Posts Tagged ‘Medicare Part D’

ACA’s Future Unclear As It Celebrates Its 2nd Birthday

Tuesday, April 3rd, 2012

As the Patient Protection and Affordable Care Act (ACA) celebrates its second birthday, the Obama administration reminded senior citizens – one of the most reliable voter blocs — exactly how much healthcare reform has helped them.  Coverage of the “donut hole” in prescription drug plans saved five million seniors and disabled people $3.2 billion.  According to data from the Centers for Medicare and Medicaid Services (CMS), through the first two months of 2012, roughly 103,000 Americans saved $93 million in the donut hole.  “Without the healthcare law, more than 5.1 million seniors would have faced $3.2 billion in higher drug costs,” Health and Human Services Secretary Kathleen Sebelius said.  The donut hole is a gap in coverage for prescription drugs under what is called Medicare Part D.  Part D covers 75 percent of the cost of prescription drugs until total medication spending for the patient hits $2,800.  Then the hole opens, and seniors must pay out of pocket until they have spent $4,550.  After that, Medicare pays about 95 percent of drug costs.

The ACA sent all seniors who hit the prescription drug donut hole a one-time $250 check.  In 2011 and 2012, seniors in the donut hole receive a 50 percent discount on brand-name drugs.  Additionally seniors covered by traditional Medicare received wellness check-ups and screenings for diseases like cancer and diabetes without paying anything out of pocket.  Under the law, the donut hole phases out in 2020.

The seniors’ lobby AARP launched its largest-ever outreach effort with ads and town-hall meetings aimed at defending Medicare and Social Security.  “We’re not leaving it up to chance” that the public hears about the law’s benefits, congressional Seniors Task Force co-chairwoman Jan Schakowsky (D-Ill.) said.  Democrats, Schakowsky said, have made it a “primary organization effort”…”to tell the truth (about the law) over the next several months.”

Writing in The Hill, Julian Pecquet says that “Democrats see the Ryan budget, which is expected to propose replacing Medicare with subsidies for people to buy insurance, as political gold ahead of the November election.  Republicans for their part will spend the week hammering the law’s ‘broken promises’ — higher premiums, employers dropping coverage and the soaring cost of insurance subsidies when compared to the earlier budget window Democrats highlighted when they were debating the law two years ago.  They’re also arguing that the healthcare law hastens Medicare’s insolvency by removing $500 billion from the program to pay for what they call an unsustainable new entitlements.”

In terms of implementing the law to meet the 2014 deadline, the ACA leaves it up to the states to set up health insurance exchanges.  In states that refuse to do that, HHS has the authority to create a federal exchange as a backup — but it could be stretched thin if it has to cover too many states.  At the moment, a number of states are not making plans and the federal exchange could end up covering as many as 15 to 25 states.

Other states are biding their time depending on the outcome of the Supreme Court case — and the elections — to decide what to do next.  There’s an excellent possibility that many of them won’t be far enough along by January of 2013, when HHS has to either certify the states’ exchanges or prepare to run a federal exchange in those states.  HHS has already extended the deadline for states to apply for the grants that will help them run exchanges.  And it’s taking other steps to help states that won’t be ready in time.  But if a lot of states refuse to create the exchanges –and more time won’t help them — HHS will be forced to act.

White House spokesman Jay Carney told reporters that President Obama is looking beyond past battles. “He is focused on a forward agenda right now, and working with Congress and doing the things he can through executive action to grow the economy and create jobs,” Carney said.

Republican leaders, who once accused the president of focusing too much on healthcare and not enough on jobs, now say the White House is moving away from the ACA because of uncertainty over whether or not its individual mandate is constitutional.  In terms of the upcoming Supreme Court oral arguments, Senator Roy Blunt (R-MO) said “I think we’ll win in the end.  Now the question is how long is it until the end.  There’s no question that the president’s plan will not work.”

A differing opinion was offered by Democratic Caucus Vice-Chairman Xavier Becerra (D-CA).  “I think as time goes by more and more people are beginning to support the reform because it starts to apply to them.  The more people see what the ACA does, the more they’re going to like it.”

Medicare Part D Costs Expected to Fall in 2012

Monday, August 22nd, 2011

Medicare Increased competition between Medicare Part D plans, greater generic drug use and more transparency for consumers are why the Center for Medicare and Medicaid Services (CMS) expects lower Medicare prescription drug premiums next year.  Next year, the average Medicare prescription drug plan premium will cost approximately $30, compared with an average of $30.76 in 2011, according to the Department of Health and Human Services (HHS).  CMS Administrator Dr. Donald Berwick said that the average premium is about 44 percent lower than what was estimated in 2003.

The Part D drug benefit,  enacted when George W. Bush was president, lets seniors and others on Medicare sign up for a privately administered, government-subsidized health plan to purchase their prescriptions.  The program enjoys high popularity with beneficiaries and has proven to be far less costly than budget analysts originally expected, partly because of competition among private plans and the growing use of less costly generic drugs.

HHS also announced that nearly 900,000 Americans in the Medicare Part D “doughnut hole” have benefited from a 50 percent discount in brand-name drugs in 2012.  HHS estimates that out-of-pocket savings on drug costs for Medicare beneficiaries to be about $461 million from January through June of this year.  The Obama administration has worked to strengthen the Medicare drug benefit with the help of the Patient Protection and Affordable Care Act (ACA).  The law phases out the coverage gap, long seen as one of the program’s weaknesses.  Last year, approximately four million seniors received $250 rebates because they fell into the gap in coverage.  This year, the law will provide 50 percent discounts on prescriptions for those who hit the doughnut hole.

Seniors can chose from a variety of Part D plans,  and Dr. Donald Berwick, administrator of the Center for Medicare and Medicaid Services, said competition “clearly helps” keep premiums from rising.  At the same time, he warned against overextending Part D.  HHS said 17 million seniors have received at least one preventive healthcare service without a co-pay.  The ACA eliminated co-pays for many preventive services under Medicare and will ultimately do the same for private insurance.

“This decline in the average creates more risk for plans like ‘Humana’ and ‘United Health’ that have a significant portion of the Part D members,” said Peter Costa, a Wells Fargo analyst.  Costa said one reason for the lower bids could be last year’s joint venture between Humana and Wal-Mart stores to offer Medicare drug coverage with the lowest premiums in the country.

“The Affordable Care Act is delivering on its promise of better health care for people with Medicare,” said HHS Secretary Kathleen Sebelius.  “People with Medicare who hit the doughnut hole are paying less for their prescription drugs, 17 million Americans have received free preventive services and prescription drug premiums will remain low.  These are important steps that are making a difference in the lives of millions of Americans right now.”

“Medicare beneficiaries will have more affordable prescription drug coverage next year as a result of vigorous competition in the Part D program and Medicare drug plans’ efforts to encourage seniors to choose the most affordable medicines,” said Karen Ignagni, president and CEO of America’s Health Insurance Plans.  Ignagni noted that “taxpayers are also saving billions of dollars as the total cost of the program continues to be far below original projections.”

A CLASS Act

Tuesday, March 1st, 2011

The Obama administration is fending off critics of the CLASS Act, a voluntary insurance program created by the Patient Protection and Affordable Care Act designed to assist individuals who require long-term care and who want to remain in their communities. Health and Human Services Secretary Kathleen Sebelius is looking into revisions to assure that the program is financially self-sustaining.  The Community Living Assistance Services and Support Act (CLASS Act), which HHS will oversee, is envisioned as providing cash benefits to be used for non-medical expenses, such as paying for a home health aide or a family member to provide care, make modifications to the home and provide special transportation needs.

Opponents to the CLASS Act, such as the Heritage Foundation’s Brian Blase, argue that the program won’t support itself and could become a burden to taxpayers.  Blase says the program is “a Ponzi scheme that transfers money from current payees to current beneficiaries.”  Some Republicans are even calling for the law’s repeal.  Sebelius disagrees, noting that her department is looking at options to make certain that doesn’t happen.  She emphasized the importance of attracting healthy, less-costly people to the program to rein in costs and said that her department is “looking at options for indexing premiums so they would rise along with benefits.”  In addition, she wants to “close loopholes” that would let people drop out of the program and then return without paying a penalty.

According to Howard Gleckman, Senior Research Associate at the Urban Institute, “A key goal of national long-term care insurance is to reduce the role of Medicaid, which today pays for more than 40 percent of all personal care for seniors and others with disabilities. While Medicaid provides a critical safety net, it also often forces the disabled into the wrong care, in the wrong place, at the wrong time.  For instance, most benefits go only to those in nursing homes, even though they are often the last place people want to live.  And to qualify, people normally are allowed to keep only a few thousand dollars of financial assets and earn only a few hundred dollars a month.”

To the extent that national long-term care insurance can cut the number of people who go broke and turn to Medicaid for help, both states and the federal government will also be winners.  Fully a third of Medicaid’s budget, or more than $100 billion a year, is spent on long-term care.  The Congressional Budget Office estimates that Medicaid will absorb a stunning one-sixth of all federal tax revenues by 2050, and is putting financial pressure on states to pay nearly 50 percent of its costs.

So, how does Congress fix the CLASS Act?  First, CLASS needs to be an insurance-only program.  http://www.sacbee.com/2011/02/14/3401075/fix-the-class-act-dont-repeal.html Congress should make personal assistance benefits available to working people with disabilities – but through a separate program.  Second, employers should be encouraged to include this insurance in their employee benefit plans.  CLASS will succeed only with significant enrollment, so Congress should add incentives that will encourage employers to interest their employees in the program.  Finally, Congress should create an independent fund to accumulate and invest CLASS premiums.  This would end the budget gimmickry that troubles deficit hawks.  More important, it would assure participants that they are buying real insurance and not just exchanging their premium dollars for government IOUs.

“Someday, perhaps, the United States will make the choice that nearly every other major developed nation in the world has already made.  And that is to create a national, mandatory, long-term care insurance system funded by some mix of taxes and premiums.  Coverage could be provided by private insurers – just as the Medicare Part D drug benefit is today – or it could be run by the government,” according to Gleckman.  “Given our current anti-government, anti-tax climate, this won’t happen any time soon.  But that doesn’t mean our long-term care needs are going away.  It costs more than $200-a-day, on average, to stay in a nursing home.  Home health aides cost $20 per hour.  And after reaching age 65, more than two out of three of us will need some long-term care before we die.  We are woefully unprepared both as families and as a society for these needs, and the problem will only get worse as 77 million baby boomers age.  Medicaid is not the answer.  Neither is repealing CLASS.”