(7/17/08)- President George W. Bush vetoed the Medicare bill that we wrote about in our item dated 7/16/08, but both houses of Congress voted to override the veto, so the bill is now the law. For more information on some other provisions of the new law please see our article dated 7/18/08 on Medicare-Who Pays for What.

The vote in the House was 383 to 41, with 153 Republicans voting in favor of overriding the president's veto. In the Senate the vote was 70 to 26, with 21 Republicans voting in favor of overriding the veto.

This is the fourth time that a bill has been enacted in Congress overriding President Bush's veto. Two of the previous overrides occurred in connection with farm bills and the third one was on a water-project bill.

The new law will cost around $20 billion over 5 years. Beneficiaries will see a cut in their out-of-pocket costs for mental health services, as well as some new coverage, including for certain classes of drugs often used to treat anxiety and insomnia.

Medical equipment manufacturers will get a delay in a competitive bidding process for suppliers of equipment such as oxygen tanks and power wheelchairs. The bill cuts extra payments that currently go to Medicare Advantage plans based on local costs for care at teaching hospitals, and imposes new limits on private-fee-for-service plans.

Under the Medicare formula, doctors will be faced with a 20% cut in their fees in 18 months Instead of a 10.6% cut under the formula that was to go into effect on July 1 of this year there will be a 1.1% increase for physicians fees. Medicare Advantage insurers will be cut by 2% under this new bill.

The bill also sets strict standards for the marketing of private plans, to curtail high-pressure sales tactics that have prompted complaints from beneficiaries and state insurance regulators.

(7/16/08)- In early July the House passed a bill to prevent the Medicare 10.6% pay cut to physicians by a vote of 355 to 59. Senate Republicans barely blocked efforts to take up the bill by 1 vote. During the July 4^th recess holiday the American Medical Association ran an ad supporting the bill in the home state of 10 Republican Senators who had previously voted against it.

The Senate Democrats won a decisive vote by a margin of 69-30 to cut off debate on the bill after the recess for the holiday ended, with Senator Ted Kennedy (D-Mass.) making his first appearance on the floor of the Senate since his recent bout with cancer was announced, and casting his vote for the bill.

A number of Republican Senators targeted by the ad from the AMA supported the bill after having previously voting against it. Besides heading off the cut to doctors' fees for 18 months, the bill gives the physicians a1.2% increase. The bill would also increase payments to physicians who make the switch from handwritten prescriptions to digital ones, then docking doctors' fees in later years if they fail to adopt the technology.

The bill would cut payments to Medicare Advantage and Private-Fee-for Service providers by 2 %. Because of the cut to Medicare Advantage and PFFS insurers, the president has threatened that he will veto the bill.

(7/2/08)- According to a spokesman for the CMS, Medicare will delay processing doctors' claims until July 15th, thus enabling Congress to pass legislation that would block the scheduled 10.1% cut to their fees that was to go into affect on July 1. When, as and if Congress passes the needed legislation it can be made retroactive so that the doctors will not have their fees cut. If the legislation contains cuts to Medicare Advantage insurers, the president has threatened to veto such legislation, since he is desirous of expanding that program.

(6/28/08)- Medicare spent $12 billion in 2007 on the targeted population for special needs plans, or about 15% of the $80 billion for all Medicare Advantage plans, according to Joseph Kuchler, a spokesman for the Centers for Medicare and Medicaid Services.

All Medicare Advantage insurers are paid based on how sick a patient is, and the special-needs plans tend to have higher portions of sick enrollees.

The battle between the president and the Democratic congressmen continues as to cuts to be made to Medicare Advantage plan allowances from the government in order to be able to avoid the required cut in physician fees mandated by the law. The president would like to continue to expand Medicare Advantage plans, while the Democrats feel that Medicare Advantage plans are being overpaid at the expense of the government and the taxpayers.

As things stand now, physicians face an over 10% cut in theiir allowable Medicare fees effective July 1. It is unlikely that Congress will act in time to change anything by July 1, but any change made in fees can be made retroactively, so that changes in payment can be made after that date.

For more info on the proposed cut to physicians fees under Medicare please see our item dated 12/21/07 below.

(6/15/08)- Medicare Advantage enrollment grew to 10.1 million as of the report through May 9, 2008 for the June 1 effective date. This figure represents an 11.7% increase since December 1, 2007.

Special Needs Plans (SNP) membership was 1.2 million in the June report, which represents 11.8% of total Medicare Advantage membership. Employee plan membership now represents 17.3% of total Medicare Advantage membership.

(6/4/08)- Enrollment in Medicare Advantage plans grew to 10 million as of the report through April 11, 2008 for May 1 effective date. This is the first time that the number of enrollees in Medicare Advantage plans has grown to 10 million. This figure represents an 11.2% increase since December 1, 2007.

In this latest report the Centers for Medicare and Medicaid Services included the fact that for the month of May, Special Needs Plans (SNP) membership represented 11.6% of the total number of Medicare Advantage membership while employer plan enrollees represented 17.3% of total Medicare Advantage membership.

(5/12/08)- According to the latest figures there are an now an estimated 9.4 million Medicare beneficiaries enrolled in Medicare Advantage plans, up from the 9.22 million that we mentioned in our item of 1/21/08 below. The federal government will spend an estimated $86.4 billion this calendar year on coverage of the 9.4 million people enrolled in these plans.

There has been a large outcry in connection with some unscrupulous sales practices that insurance companies have used in connection with selling this type of plan to Medicare beneficiaries. In fact Senator Max Baucus, the Democrat from Montana who heads the Senate Finance Committee vowed to introduce legislation to try and curb many of these practices.

There are many health professionals who feel that the states should introduce legislation that would rein in many of these illicit sales practices. The Bush administration is introducing several proposals that are intended to deal with this problem.

State can regulate the activities of insurance agents and brokers who sell private Medicare plans, but they generally can't regulate the insurance companies that offer such plans. Under the 2003 Medicare law, which added a drug benefit to Medicare, the federal government sets standards for private Medicare plans, and these standards supersede state laws and regulations except in two areas, the licensing and solvency of insurers.

In the draft of a report prepared by the National Association of Insurance Commissioners, state officials say they hope to propose common standards for marketing the private plans, which could then be enforced by states that adopt them.

The Bush proposals would outlaw unsolicited visits and telephone calls to beneficiaries, regulate commissions paid to sales agents and increase the fines that could be imposed on insurers.

Federal officials intend to issue final rules before the marketing of plans for 2009 begins this October. Medicare pays private insurers 13% more on average than it would spend for the same beneficiaries in the traditional Medicare program.

The president's proposal would prohibit door-to-door marketing of private Medicare Advantage plans. Agents would not be allowed to "cold-call" prospective clients on this product. The proposal includes a ban on the value of gifts and promotional items being offered to potential customers in excess of $15. Insurers would not be allowed to offer free meals, no matter what the value of the meal was.

The proposed rules would also prohibit agents from offering annuities, life insurance and other "non-health care related products" while selling Medicare Advantage plans.

Violation of these rules could result in fines up to $25,000 for each beneficiary who was "directly adversely affected".

Under the new proposals, the commission paid for the initial coverage could not exceed the commission paid for renewal coverage in a subsequent year. Man insurers pay a higher commission in the first year, which could some agents to encourage beneficiaries to change plans each year. The insurer would have to pay the same commission for all its Medicare Advantage plans and a uniform amount for all its drug plans.

(3/7/08)- In a report issued by the Government Accountability Office, an investigative arm of Congress, investigators determined that many people in private Medicare Advantage plans face higher costs for home health care, nursing homes and some hospital stays. There are about 9 million people in such plans, or abut 1/5 of the total 44 million people who are beneficiaries under these plans.

The report stated: "Medicare spends more per beneficiary on Medicare Advantage than it does for beneficiaries in the original Medicare fee-for-service program, at an estimated additional cost to Medicare of $54 billion from 2009 through 2012.)

The researchers found that "48% of Medicare Advantage beneficiaries were in plans that had an out-of-pocket maximum" that ranged from $2,750 to $4,600 a year and averaged about $3,500.

It went on to show that certain costs are not counted towards the out-of-pocket limits. Twenty-nine percent excluded the cost of some cancer drugs, 23% exclude the cost of some mental health services and 21% exclude home health care expenses.

"If the policy objective is to subsidize health care costs of low-income Medicare beneficiaries," the report said, "it may be more efficient to directly target subsidies to a defined low-income population that to subsidize premiums and cost-sharing for all Medicare Advantage beneficiaries, including those who are well off."

(2/3/08)- Senator Max Baucus (D-Montana), chairman of the Senate Finance Committee said that his committee is considering whether to legislate on reforms to act as a check against the growth of Medicare private-fee-for services plans (PFFS). PFFS plans grew enrollment by 120% in 2007 and accounted for 60% of Medicare Advantage growth.

PFFS plans have come under renewed attack by the Democrats because of their misleading marketing plans, and because of questions of whether or not they add sufficient value in comparison to what they are paid.

According to a study done by the Kaiser Family Foundation, about one-half of the enrollees in PFFS are in counties where another type of Medicare Advantage plan is available that offers more benefits with a greater net value. Senator Baucus had considered last year legislative changes that would have curtailed PFFS in areas where other types of Medicare Advantage plans are available.

President Bush remains opposed to most cuts, including changes that would reduce payments to PFFS

(1/21/08)- The Centers for Medicare and Medicaid Services (CMS) released Medicare Advantage (MA) enrollment data as of the January 2008 payment. Enrollment in MA grew to 9.22 million from 9.01 million as of December 7, 2007. This is an increase of 2.4% which reflected enrollments accepted through November 8, 2007.

The February report will contain the most meaningful data, since it will contain the data for the final 3 weeks in December. The open enrollment period for Medicare Part D ran from November 15^th thru December 31^st, so the January data will reflect results from the beginning half of open enrollment.

(12/21/07)- The House by a vote of 411 to 3 cleared the legislation passed by the Senate unanimously on 12/18 that would replace a pending 2008 physicians pay cut of 10% through June 30^th with a 0.5% pay increase and re-authorized the children's health program with funding to maintain current enrollment levels through March 2009.

The president is expected to sign the legislation into law before January 1. Medicare Advantage plans will suffer only some minor cuts, even though the Democrats had hoped to make more significant cuts to this type of plan.

The package would cut more than $1 billion from a "stabilization fund" created in a 2003 bill to help faltering Medicare Advantage insurers. The package would also cut an incentive fund passed by Congress last year to encourage physicians to report quality data to the government. Such cuts would be made to comply with Congress's pay-as-you-go budget rule that requires new spending to be offset.

Once again we see that the law requiring physician fees to be cut under the Medicare formula are subverted.

(12/12/07)- Under the Medicare fee formula for physician payments rules, the payments to doctors and other medical professional is due to be cut 10% starting in 2008. If this were to happen many doctors would opt out of participating in Medicare. These called for cuts in fee payment occurred under the formula in prior years also, but this has never happened before.

With the Congress and the president locked in a battle over the budget, mainly over the expenditure for the Iraq-Afghanistan war and child-health care cost legislation, the Medicare Advantage program has come to the forefront as a potential area for cost savings for the Medicare program.

Medicare Advantage plans currently account for almost 9% of the 43 million Medicare beneficiaries. Based on calculations from both the Congressional Budget Office and the federal Medicare Payment Advisory Commission (MedPAC-for more info on this commission please see our article Helpful Web Sites ) Medicare Advantage plans cost taxpayers about 12% more than does regular Medicare plans.

The federal payment for Medicare Advantage plans vary from locality to locality, but on average it costs about $9,000 per enrollee nationwide. Humana currently has 1.1 million members enrolled in its Medicare Advantage program, making it the number four player in this program, and UnitedHealth, which markets its plans along with AARP has 1.3 Medicare Advantage members, making it the number one insurer under this program.

Democrats in general favor cutting back on the Medicare Advantage program, while the president and the Republicans are in favor of maintaining it, since its members in general are quite satisfied with the program. If the program goes unchanged, government spending on it is projected to exceed $100 billion in 2009.

(11/21/07)- The Centers for Medicare and Medicaid Services (CMS) released Medicare Advantage (MA) enrollment data as of November 1, 2007 payment. Enrollment in MA grew to 8.98 million from 8.95 million as of July 1, 2007. This is an increase of 0.4% which reflected enrollments accepted through October 17, 2007. November is normally a slow period and most enrollment comes in January and February when over 700,000 enrolled in 2007.

(8/22/07)- The Centers for Medicare and Medicaid Services (CMS) released Medicare Advantage (MA) enrollment data as of August 1, 2007 payment, which reflects enrollments accepted through July 13, 2007. Enrollment in MA grew to 8.79 million from 8.68 million as of July 1, 2007. This is an increase of 0.9% which reflected enrollments accepted through June 13, 2007.

(7/17/07)- The Centers for Medicare and Medicaid Services (CMS) released Medicare Advantage (MA) enrollment data as of July 1, 2007 payment, which reflects enrollments accepted through June 13, 2007. This is an increase of 1.3% which reflected enrollments accepted through May 15, 2007.

(5/20/07)- The Centers for Medicare and Medicaid Services (CMS) released Medicare Advantage (MA) enrollment data as of the May 1, 2007 payment, which reflects enrollments accepted through April 13, 2007. Enrollment in MA grew to 8.62 million from 8.51 million since the data of April 1, 2007, which reflected enrollment accepted through March 15, 2007.

There are two types of Medicare Advantage plans. One is the regular Medicare Advantage plan and the other is called a private-fee-for-service plan (PFFS). PFFS were created in 1997, but they received a big boost by the new prescription drug law of 2003. It is estimated that there are about 1.3 million Medicare beneficiaries who are enrolled in PFFS.

Medicare Advantage members have limits on their choice of providers, whereas PFFS members have an open-access option as to their providers.

Recently Medicare officials have warned Congress and the public about the overly aggressive sales pitches being employed by the PFFS. To try and remedy the problem, Medicare will require PFFS plans next year to call all new enrollees to make sure they understand what PFFS are, and exactly how much of a premium they will have to pay for their coverage.

The Medicare Payment Advisory Commission, which advises Congress on Medicare issues estimated that the government spends 12% more on beneficiaries in Medicare Advantage plans, and 19% more on beneficiaries in PFFS than it does on regular Medicare beneficiaries. The commission has recommended to Congress that it cut payment to these plans so that they are at the same level as is the cost for all Medicare participants.

(1/24/07)- Medicare Advantage insurance companies received a substantial subsidy increase under the new prescription drug law written in 2003. With the Democrats now in control of Congress, many are questioning the wisdom of that increase. Please keep in mind also that President Bush has emphasized Medicare Advantage as the key to his Medicare revamping strategy.

As of the most recent count, there were 7.6 million people enrolled in Medicare Advantage programs as of December 2006. That compares with about 6.1 million who were enrolled in the plans as of December 2005. Incidentally, there are about 44 million enrolled Medicare beneficiaries as of the end of last year.

A November 2006 report that was written by the Commonwealth Fund, a private nonprofit foundation that supports health research, concluded that, on average, the government is spending about $922 more each year for every Medicare beneficiary who is in the Advantage program, than for the beneficiaries in the regular Medicare program. That comes to a total cost of about $5.2 billion.

The main author of that report was Former House Democratic aide Brian Briles. MedPac, the independent panel that advises Congress on Medicare issues concluded that the government is paying substantially more for Medicare Advantage beneficiaries than it is for regular Medicare beneficiaries.

"There are precious few areas where we can save money. Medicare Advantage is a prime target to pick up a few dollars," said Rep. Pete Stark (Dem.-CA) who heads the House Ways and Means panel's health subcommittee. The House Ways and Means Committee, and the Senate Finance Committee are the respective panels from which legislation pertinent to Medicare arises from.

(9/3//06)- Congress created private-fee-for service (PFFS) plans in 1997 as an alternative to Medicare. This type of plan has experienced phenomenal growth the last few years as Congress has continued to increase the subsidies to these plans to encourage more and more seniors to join them. President Bush has also been in the forefront of encouraging seniors to join these plans as a way of reducing the growing health care benefit coverage cost for Americans.

Sometimes called Medicare alternative plans, but better known now as Medicare Advantage Plans they are becoming more and more attractive to participants since they not only cover physician and hospital services under one roof, and in addition they continue to add benefits for its members.

Instead of paying the beneficiaries claims through the Medicare payments system, these plans involve the direct payment by the federal government to the insurance company to manage the health care needs of its members.

Under the terms of the Prescription Drug Act of 2003, Congress raised the reimbursement rate to companies offering Medicare Advantage plans to about $10,000 per enrollee, per year.

Some of the plans have responded by offering their members additional services such as vision care as well as prescription drug coverage.

As of July, more than seven million Americans were in some form of Advantage plan, which represents about 17% of all Medicare beneficiaries, up from 14,3% in December according to Avalere Health LLC, a health-care advisory firm that analyzes Medicare data.

Enrollment in private fee-for-service plans jumped to 82,068 as of August 1 from just 20,000 three years ago, says David Lewis, acting director of the Medicare Advantage Group at the Centers for Medicare and Medicaid Services.

Wellpoint Health Services said that it plans to offer Advantage plans in all 50 states in 2007. Because of the subsidies that the Advantage plans get from the federal government, many of them have lower premiums than do the HMOs or PPOs in particular areas.

Humana Inc. is the largest provider of PFFS plans, with over 60,000 enrollees.

One potential huge market for the insurance companies will be the millions of enrollees that they recently signed up for Part D Medicare coverage plan.

The Medicare Payment Advisory Commission, (http://www.medpac.gov ) which advises the government on Medicare issues has warned that the government pays 11% more on average for Medicare Advantage plans for physician and hospital services than for the traditional Medicare plan.

There are many of us who remember how the insurers abandoned their plans when they felt that they were not making enough money off these plans. The government continues to increase the subsidies to these plans, but even that did not stop them from abandoning their members in many localities.

Advantage members must still pay the Medicare Part B premium for physician and outpatient services, which is $88.50 in 2006.

FOR AN INFORMATIVE AND PERSONAL ARTICLE ON PRACTICAL SUGGESTIONS WHEN SELECTING A NURSING HOME SEE OUR ARTICLE "How to Select a Nursing Home

By Allan Rubin
updated July 17, 2008

http://www.therubins.com

To e-mail: hrubin12@nyc.rr.com or rubin@brainlink.com

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