What does the Medicare reforms mean for You?
A federal summary of the changes reveals a long list of reforms intended to contain Medicare costs while increasing revenue, improving and streamlining its delivery systems, and even increasing services to the program.
How will the new health care reform law impact budgetary impact?
The health reform legislation passed in March 2010 will introduce a range of payment and delivery system changes designed to achieve a significant slowing of health care cost growth. Most assessments of the new reform law have focused only on the federal budgetary impact.
How did the Affordable Care Act reduce costs?
Cost savings through Medicare Advantage The ACA gradually reduced costs by restructuring payments to Medicare Advantage, based on the fact that the government was spending more money per enrollee for Medicare Advantage than for Original Medicare. But implementing the cuts has been a bit of an uphill battle.
What should Medicare look like in the future?
Medicare should continue to be a national health insurance program, not a set of independent private plans and payment options. Medicare should include a mandatory, secure set of defined benefits. Medicare should continue to provide one community of interests among the healthy and frail, rich and poor.
What are some reforms of Medicare?
Improve Traditional MedicareEnsure traditional Medicare is comprehensive, simple to navigate, and affordable.Add oral health, audiology, and vision coverage for all beneficiaries in traditional Medicare.Increase low-income protections and reduce cost-sharing.Add coverage for long-term care.More items...
Why does Medicare need reform?
Why reform Medicare? The main reason for reforming Medicare is not that the program is the principal driver of future federal spending increases, although it is. The main reason is not that Medicare beneficiaries could be receiving much better coordinated and more effective care, although they could.
How has the Affordable Care Act affect Medicare?
Medicare Premiums and Prescription Drug Costs The ACA closed the Medicare Part D coverage gap, or “doughnut hole,” helping to reduce prescription drug spending. It also increased Part B and D premiums for higher-income beneficiaries. The Bipartisan Budget Act (BBA) of 2018 modified both of these policies.
What is the impact of healthcare reform?
We estimate that, on net, the combination of provisions in the new law will reduce health care spending by $590 billion over 2010–2019 and lower premiums by nearly $2,000 per family. Moreover, the annual growth rate in national health expenditures could be slowed from 6.3 percent to 5.7 percent.
What is Medicare payment reform?
Medicare payment reform aims to increase quality health care for Medicare beneficiaries and improve the program's financial sustainability. This briefing provided background on Medicare payment reform, including new value-based models that have evolved over the past decade.
When was Medicare reformed?
Medicare policy under the Obama Administration (2009-2017) Former President Barack Obama signed the Affordable Care Act (ACA) into law on March 23, 2010—establishing what would become one of the longest lasting legacies of his two terms in office.
How does the Affordable Care Act affect the elderly?
"The ACA expanded access to affordable coverage for adults under 65, increasing coverage for all age groups, races and ethnicities, education levels, and incomes."Under the ACA, older adults' uninsured rate has dropped by a third, indicators of their health and wellness have improved, and they're now protected from ...
Is the Affordable Care Act the same as Medicare?
In the simplest terms, the main difference between understanding Medicare and Obamacare is that Obamacare refers to private health plans available through the Health Insurance Marketplace while Original Medicare is provided through the federal government. The groups each serve are also very different.
Is Medicare Part of Affordable Care Act?
The 2010 Affordable Care Act (ACA) included many provisions affecting the Medicare program and the 57 million seniors and people with disabilities who rely on Medicare for their health insurance coverage.
What is the main impact of healthcare reform on Medicare Advantage?
The Impact of Health Reform on the Medicare Advantage Program: Realigning Payment with Performance. The Affordable Care Act enacts a new payment system for private health plans available to Medicare beneficiaries through the Medicare Advantage (MA) program.
What are the benefits of healthcare reform?
The goal of health reform is to reduce the number of uninsured, making healthcare more affordable and improving quality of care. In context of global health, health reform that takes place in health systems across the world vary depending upon various factors within the nation.
What are the cons of healthcare reform?
List of Health Care Reform ConsIt may create negative results instead of positive results. ... There is always a financial cost to pay for reforms. ... Reforms tend to gut the existing systems that are in place. ... Health care reforms tend to cost more at the individual level over time.More items...•
Why was Medicare enacted in 1965?
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.
Why was the hospital bill denied by Medicare?
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 was emergency services.
Why was Medicare created?
The Medicare program is a success story. It was designed and enacted in 1965 as a social insurance program because private companies failed to insure older people. It was intended to provide basic coverage through one health insurance system, with a defined set of benefits.
Why was the nursing home billed for $13,000?
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.
How much more do taxpayers spend on Medicare?
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.
When did Newt Gingrich say Medicare would be privatized?
In 1995 Newt Gingrich predicted that privatization efforts would lead Medicare to wither on the vine. He said it was unwise to get rid of Medicare right away, but envisioned a time when it would no longer exist because beneficiaries would move to private insurance plans. Well … that's what's happening.
When did Medicare extend to disabled people?
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.
When did Medicare stop paying extra Medicare?
However, all Medicare beneficiaries, not just those enrolled in Medicare Advantage plans, have ended up footing the bill for these extra payments. The new law freezes the extra Medicare payments to Medicare Advantage plans in 2011 and begins to reduce the payments to plans in 2012.
Why is Medicare a reference point?
In addition, because of its size and status as a national program, Medicare coverage and payment policies are a reference point for private health insurers and other payers, which frequently follow Medicare's lead in changing policies. And because of the size and scope of Medicare, its coverage and payment policies have a significant impact on ...
What is the new CMS center?
It also requires that by 1 January 2011 the CMS create a new center, the Center for Medicare and Medicaid Innovation, to lead the task of experimentation.
What percentage of Medicare beneficiaries are enrolled in Medicare Advantage?
About 25 percent of beneficiaries are enrolled in Medicare Advantage. When changes are made in the benefits that Medicare covers or in the amounts it pays providers, as is the case with the new health reform law, the impact is significant. The changes affect the health care received by the large and growing Medicare population.
What are the special provisions for rural hospitals?
SPECIAL PROVISIONS FOR RURAL HOSPITALS: Although the reform package will slow the rate of growth of Medicare payments to most types of providers, including hospitals, there are special provisions in the law to protect rural hospitals.
What is the issue with the Patient Protection and Affordable Care Act?
What's the issue? In March 2010, Congress enacted the Patient Protection and Affordable Care Act to expand health insurance and reform the health care delivery system. The package also included significant changes to Medicare, the federally run health insurance program for the elderly and disabled. These include important new benefits ...
When will the coverage gap be eliminated?
Beginning in 2011, the coverage gap will be reduced in stages, until it is eliminated in 2020. Also beginning in 2011, beneficiaries who fall into the coverage gap over the next several years will be able to purchase brand-name medications at half price, under an agreement reached with major pharmaceutical companies.
When did Medicare start?
Originating in the Social Security Amendments Act of 1965 (H.R. 6675), Medicare began its life as a traditional FFS health plan with the aim of providing coverage to impoverished elderly Americans in the remaining few years of their life; average life expectancy at birth was 70.5 years. 7.
What is the Medicare program?
The Medicare program consists of two primary programs: traditional Medicare (a FFS model) and MA, which is based on market-driven health plan competition.
What is Medicare Advantage?
Medicare Advantage, an alternative that uses defined contribution payments to private companies that administer health care benefits, provides greater financial protections and benefits for consumers while providing the potential for budgetary control in a way that does not exist in traditional Medicare.
How did the ACA reduce Medicare costs?
Cost savings through Medicare Advantage. The ACA gradually reduced costs by restructuring payments to Medicare Advantage, based on the fact that the government was spending more money per enrollee for Medicare Advantage than for Original Medicare. But implementing the cuts has been a bit of an uphill battle.
Why did Medicare enrollment drop?
When the ACA was enacted, there were expectations that Medicare Advantage enrollment would drop because the payment cuts would trigger benefit reductions and premium increases that would drive enrollees away from Medicare Advantage plans.
How much does Medicare Part B cost in 2020?
Medicare D premiums are also higher for enrollees with higher incomes .
What is Medicare D subsidy?
When Medicare D was created, it included a provision to provide a subsidy to employers who continued to offer prescription drug coverage to their retirees, as long as the drug covered was at least as good as Medicare D. The subsidy amounts to 28 percent of what the employer spends on retiree drug costs.
What percentage of Medicare donut holes are paid?
The issue was addressed immediately by the ACA, which began phasing in coverage adjustments to ensure that enrollees will pay only 25 percent of “donut hole” expenses by 2020, compared to 100 percent in 2010 and before.
How many Medicare Advantage enrollees are there in 2019?
However, those concerns have turned out to be unfounded. In 2019, there were 22 million Medicare Advantage enrollees, and enrollment in Advantage plans had been steadily growing since 2004.; Medicare Advantage now accounts for well over a third of all Medicare beneficiaries.
How many Medicare Advantage plans will be available in 2021?
For 2021, there are 21 Medicare Advantage and/or Part D plans with five stars. CMS noted that more than three-quarters of all Medicare beneficiaries enrolled in Medicare Advantage plans with integrated Part D prescription coverage would be in plans with at least four stars as of 2021.
Overview
To judge the merit of the comprehensive health reform legislation recently signed into law by President Obama, it is essential to understand its impact on the affordability of insurance coverage and overall health care spending. Most assessments of the new law consider the federal budget only.
Impact of reform on national health expenditures
Health care reform will affect national health expenditures through five major channels.
Impact on the federal budget
The Congressional Budget Office estimates that the reform law will reduce the federal deficit by $143 billion over the 10 years, 2010–2019. Our estimates of the federal deficit impact differ from CBO’s in two ways. First, we include savings to Medicare and Medicaid resulting from health system modernization.
Impact on Medicare
Prior to reform, Medicare expenditures were projected to grow by 6.8 percent annually from 2010 to 2019 (Exhibit 5). The payment and system reform savings estimated by CBO total $397 billion when CLASS and non-Medicare provisions are removed.
Impact on premiums for private coverage
Reducing insurer administration and modernizing the delivery of health care services will each result in reductions in private insurance premiums. Private premiums might be affected by other provisions as well.
Explaining the difference with other estimates
The estimated health system savings we present are larger than those forecast by the Congressional Budget Office and the Centers for Medicare and Medicaid Services Office of the Actuary, which are similar to each other.
Conclusion
The new health reform law introduces a range of payment and delivery system changes likely to result in a significant slowing of health care cost growth. First, the law calls for the creation of health insurance exchanges that offer a choice of plans and the ability, for the first time, to truly compare plan premiums.
What's The Issue?
- In March 2010, Congress enacted the Patient Protection and Affordable Care Act to expand health insurance and reform the health care delivery system. The package also included significant changes to Medicare, the federally run health insurance program for the elderly and disabled. These include important new benefits for enrollees, new taxes to sho...
What's The background?
- The Medicare program is the largest health insurance program in the country. It has four parts: Part A, primarily for inpatient hospital services; Part B, for outpatient services such as visits to the doctor; Part C, for private health insurance that provides Medicare benefits, known as Medicare Advantage (MA) plans; and Part D, for outpatient prescription drugs, also delivered through priva…
What's in The Law?
- EXPANDED PRESCRIPTION DRUG COVERAGE:The design of the Medicare prescription drug program includes a so-called coverage gap or "doughnut hole": after a beneficiary incurs a certain amount of charges for prescription drugs, he or she is temporarily responsible for paying 100 percent of his or her drug costs. The health reform law provides a $250 rebate for individuals wh…
What's Next?
- The CMS is expected to issue regulations to guide how provisions will be implemented in the coming weeks and months. Plans, providers, physicians, and beneficiaries will begin responding to the changes in the law. As the Medicare Advantage payment changes go into effect, beneficiaries may or may not see changes in benefit offerings. The Hospital Insurance (Part A) T…
Resources
- Robert A. Berenson and Bryan Dowd, "Medicare Advantage Plans at a Crossroads--Yet Again."Health Affairs 28, no. 1 (2009): w29-w40 (published online 24 November 2008). Congressional Research Service, "Medicare Provisions in PPACA (PL 111-148)." Kaiser Family Foundation, "Explaining Health Care Reform: Key Changes to the Medicare Part D Drug Benefit C…
About Health Policy Briefs
- Written by: Amanda Cassidy Principal, Meitheal Health Policy, LLC (Cassidy previously worked for Centers for Medicare & Medicaid Services in the Office of Legislation and the Center for Medicare Management.) Susan Dentzer Editor-in-Chief, Health Affairs Health Policy Briefs are produced by Health Affairswith the support of a grant from the Robert Wood Johnson Foundation. Reviewed …