Justice Center
Samuel Sadin Institute on Law, Brookdale Center on Aging, Hunter College (NY)
Vermont Senior Citizens Law Project
Vermont Medicare Advocacy Project
Council of Vermont Elders
Connecticut Legal Services
Greater Upstate Law Project, Inc. (NY)
Neighbor to Neighbor
Northern California Lawyers for Civil Justice
Coalition of Wisconsin Aging Groups/Elder Law Center
National Health Law Program
______________________________________________________________________________
*Authored by the Center for Medicare Advocacy, Inc., the National Senior
Citizens Law Center, and the Consumer Coalition for Quality Health Care.
(3/3/99)
The Bipartisan Commission on Medicare completed its work on March 16, 1999 without reaching agreement on a recommendation to Congress about the future of Medicare. Having missed its initial deadline, the Commission declared itself unable to come to consensus on a set of recommendations.
The Commission’s only proposal, the Breaux-Thomas proposal, known as a "Premium Support" or "Voucher" program, creates great concern among both current and future Medicare beneficiaries because it:
Increases the age of eligibility from 65 to 67;
Does not strengthen the financial health of the Medicare program for the future, particularly for the "Baby Boomer" generation;
Does not limit out-of-pocket expenses that beneficiaries would have to pay when the premium support voucher is not enough to buy necessary health coverage;
Does not guarantee a defined and dependable benefits package;
Does not provide a stable and affordable premium structure for beneficiaries;
Does not set aside budget savings for Medicare solvency as requested by the President.
We must move on! Medicare remains a vital and successful program. Now is the time for dialogue and action. The debate has just begun, and we must help lead it.
We are left with an important opportunity to:
Further the health care financing debate;
Offer meaningful solutions;
Secure a complete, vital Medicare program for our families and loved ones.
Participate in this critical discussion. Help preserve Medicare as a national program which promotes the important value of ensuring basic health care for all of our elders.
For further information contact:
Alfred J. Chiplin, Esq. or Vicki Gottlich, Esq. ,
Center for Medicare Advocacy, Inc.
1025 Connecticut Ave., NW Suite 709
Washington, DC 20036, (202) 293-5760
MEDICARE REFORM PROPOSALS ARE COSTLY TO MEDICARE BENEFICIARIES
Current Medicare reform proposals will mean more costs and fewer benefits for older people and people with disabilities.
Current efforts to reform Medicare focus on turning Medicare into a program like the federal government's health care program. Under that program, federal workers have to choose each year the health plan they want - without any guarantees that benefits and costs will stay the same.
If Medicare is turned into the same kind of program:
Beneficiaries will pay more: Medicare will pay only a set amount for health care. The amount will be determined by a bidding process to get the lowest rate. Plans that offer better service or that are open to beneficiaries in rural and other hard to serve areas will cost more. Beneficiaries will foot the extra cost.
Benefits will not be guaranteed: Most people will get their Medicare through HMOs. These plans will be able to change their benefit package and move in and out of markets yearly, just as they do now. There will be no guarantee from place to place or year to year that Medicare benefits will remain the same.
Prescription drug coverage will not be universal: Only higher option, more costly plans will be required to offer prescription drug coverage. The plans will get to determine what drugs they cover and how much each prescription will cost the beneficiary. Prices and drug coverage will vary from plan to plan in different parts of the country. And more plans may so what a few HMOs have begun to do now - set co-payments for prescriptions so high that the beneficiary pays the full cost of the prescription.
DON'T BE FOOLED! The Medicare reform proposals being talked about in Congress now will not give beneficiaries what they want - a secure Medicare program with expanded benefits, including prescription drug coverage.
TRUE MEDICARE REFORM MEANS ASSURING THAT MEDICARE REMAINS A RELIABLE, UNIVERSAL PROGRAM WITH GUARANTEED HEALTH CARE BENEFITS, INCLUDING PRESCRIPTION COVERAGE.
Copyright © 2008 Center for Medicare Advocacy, Inc.