Medicare, Medicaid on the Table
8 cuts the deficit super-committee might make
by: Patricia Barry | from: AARP Bulletin | August 10, 2011
Will Medicare and Medicaid benefits be cautiously trimmed or dramatically sheared by a “super-committee” looking for ways to cut federal spending?
That’s the question as the committee, composed of six Republicans and six Democrats, tries to figure out how to slash $1.5 trillion from the national deficit in a new round of negotiations. The group must make its recommendations before Thanksgiving, and Congress is expected to vote on them by Dec. 23 2011 cuts the debt committee might make to medicaid medicare social security – rally to save.
Everything’s on the table, but here are eight changes to Medicare and Medicaid that the committee is expected to consider:
1. Replace the current Medicare program with a …………read the rest of the article at AARP.org
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The U.S. Senate rejected a House- passed budget plan that would privatize Medicare, a vote aimed at putting Republicans on record on an issue Democrats say could boost them in the 2012 elections.
The Democratic-controlled Senate voted, 57-40, not to advance the plan drafted by House Budget Committee Chairman Paul Ryan, a Wisconsin Republican. Yesterday Democrats seized a Republican-held House seat in western New York in a special election that the Democratic candidate turned into a referendum on Ryan’s deficit-cutting Medicare proposal.
“Last night’s results provide clear evidence that when voters learn about the Republican plan, ending Medicare as we know it, they say, ‘no,’” said Senator Patty Murray of Washington, chairwoman of the Democratic Senatorial Campaign Committee. “This is a red district, and Republicans were expected to win, but everything changed once that conversation turned to Medicare.”
Republicans said Democrats have failed to offer a credible budget alternative to curb costs of the government health program for senior citizens and restore some fiscal balance at a time of mounting deficits.
Senator John Cornyn of Texas, chairman of the Senate Republican campaign committee, said Medicare may be trumped by the economy as an election issue next year. At any rate, he said, Republicans can get traction on the Medicare issue by pointing out the lack of Democratic ideas.
‘What’s the Alternative’
“Ask, where’s the alternative,” Cornyn said he will advise his party’s candidates. “Where’s your responsible budget?”
Five Republicans sided with Democrats to defeat the Ryan plan………………….READ MORE…….
Newsmax.com: Senate Rejects House Budget Plan to Privatize Medicare
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Ask Ms. Medicare
What to Do if Your Current Medicare Plan Won’t Exist Next Year
by: Patricia Barry from: AARP Bulletin October 14, 2010
Have a question on Medicare? Look first at the Q&As already posted in our Ask Ms. Medicare archive. If the answer you’re looking for isn’t here, e-mail your query to Ask Ms. Medicare at firstname.lastname@example.org.
Be sure to include your name, age, state and ZIP code. Your name will not be published.
Q. I had a letter from my Medicare plan saying it will not be available in 2011. Is this the result of the new health reform law? What should I do?
A. Don’t panic. Your Medicare benefits are not being taken away and you will still have choices. And no, your plan wasn’t a victim of the new health care law. But you will need to make some decisions — depending on whether the “plan” you’re talking about is a Medicare Advantage health plan, a “stand-alone” Medicare prescription drug plan, or a Medicare supplemental insurance policy, also known as medigap.
Medicare Advantage health plans
These plans — mainly HMO and PPO managed care plans — are offered by private insurers as an alternative to the traditional government-run Medicare program. (To see the differences between the two, see this previous Q&A.) Since these plans began more than a decade ago, some have pulled out of Medicare and new ones have joined. All plans are free to make this business decision each calendar year. In 2011, nearly all beneficiaries — 99.7 percent, or virtually the same percentage as this year, according to Medicare officials — will have access to a health plan.
Since 2004, Medicare Advantage plans have received subsidies from the government that, on average, cost Medicare about 12 percent more for plan enrollees than if they had been receiving services in the traditional program. Citing the extra cost to the taxpayer — amounting to about $136 billion over 10 years — and the fact that this helps drive up the Part B premium for everybody on Medicare, the new health care law will gradually phase out the plan subsidies. But the phase-out doesn’t start until 2012, so subsidies in 2011 remain unaffected.
However, private fee-for-service (PFFS) plans — a non-managed-care type of Medicare Advantage plan — will change in 2011 under a different law passed in 2008. For the first time, these plans will be required to establish contracts with doctors, hospitals and other providers (as HMOs and PPOs have always been obliged to do) so that enrollees can be sure which providers will accept their plan. As a result, many PFFS plans have chosen to withdraw from Medicare in certain areas. Nationwide, there will be 239 such plans in 2011 compared with 435 this year, a drop of 45 percent, according to Medicare officials.
What you can do: If your current Medicare Advantage plan won’t be available in 2011, you will still be able to choose from many other plans almost anywhere you live. (The exceptions are 28 rural counties in Colorado and one in Utah, where PFFS plans have pulled out, leaving no other plan options.)
Switching to another Medicare Advantage plan: You can use the health plan finder on Medicare’s website to see what other plans are available to you and compare their costs and benefits. You can join a new plan during open enrollment, which runs from Nov. 15 to Dec. 31, with coverage beginning Jan. 1. Coverage under your current plan will remain unchanged until Dec. 31. If you do not actively enroll in a new Medicare Advantage plan, you will automatically be covered under traditional Medicare in 2011.
Switching to traditional Medicare: This option is available to anybody on Medicare. But remember that if you change to the traditional program, you will also need to join a “stand-alone” Part D plan (see below) during open enrollment in order to get prescription drug coverage. If your current Medicare Advantage plan is going out of business or withdrawing from your area, you also have the option of buying medigap supplemental insurance that covers some or most of the out-of-pocket costs of traditional Medicare, depending on the type of policy you purchase. Provided that you are age 65 or older and apply for a medigap policy within 63 days of your health plan’s coverage ending, you will have full federal guarantees and protections — meaning you cannot be denied coverage or pay more because of health problems. If you are under 65, different rules apply…………….
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Question toAARP by a member:
Q. My 85-year-old father is in a nursing home and his long-term care insurance has nearly run out. I’m told that under the new law he will have to sell all his assets to be eligible for 100 percent Medicare benefits in the nursing facility. Is this true?
A. No — at least, not in the way you seem to think. As so many people do, you’re confusing Medicare and Medicaid. These programs are entirely different. And nothing in the new law changes existing laws that relate to paying for nursing home care*.
Medicare is a federal program that covers a wide range of medical services for people age 65 and older and some younger people with disabilities. Medicare covers these services regardless of whether enrollees live in a nursing home or in the community — for as long as they live — provided that their monthly premiums continue to be paid. But Medicare does not cover any “custodial care” — that is, the costs of a room, meals and help with daily tasks such as dressing and bathing that a nursing home provides — and never has. (The only exception is coverage for short-term stays in a skilled nursing facility, most often for a few days or weeks of continuing care or rehabilitation after being in the hospital, as explained in this previous Q&A.)
Medicaid is the nation’s medical safety net, providing health care assistance for certain groups of people (including those over age 65) whose incomes and financial resources are very low. Though mainly funded and guided by the federal government, Medicaid is run by the states and eligibility rules vary among them. (The program is also known by different names in some states — for example, Medi-Cal in California, TennCare in Tennessee and MassHealth in Massachusetts.) But, nationwide, Medicaid does pay the costs of nursing home care for people who are eligible.
Most people who enter nursing homes do not qualify for Medicaid at first but pay for the very high costs of this care through long-term care insurance or out of pocket until the insurance runs out and/or they have spent down their savings and are then eligibile for Medicaid.
Eligibility depends on a means test. Your income and assets must be under a certain dollar level set by your state. Certain assets may be exempt — up to about $2,000 in savings, investments or other financial resources that can be turned into cash; a life insurance policy with a face value of up to $1,500 and a burial plot worth up to $1,500.
If you are married and own a house together, your spouse can continue to live in it as well as keeping all furniture and household goods and one automobile. If the house is sold, the proceeds are regarded as joint assets and some will go to Medicaid to help pay for the cost of your nursing home care. After you and your spouse die, Medicaid could go after the proceeds of the estate to help reimburse the nursing home costs.
But be warned: You cannot give away assets or sell them for less than market value to qualify for Medicaid nursing home help faster. In assessing your eligibility, Medicaid officials will examine your financial records going back five years to look for asset transfers. If they find one that falls outside the rules, your Medicaid coverage for nursing home care would be delayed by a certain length of time, according to a formula that divides the transfer amount by the average monthly cost of nursing home care in your state.
So if, for example, you made a gift of a house worth $250,000 to a family member or friend, or sold it at far less than its market value, and the average monthly nursing home cost in your state is $5,000, your eligibility for Medicaid coverage would be delayed by 50 months ($250,000 divided by $5,000 = 50). The same rule applies to transfers of cash or other assets.
There are some exceptions to this rule. To take just one example: If you are not currently married and have an adult child who has lived in your home and looked after you for at least two years before you enter a nursing home, you can transfer the title of your home to that child without any delay in coverage.
This is only a thumbnail sketch of the many rules that govern Medicaid eligibility for nursing home care, many of which vary from state to state. To find out how the rules apply to you, you or a family member may need to consult an informed counselor or a qualified elder law attorney.
You can get a lot of information from your state’s heath insurance assistance program (SHIP), which is a public service that provides personal help from trained counselors on all Medicare and Medicaid issues at no charge. To find SHIP counselors in the state where you or your family member is living in a nursing home (or will soon enter one), go to the SHIP website. SHIP counselors could also put you in contact with an elder law attorney if you need one.
* Note: The new health care law does introduce a new voluntary insurance program that allows working people to contribute money from their earnings in return for daily cash payments later on if they develop a disability or a medical condition that impairs daily living activities. The payments can be used toward the cost of assistance in your home, in an assisted living facility or in a nursing home. But they wouldn’t be enough to cover the full costs of permanent residency in a nursing home. This program (known as the CLASS Act) is still being organized and full details of when it will begin and how it will work are not yet known. For more information, see AARP’s fact sheet.
Patricia Barry is a senior editor at the AARP Bulletin.
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Prognosis guarded for Medicare and Social Security
from: Associated Press Online | August 5, 2010
By RICARDO ALONSO-ZALDIVAR and MARTIN CRUTSINGER
WASHINGTON, Aug. 5, 2010 (AP Online delivered by Newstex) — Medicare and Social Security — the foundation of a secure retirement — are facing strains from an aging population and an economy that can’t seem to get out of low gear.
And despite assertions to the contrary by the Obama administration, the new health care law doesn’t improve Medicare’s solvency by much.
As the government releases its annual financial checkup Wednesday on the two giant programs that support millions of middle-class retirees, the prognosis is guarded.
Demand for services is going up, and income from payroll taxes can’t keep pace. Meanwhile, the government has used trust fund surpluses to pay for other needs, leaving Medicare and Social Security with a pile of IOUs.
Interest in the trustees’ report is running high this year because it’s expected to delve into the effects of the new federal health care law on Medicare.
The report is being issued by three top administration officials, Treasury Secretary Tim Geithner, Health Secretary Kathleen Sebelius and Labor Secretary Hilda Solis. They will be joined by a fourth trustee, Social Security Commissioner Michael Astrue, appointed to a six-year term in 2007 by former President George W. Bush.
But the number-crunching and analysis are done by nonpartisan professionals at the Office of the Actuary, an obscure economic unit in the Health and Human Services Department that has a reputation for independence.
To the consternation of White House officials, recent reports from that office have raised questions about the heath care law’s impact on Medicare.
An April 22 analysis pointed out that the highly touted gain of 12 years of additional solvency for Medicare from the health overhaul is largely an “appearance,” stemming from how Medicare cuts are handled under federal accounting rules. Savings from those cuts would be used to finance coverage for the uninsured.
“In practice, the improved (Medicare) financing cannot be simultaneously used to finance other federal outlays (such as the coverage expansions) and to extend the trust fund, despite the appearance of this result from the respective accounting conventions,” the report said.
A companion report concluded that some of the $575 billion in Medicare savings over 10 years “may be unrealistic” because future Congresses could be pressured to roll back cuts to providers in the health care law.
The actuary’s office also projected enrollment will plummet in popular private insurance plans offered through Medicare, as a result of cuts in the health care law.
The picture for Social Security isn’t encouraging, either.
Last year, the trustees projected that Social Security would run out of money by 2037 unless Congress acts. Since then, the poor economy has increased pressure on the program’s finances, as payroll taxes fell and the number of people applying for early retirement and disability benefits increased.
For the first time since the 1980s, Social Security will pay out more money in benefits this year than it collects in payroll taxes, according to projections by the Congressional Budget Office.
More than 53 million people receive Social Security. Retirement benefits average $1,100 a month, and disabled workers get an average of $1,065. Medicare covers more than 46 million retirees and disabled people.
Social Security is financed by a 6.2 percent payroll tax on wages below $106,800. The tax is paid by workers and matched by employers. Medicare is financed by a mix of general revenues, payroll taxes and premiums paid by beneficiaries.
The Social Security trust funds have built up a $2.5 trillion surplus over the past 25 years. But the federal government has borrowed that money over the years to spend on other programs. The government must now start borrowing money from public debt markets — adding to annual budget deficits — to repay Social Security.
President Barack Obama has formed a bipartisan fiscal commission that is working on recommendations to improve government finances, including those for Social Security and Medicare. Seniors’ groups are lobbying against benefit cuts, while conservatives say they will oppose tax increases, creating a difficult political environment for compromise.
Associated Press writer Stephen Ohlemacher contributed to this report.
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AARP BULLETIN NEWSLETTER
Q. I just enrolled in Medicare, but it’s hard to afford $110 a month for the Part B premium when my only income is a small Social Security check. Is there any program that can help me?
A. You may qualify for help under one of the Medicare Savings Programs (MSPs) in your state. If so, the state would pay your Part B premium and you’d also automatically qualify for low-cost prescription drug coverage within the Part D program.
To be eligible for an MSP, your income and savings must be below certain limits, which vary according to the state you live in. However, the limits are generally higher than those required to qualify for Medicaid, and some states don’t take savings into account at all. So it’s well worth applying.
There are four kinds of MSP, each with a different income limit. Two of them pay Part B premiums. The MSP with the lowest income limit also pays for Part A and Part B deductibles and copayments. The fourth pays Part A (hospital insurance) premiums for people under age 65 who have disabilities and are no longer entitled to free Part A coverage because they have returned to work.
If you qualify for an MSP, you will also automatically be enrolled in Part D’s Extra Help program, as federal law now requires. This means you pay no premium or deductible for prescription drug coverage, your copays for prescriptions are low, and you receive drug coverage throughout the year—no “doughnut hole.”
Another benefit of qualifying for an MSP: If you are required to pay a late penalty because you delayed enrolling in Part B beyond your deadline, the state will pay the full amount each month—the penalty as well as the Part B premium.
To find out if you’re eligible for an MSP, contact your state medical assistance office (Medicaid). You can get the phone number from the state pages in your phone book or by calling the Medicare help line at 1-800-633-4227. Or contact your State Health Insurance Assistance Program (SHIP), where you can get personal help, at no charge, from trained counselors on all Medicare and Medicaid issues. For contact information go to the SHIP website and click on “Find a State” or “Find a Counselor.”
Patricia Barry is a senior editor with the AARP Bulletin.
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WASHINGTON—Senate Democrats had to delay votes on the first set of amendments to the health care bill Tuesday in the face of stiff Republican opposition, underscoring the fiercely partisan floor debate and threatening the tight timeline for passage.
Party leaders, scrambling to pass a bill by Christmas, had hoped to approve a proposal to expand access to mammograms and other preventive services. Instead, lawmakers spent much of Tuesday tussling over the bill’s potential effect on Medicare.
Democratic leaders propose to offset the cost of expanding insurance coverage to some 31 million people in part by cutting future Medicare payments to hospitals, nursing homes and other providers.
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What Happens to Medicare Under the House and Senate Bills
Both measures seek to save the program billions without cutting traditional benefits
Congressional health care reform proposals, after months of wrangling, have been distilled into two major bills, one in the House and one in the Senate. The bills differ in some areas—such as the amount and kinds of taxes they would levy to help finance reforms—but there is little overall difference in the measures when it comes to the critical question of Medicare. The bills would carve $420 billion to $440 billion in savings from the program, but the savings would not affect traditional Medicare benefits. In fact, budget experts say, without cutting guaranteed benefits, both bills shore up the solvency of the Medicare trust fund for five additional years.
Indeed, experts generally say reform legislation—the House approved its bill in November, the Senate will begin debate on its final measure this week—aims to strengthen Medicare and improve beneficiaries’ care and access to physicians. The proposals even add new benefits; for example, making preventive measures such as mammograms and colonoscopies free to beneficiaries, and substantially improving prescription drug coverage. Still, fears among Medicare beneficiaries remain.
“Medicare beneficiaries are the most satisfied of any Americans with their health coverage, so it’s natural for them to worry about any changes that might alter it, especially when they’re being lied to in a deliberate attempt to make them feel anxious,” says Jonathan Oberlander, a professor of social medicine and health policy at the University of North Carolina, Chapel Hill, and author of The Political Life of Medicare.
Today, older Americans on Medicare “have an incredibly valuable security blanket,” says Joe Baker, president of the Medicare Rights Center, a nonprofit consumer service organization. “So once you start rocking that boat, they react viscerally. But I think if you don’t scare them, seniors view reform more positively. They’d love for their children and grandchildren to have the same sense of security that they have now.”
But how can billions of dollars be carved out of Medicare to help pay for reform measures without affecting traditional benefits? And what’s the outlook if no action is taken?