Medicare and Health Care Reform
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.
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private medicare: too much for taxpayers, too little for beneficiaries
When Medicare was created in 1965 over 50% of everyone 65 or older had no health insurance. Private insurance failed to meet their needs. Medicare, on the other hand, is a success. It increased the number of insured older adults to 95%. In 1972 Medicare coverage was extended to people with significant disabilities. But Medicare's success in providing access to health care for millions of people is in danger. Ironically, the threat comes from private insurance plans. Funded by windfall subsidies from taxpayer dollars, privatization is jeopardizing the cost-effective, dependable Medicare program.
Since 2003 the number and costs of private Medicare plans have increased exponentially as a result of the design of Medicare Part D and "Medicare Advantage". Unlike plans to privatize Social Security, which were debated and largely rejected by lay people and professionals alike, the privatization of Medicare is well underway and has occurred largely without public knowledge or discussion. Medicare privatization and the billions of dollars being spent to subsidize private plans threaten the future of Medicare and the health and economic security the Medicare public program has provided for America’s older and disabled people and their families.
Medicare wasn't broken, but because of the ever-increasing private Medicare options, it is breaking. The myriad private plans are creating confusion and barriers to care for real people. The Center for Medicare Advocacy is contacted everyday by people who were inappropriately marketed to, people who did not understand what they were getting into, people who have been unable to get the health care services they need from their Medicare Advantage (MA) plan, and people who are "locked into" their MA plan. Further, the Center gets calls for help from people who thought they had MA "on top of" their regular Medicare and/or Medigap and are surprised to find out that is not true when the service or provider they need is not covered by their MA plan.
Medicare privatization costs taxpayers approximately $15 billion a year, while it hurts many people with Medicare and strangles the traditional Medicare program. Consider these stories from just a few of the Center’s clients:
Mrs. P is a 67 year old woman who
was diagnosed with ALS three years ago. She contacted the Center for help
because her private Medicare plan cut off all her home care, saying she was
"stable" and no longer needed home health services. CMS said the coverage
decision was up to the plan and would not intervene. The Center for Medicare
Advocacy filed a case in federal court seeking continued coverage for Mrs.
P. The Court ordered Medicare to cover Mrs. P.’s home care; she was
therefore able to stay at home with the health care she needs. Without
Medicare coverage and this necessary home care, Mrs. P. would have been
forced to enter a nursing home.
A Congressman called the Center
to obtain help for a constituent who he met at a local town hall meeting.
Mr. B and his wife were members of a Medicare Advantage plan in
Connecticut. They went to Florida for vacation where Mrs. B fell and was
sent to the hospital to treat her injuries. Tests at the hospital showed
that, unbeknownst to Mrs. B, she had a brain tumor. Doctors determined she
needed treatment immediately. Because Mr. B is frail himself and the
couple’s daughter in Utah is a nurse, they decided to go there for Mrs. B’s
chemotherapy. Upon receiving the chemotherapy, however, Mrs. B had a life
threatening reaction that resulted in her being in the Intensive Care Unit
for days. She ultimately died. The hospital bill came to $100,000 and was
completely denied by the Medicare Advantage plan because Mrs. B was "out of
network". The Center appealed. Finally, after an administrative hearing
most of the bill was paid in recognition that the care received after Mrs.
B’s reaction to treatment were emergency services.
Mrs. W called us with a Medicare
Advantage (MA) problem. She went from a hospital to a nursing home and was
being billed for $13,000 because the nursing home was out of her MA plan’s
network. She had been told by both the hospital and nursing home staff that
original Medicare would cover her nursing home stay, even though she had an
MA plan. This is not true. The beneficiary herself is extremely confused
and was unable to answer any of the Center attorney’s questions.
The Center has a case pending for
an individual who is in an MA plan in Connecticut and went out of network
for doctor’s services. He was billed $5,000 for these services. This
individual is functionally illiterate and did not understand that he could
only see providers in the plan’s network when he signed up for the MA plan.
He says he did not receive any booklets or anything in writing from the MA
plan regarding the network’s providers. Even if he did, he likely wouldn’t
have been able to read the information or comprehend the concept of a
A Center attorney received a call
from a woman with significant MA concerns. She and her husband were visited
by an MA marketing representative for a Private Fee For Service Plan (PFFS).
He came door to door and was absolutely not invited. The woman told our
attorney that both she and her husband suffer from brain injuries and
previous strokes and that they were both distressed when the agent came into
their home. He told them that he wanted to talk to them about a "new kind
of Medicare." She said that she listened but did not understand and that he
gave too much information too fast. She said she filled out the form he had
and said yes to all of his questions just to get him to leave her home; this
all happened in January, 2007.
When the woman called the marketing representative to disenroll the representative told her to just send a letter to the plan and that would effectuate disenrollment. She did so in January but had not been disenrolled when she contacted the Center six months later. During that time, she and her husband needed and received medical services, for which they were billed and sent to collection. The husband requires injections from an oncologist which cost $3000 each; he needed three during this period. Other services received during the period included doctors’ visits, a hospital CT scan, neurologist visits, and endocrinologist visits.
one of the Center’s clients had traditional Medicare along with a Medigap
supplemental policy. He was approached by an MA plan while at his dialysis
unit, which is now a marketing violation. He was told that the MA plan and
the Medigap policy together would cover all his expenses. Mrs. N called the
Center because they are now receiving bills for the balance of what the MA
plan did not cover. When she contacted the Medigap representative, he told
her that because she now is in an MA plan, the Medigap won't cover the
balance. Mrs. N then called the MA plan to disenroll because she is worse
off than before joining the MA. They told her she
couldn't disenroll at this time.
The Center is working to retroactively disenroll Mr. N from the MA plan based upon the misinformation that he was given by the marketing representative. Hopefully, if the retroactive MA disenrollment is granted, the Medigap policy will provide retroactive coverage for the past bills.
A Center attorney received a call
from the daughter of a beneficiary who speaks very little English.
Apparently an agent from an MA plan in Hartford, CT came door-to-door
without being invited (which is a marketing violation), visited this woman's
mother and got her to sign an application. The representative told the
mother that everything would be "free". The daughter called the plan and
was able to get her mother disenrolled. But, Social Security is still
deducting the monthly premium for the MA plan from her mother's Social
Security check so she called the Center to get help with the premium
problems. Her mother needs the money.
was contacted by the daughter of a woman who signed up for an MA plan.
Apparently representatives from the MA plan called and asked if they could
come to the mother's home. She, and the daughter, visited with the
representatives and made it very clear that what they were looking for 100%
coverage of the mother's dialysis treatments. The representatives told them
that if she signed up her dialysis treatments would be covered 100%. It
soon became clear to the mother and daughter that the plan only covers 80%
of dialysis treatments, the same as traditional Medicare. In addition, it
became clear that the plan never should have offered to sign her up in the
first place because she has ESRD which precludes her from signing up for
Another gentleman called the Center. He was visited by an MA plan and was told that the plan was "free" - which it is not. He received a letter from Social Security stating that $46.00 would be deducted from his Social Security check. This is how he found out that the plan was not "free.""
"Medicare Advantage" is starving the successful traditional Medicare program and hurting beneficiaries. Studies by MedPAC, the Congressional Budget Office, and the Commonwealth Fund and numerous scholars confirm that taxpayers are spending between 12% – 19% more on private plans than it would cost to serve the same people in the traditional Medicare program. Meanwhile, private Medicare has proven far less able to provide secure health insurance and a wide choice of doctors and other health care providers for older people and people with disabilities.
Medicare was enacted in 1965 because private industry failed to insure more than 50% of older people. It would be ironic if privatization condemned Medicare now, returning older and disabled people to the vagaries of the private, for-profit insurance industry.
The solution for the Medicare crisis is not to increase the eligibility age or decrease benefits, but to stop privatizing it at the expense of older people and taxpayers.
Judith Stein • Center for Medicare Advocacy, Inc.
October 15, 2008
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 has been a success
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, over 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 more than 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*
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.
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)
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)
A CALL FOR ACTION
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
Copyright © 2010 Center for Medicare Advocacy, Inc.