Medicare -Who Pays and How Much- Part II
(8/10/10)- In a report that was issued by the Medicare trustees, it was determined that the Medicare hospital trust fund would be exhausted by 2029, 12 years later than last year's projection.
The trustees predicted that the Social Security trust fund would be exhausted in 2037, the same year as projected last year.
Because inflation remains low, the report said, Social Security beneficiaries will probably not receive a cost-of-living (COLA) increase adjustment in 2011, just as they did not receive one this year.
Social Security commissioner Michael J. Astrue stated, that continuing tax revenue would still be sufficient to pay more than 75% of benefits even after exhaustion of the trust fund.
For the first time, money flowing out of the Social Security program this year exceeded money flowing in. A combination of high unemployment, meant less funding coming into the program, and an aging population leading to more people becoming beneficiaries under Social Security was the main reason for this to happen.
Many are calling for an increase in age for eligibility for Social Security entitlement, or reduced benefits. A bipartisan panel, created by President Obama, is due to make its recommendations to him by December 1, as to the steps that should be taken to ensure the solvency of Social Security.
The trustees report on the solvency of Medicare assumes that Medicare will cut payment rates for doctors' services by 23% on December 1, and by a further 6.5% on January 1, as required by the law, but this has never happened before, nor will it happen on those date either, based on past history.
(7/9/10)- President Obama will bypass Congress and make a "recess appointment" making Dr. Donald M. Berwick head of the Centers for Medicare and Medicaid Services (CMS). Please see our item dated 6/8/10 below for more on this matter.
As a recess appointee, Dr. Berwick will have all the powers of a permanent appointee, but as called for under the Constitution, his appointment will expire at the end of the next session of Congress, in late 2011
(6/26/10)- It took them a while, but on Thursday the House, voting 417 to 1, approved the six-month suspension of the required Medicare 21.5% cut of payments to medical professionals that we discuss in our item dated 6/20/10; 6/14/10 et. al. below.
This charade that goes on every year must come to an end. This time however it will be extra costly since Medicare personnel will have to review all claims submitted after June 1, wherein the required cuts took place.
(6/20/10)- Even though the Senate passed the legislation needed to prevent the cut in payments to doctors under Medicare law, it was too late to prevent Medicare from processing the cuts to doctors who have already submitted their June claims. That is because the House has yet to act on the legislation that would have prevented the cuts, and the House can not act on the matter until next week at the earliest.
That means that doctors, nurse practitioners, physical therapists and other providers who billed after May 31,under the Medicare's physician fee schedule will have to resubmit their claims if they want to be made whole. The billings affected by the cut cover the early part of this month. Congress had previously acted in delaying the cuts that were required until the end of May.
The bill passed by the Senate delays the cuts until the end of November, when the elections are out of the way. The Senate approved the measure by a voice vote Friday night, after failing to pass a larger package of fiscal measures the night before. It did not have the required 60 votes to end a Republican filibuster.
The bill passed by the Senate would increase payments to medical providers by 2.2%, and costs about $6.5 billion. It would be paid for through a series of health care and pension changes that both the Democrats and Republicans had agreed to.
(6/14/10)- In our item dated 10/19/09 in Part I of this article, we discuss the fact that the formula for payment to doctors under the Medicare law calls for a cut of 21.5% effective June 1, 2010. There has never been a cut in doctors' payments, even when the formula called for one, in the history of Medicare.
Under pending legislation, this cut would be blocked, and would be replaced by a 2.2 percent increase, at a total cost of $23 billion for the balance of this year, and an additional increase of 1 percent next year.
President Barack Obama in his weekly radio address has called for approval of the increase, and expressed a desire to deal with the formula in a more realistic way in the future.
If you increase the deficit that Medicare is operating under, the premium that beneficiaries pay for belonging to Part B would have to be substantially increased next year to alleviate this problem.
(6/8/10)- Department of Health and Human Services (HHS) secretary Kathleen Sebelius strongly backed President Barack Obama's choice of Dr. Donald Berwick (63 years of age) to become the next head of the Centers for Medicare and Medicaid Services (CMS). That position has been vacant since 2006 after Democrats blocked the confirmation of the Bush administration's nominee.
Several Republicans have indicated that the strongly oppose the nomination.
The American Medical Association plans to send letters of support for the nomination to Congressmen, and 116 health-related groups have already signed a letter to Senate leaders supporting his nomination.
Dr. Berwick delivered the commencement address at the Yale School of Medicine, where his daughter was among the graduates. He is a Harvard Medical School pediatrician and health-quality advocate
(4/5/10)- President Barack Obama has selected Dr. Donald Berwick to become the new head of the Centers for Medicare and Medicaid Services. This position has been vacant for the last years.
Dr. Berwick runs the Boston-based Institute for Healthcare Improvement and is a pediatrics and health-policy professor at Harvard University.
He has focused on improving patient safety, and increased usage of technology in the medical field. He has also worked as an executive at a Massachusetts health-maintenance organization.
Under the terms of the recently enacted health-care reform act, Medicaid coverage will greatly expand coverage starting in 2014. The program is expected to add 16 million Americans by the end of the decade.
One of the biggest hurdles facing Dr. Berwick is the fact that even though more Americans will be covered under the Medicaid program, more than $400 billion in cuts must be instituted in the coming decade.
(1/25/10)- Under Medicare law Part B premiums are required to cover about 25% of the average cost of Medicare Part B services incurred by the enrollees. There are about 42.3 million Americans covered by Medicare Part B, of which about 73% also receive Social Security payments.
Under the Social Security Act's "hold harmless" provision, Medicare can not pass along to Social Security beneficiaries a premium hike that is higher than the increase they would receive through Social Security's annual cost-of-living increase.
For the year 2010 and most likely for the year 2011, there was no cost of living increase (COLA) for Social Security beneficiaries
Since Medicare Part B premiums would not cover the 25% cost of Medicare, the remaining 27% of those covered by Medicare and not receiving Social Security payments must make up for the difference. This group unfortunately includes those Medicare Part B beneficiaries who are joining for the first time.
The affected beneficiaries include the 3% of Medicare Part B recipients who are celebrating their 65th birthday this year, and also the 2% who started collecting Social Security earlier than their "full retirement age". This also includes however, those who postponed getting their Social Security payments past their "full retirement age", since it meant an increased lifetime payment for each year they delayed receiving their payment until they reached the age of 70.
For those falling into this category, Medicare Part B premiums are $110.50 per month instead of the $96.40 per month for lower income beneficiaries. Higher income earners will also be paying higher premiums because of this quirk in the law.
(1/11/10)-The following is the 2010 schedule of what a Medicare beneficiary pays during a skilled nursing facility residency (From Medicare and You-2010):
Under Part A- the following is what a Medicare beneficiary must pay during a hospital stay:
Under Hospice Care:
Medicare doesn't cover room and board when you get hospice care in your home or another facility where you live (like a nursing home)"
Under Part B:
Premiums for Part B will stay the same as for 2009, although higher income beneficiaries will be paying a higher premium than the $96.40 a month level. For new enrollees in Medicare the premium will be at least $110.50 per month. Please see our item dated January, 2010 to see why this situation arose.
For individuals who earn $85,000 or less and for couples who earn $170,000 or less the premium for Part B is $96.40 per month for Medicare Part B coverage.
For individuals earning $85,001 up to $107,000, or couples earning from $170,001 to $214,000 the premium will be $134.90. For individuals earning from $107,001 to $160,000, or couple earning from $214,001 to $320,000 the premium is $192.70. For individuals earning from$160,001 to $213,000, or couples earning from $320,001 to $426,000 the premium is $250.59 and for individuals earning $213,001 or above and couples earning $426,001 or above the premium is $308.30
New enrollees in Part B will pay 15% more than that, $110.50 a month.
Benefit Period
A " benefit period" starts when the beneficiary first enters a hospital and ends when there has been a break of at least 60 consecutive days since inpatient hospital or skilled nursing care was provided. There is no limit to the number of benefit periods covered by Part A during a beneficiary’s lifetime; however, inpatient hospital care is normally limited to 90 days during a benefit period and co-payment requirements ($267 each day)apply for days 61 through 90. If a beneficiary exhausts the 90 days of inpatient hospital care available, he or she can elect to use days of Medicare coverage from a non renewable "lifetime reserve" of up to 60 total additional days. Once used up the 60 days is gone forever. You are responsible for the co-insurance amount of $438 per day while using up this 60 day "lifetime reserve".
(11/2/09)- Most Medicare eligible beneficiaries should have received their copy of the 2010 "Medicare and You" handbook, which is issued by the government to help you understand any changes made in Medicare and Medicare Advantage plans.
As a quick reminder, there is Medicare Part A, which covers hospitalization and is provided at no charge to enrollees, and Medicare B, which covers fees from doctors and other health care providers, and requires a monthly premium. Premiums for Part B will stay the same as for 2009, although higher income beneficiaries will be paying a higher premium than the $96.40 a month level. For new enrollees in Medicare the premium will be at least $110.50 per month. Please see our item dated January, 2010 to see why this situation arose.
For individuals who earn $85,000 or less and for couples who earn $170,000 or less the premium for Part B is $96.40 per month for Medicare Part B coverage.
For individuals earning $85,001 up to $107,000, or couples earning from $170,001 to $214,000 the premium will be $134.90. For individuals earning from $107,001 to $160,000, or couple earning from $214,001 to $320,000 the premium is $192.70. For individuals earning from$160,001 to $213,000, or couples earning from $320,001 to $426,000 the premium is $250.59 and for individuals earning $213,001 or above and couples earning $426,001 or above the premium is $308.30
New enrollees in Part B will pay 15% more than that, $110.50 a month.
Straight Medicare covers about 35 million beneficiaries, and they need not do anything if they feel their coverage is sufficient. If however, a beneficiary wants to have prescription drug coverage he or she must enroll in Part D. About 17.5 million Medicare beneficiaries have enrolled in Part D coverage.
Since there will not be an increase in the Social Security cost-of-living increase in 2010, premiums will remain the same for Part B coverage.
The annual enrollment period for Medicare begins on November15th and runs through December 31, 2009. Insurers have been sending out their promotional material since October 1.
If you did not sign up for Medicare Part D when you were first eligible to be covered by it, you will be assessed a 1% penalty per month if and when you do sign up, unless you had creditable prescription drug coverage under another plan.
To see more about Medicare Advantage, please see our article on this topic. There are about slightly less than 11 million Medicare beneficiaries who belong to Medicare Advantage plans.
If you need assistance in making your choices you can go to the Medicare site or call or visit your State Health Insurance Assistance Program, known as SHIP, which is run by the government. Counselors provide information and help you compare plans at no charge. To find the SHIP in your state, to to www.hapnetwork.org/ship-locator.
To see Part I of the article Medicare -Who Pays and How Much-Part I
FOR AN INFORMATIVE AND PERSONAL ARTICLE ON PRACTICAL SUGGESTIONS WHEN SELECTING A NURSING HOME SEE OUR ARTICLE "Selecting a Nursing Home"
By Allan Rubin
updated August 10, 2010
e-mail: hrubin12@nyc.rr.com or rubin@brainlink.com