What is a Medicare premium support system?
In a premium support system, the federal government would provide a payment on behalf of each Medicare beneficiary toward the purchase of a health insurance plan – either a private plan, similar a Medicare Advantage plan, or traditional Medicare. This approach is sometimes called a defined contribution or voucher approach.
What is the difference between premium support and the ACA marketplaces?
A major difference between a premium support system for Medicare, as described in most premium support proposals, and the ACA marketplaces is the presence of a dominant public plan (traditional Medicare) and the lack thereof in the ACA marketplaces.
Can Medicare be converted to a system of premium supports?
On June 22, 2016, the House Republicans included in their health care reform plan a proposal to gradually transform Medicare into a system of premium supports, building on proposals of the Speaker of the House, Paul Ryan, when he was Chair of the House Committee on Budget, as well as the proposals of many other policymakers. 1
How will increased enrollment affect Medicare Advantage plans?
First, higher costs relative to traditional Medicare will strain federal spending and the solvency of the Hospital Insurance (Part A) trust fund. Second, increased enrollment could necessitate changes to the payment system for Medicare Advantage plans.
What is Medicare premium support?
Premium support is a general term used to describe an approach to reform Medicare that aims to reduce the growth in Medicare spending by increasing competition among health plans and providing a stronger incentive for beneficiaries to be cost-conscious in their plan selection.
Are Medicare Advantage enrollees healthier?
Traditional Medicare and Medicare Advantage enrollees have historically had different characteristics, with Medicare Advantage enrollees somewhat healthier.
What is the goal of Medicare Advantage?
One of the main goals of MA plans is to manage health care in order to reduce costs while also providing necessary care. An MA plan must provide enrollees in that plan with coverage of all services that are covered by Medicare Parts A and B, plus additional benefits beyond those covered by Medicare.
What benefits are provided by the Medicare program?
Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. Part B covers certain doctors' services, outpatient care, medical supplies, and preventive services. Helps cover the cost of prescription drugs (including many recommended shots or vaccines).
What are the advantages and disadvantages of Medicare Advantage plans?
Medicare Advantage offers many benefits to original Medicare, including convenient coverage, multiple plan options, and long-term savings. There are some disadvantages as well, including provider limitations, additional costs, and lack of coverage while traveling.
Does Medicare Advantage cost more than Medicare?
Medicare spending for Medicare Advantage enrollees was $321 higher per person in 2019 than if enrollees had instead been covered by traditional Medicare. The Medicare Advantage spending amount includes the cost of extra benefits, funded by rebates, not available to traditional Medicare beneficiaries.
How can Medicare Advantage plans have no premiums?
$0 Medicare Advantage plans aren't totally free Medicare Advantage plans are provided by private insurance companies. These companies are in business to make a profit. To offer $0 premium plans, they must make up their costs in other ways. They do this through the deductibles, copays and coinsurance.
Is Medicare Advantage Value based?
Medicare Advantage is built on a value-based system in which Medicare Advantage health plans receive a per-member, per-month payment for each beneficiary's care, and are tasked with using those dollars most effectively – incentivizing high quality, high-value care for the 24.2 million enrollees who trust Medicare ...
What is the difference in Medicare and Medicare Advantage?
Medicare Advantage is an “all in one” alternative to Original Medicare. These “bundled” plans include Part A, Part B, and usually Part D. Plans may have lower out-of- pocket costs than Original Medicare. In many cases, you'll need to use doctors who are in the plan's network.
What is the Medicare program quizlet?
Medicare is a social insurance program administered by the United States government, providing health insurance coverage to people who are aged 65 and over, or who meet other special criteria.
Which patient will benefit Medicare quizlet?
Who is eligible for Medicare benefits? Adults 65 yrs or older, adults with disabilities, Individuals who became disabled before the age of 18 yrs, an entitled spouse, a retired federal employee, Individuals with ESRP, or a permanent resident.
What has been the impact of Medicare on the health care system?
Medicare and Medicaid have greatly reduced the number of uninsured Americans and have become the standard bearers for quality and innovation in American health care. Fifty years later, no other program has changed the lives of Americans more than Medicare and Medicaid.
Why is Medicare premium support important?
A primary goal of many premium support proposals is to reduce long-term federal spending on Medicare, and a premium support system has the potential to reduce future, federal spending on Medicare if it increases competition among plans, decreases premiums, and provides stronger incentives for beneficiaries to be cost-conscious in their plan selection.
What is the most important issue for Medicare plans?
An important issue for plans (and consumers) is how the Medicare marketplace would be governed . In many proposals for a premium support system, it is unclear how the marketplace would be regulated or even which federal agency would regulate it.
What is the purpose of the ACA marketplace?
The ACA marketplaces are designed mainly to provide health insurance for people who would otherwise be uninsured – a non-issue for people on Medicare given the universal nature of the program, by design.
What is the difference between ACA and Medicare?
A major difference between a premium support system for Medicare, as described in most premium support proposals, and the ACA marketplaces is the presence of a dominant public plan (traditional Medicare) and the lack thereof in the ACA marketplaces. The presence of a public plan competing toe-to-toe with private plans in Medicare would influence ...
What is premium support?
Premium support is a general term used to describe an approach to reform Medicare that aims to reduce the growth in Medicare spending by increasing competition among health plans and providing a stronger incentive for beneficiaries to be cost-conscious in their plan selection. On June 22, 2016, the House Republicans included in their health care ...
When did the House Republicans include Medicare reform?
On June 22, 2016, the House Republicans included in their health care reform plan a proposal to gradually transform Medicare into a system of premium supports, building on proposals of the Speaker of the House, Paul Ryan, when he was Chair of the House Committee on Budget, as well as the proposals of many other policymakers. 1.
Does Medicare increase federal savings?
The CBO has said that including traditional Medicare as an option would increase federal savings because the rates that traditional Medicare pays providers would help to hold down the rates paid by private plans and thereby hold down the bids of private plans.
What would a premium support system that made beneficiaries more sensitive to differences in plans’ premiums do?
Features of a premium support system that made beneficiaries more sensitive to differences in plans’ premiums would tend to reward plans that bid low with higher enrollment and thus encourage more plans to submit lower bids.
How does Medicare Advantage work?
In most places in the United States, Medicare beneficiaries may choose among competing private insurers— through the Medicare Advantage program—instead of the traditional FFS program. Participating insurance companies submit bids indicating the per capita payment they are willing to accept for providing Part A and B benefits to a beneficiary of average health. (A separate bidding process determines payments for Part D.) The federal payment per enrollee then depends on what the insurance company bids and on how that amount compares with a “benchmark” that is announced by the federal government before those bids are submitted. Under a system set to be fully phased in by 2017, benchmarks will be based on per capita spending in the FFS program at the county level, and they will range from 95 percent of FFS spending per capita in the one-quarter of counties where such spending is highest to 115 percent of FFS spending per capita in the one-quarter of counties where such spending is lowest. Plans with quality ratings above a specified threshold will have bonus amounts added to their benchmarks.
What would happen if private insurers reduced their bids by more than the CBO's estimates?
If private insurers responded to increased competitive pressure by reducing their bids by more than the amounts in CBO’s central estimates, federal savings would be correspondingly greater under both options because the benchmarks would be lower than estimated. But federal savings would be lower if private insurers reduced their bids by less than the central estimates.
What would happen if fewer people were included in a premium support system?
If fewer people were included in a premium support system, federal savings generally would be lower, all else being equal. For this analysis, CBO assumed that the premium support systems would not include a grandfathering provision (thus including more beneficiaries than if such a provision were part of the system) and would exclude dual-eligible beneficiaries.
How would differences in premiums affect federal spending?
Departures from the central estimates in beneficiaries’ responsiveness to differences in premiums would influence federal spending both through the effects on plans’ bids and through the effects on the share of beneficiaries enrolled in private plans. If beneficiaries were more responsive to differences in premiums than is predicted in CBO’s central estimates, private insurers’ bids would be lower than they are in those estimates (because insurers would have a stronger incentive to reduce their bids if such reductions led to larger increases in enrollment); those lower bids would result in greater federal savings. Conversely, if beneficiaries were less responsive to differences in premiums than in the central estimates, the private insurers’ bids would be higher and federal savings would be lower. Regarding enrollment shares, if beneficiaries were more responsive to differences in premiums than in the central estimates, a larger proportion would switch to lower-bidding plans under premium support, causing several indirect effects on federal savings (as discussed below). If they were less responsive, the opposite would occur.
What is the average premium for 2020?
Under the second-lowest-bid option, CBO estimates, the average annual premium paid by beneficiaries in 2020 would be $2,100 —about 30 percent higher than the current-law Part B premium for that year (see Figure 4). Under the average-bid option, CBO estimates, the average premium paid by beneficiaries in 2020 would be $1,500, or 6 percent below the current-law Part B premium.
What would happen if Medicare Advantage bids were lower than those in CBO projections?
If Medicare Advantage bids under current law were lower than those in CBO’s projections and FFS spending was as CBO projects, then federal savings under both options would be greater, according to CBO’s estimates, because the benchmarks under the options would be lower than projected. Conversely, if Medicare Advantage bids under current law were higher than those in CBO’s projections and FFS spending was as CBO projects, federal savings would be smaller than projected. Although CBO’s estimates of the effects of a premium support system are sensitive to changes in the bids of Medicare Advantage plans relative to FFS spending, those estimates are not directly sensitive to equal percentage changes in Medicare Advantage bids and FFS spending—that is, to an across-the-board increase or decrease in Medicare spending relative to the amounts that CBO projects—because the difference between the benchmarks under the options and federal spending for Medicare under current law would not be affected. However, if such an across-the-board change occurred, it could affect the amount by which private insurers under a premium support system reduced their bids relative to Medicare Advantage bids (as discussed below).
What are the issues that would have to be addressed in designing a premium support system for Medicare?
Other issues that would have to be addressed in designing a premium support system for Medicare include the structure of the incentives that beneficiaries would face, the adjustment of payments to plans to account for dif-ferences in their enrollees’ health status, the dissemina-tion of information to beneficiaries, the geographic definition of bidding areas, and possible subsidies for low-income beneficiaries.
What are the benefits of a standard Medicare benefit package?
A standard benefit package offers three advantages: first, in a system in which benchmarks were determined from plans’ bids, it would help assure the fairness of the bidding process because all plans would bid on the same product; second, it would make it easier for beneficiaries to compare their premiums across plans and for the gov-ernment to educate them about their options; and third, it would prevent plans from designing their benefit pack-ages to discourage enrollment by beneficiaries with medi-cal conditions that are costly to treat. (Another way to reduce plans’ incentive to design their benefit packages to limit the enrollment of beneficiaries who have costly medical conditions would be for the government to adjust its contribution for the health status of a plan’s enrollees.)
How does managed competition affect health care?
The effect of managed competition on health care spend-ing depends in large part on the alternative system with which it is compared. Many employers contribute a larger dollar amount when their employees choose a plan witha higher premium—for example, by paying the entire premium or paying a fixed percentage of the premium. Replacing that type of system with managed competition could reduce total spending on health care through two mechanisms: encouraging employees to switch from higher-cost plans to lower-cost plans and inducing plans
What is the CBO approach to Medicare?
appendix describes the Congressional Budget Office’s (CBO’s) approach to two components of its anal-ysis of alternative methods of setting benchmarks under premium support. The first section describes CBO’s approach to estimating private plans’ costs of delivering Medicare benefits at the county level. The Adjusted Community Rate (ACR) reports contain plans’ projec-tions of their cost per enrollee of delivering Medicare benefits in their service area. Many plans include more than one county in their service area, however, and plans are not required to report costs by county. For this study, therefore, CBO developed an approach to estimating each plan’s cost per enrollee at the county level from the costs each plan projected for its entire service area. The second section describes CBO’s approach to projecting plans’ bids under premium support from the estimates of plans’ costs.
What is premium support?
Under premium support, the government’s contribution toward the cost of Medicare coverage could be deter-mined from the bids of competing health plans or could be set equal to a predetermined amount. Those two approaches could have very different implications for fed-eral spending on Medicare.
How does Medicare change?
Numerous policy analysts have proposed changing the Medicare program by adopting the principles of premium support.1 The proposals vary in specificity and design, but all envision a system in which private plans would compete on the same terms as the fee-for-service (FFS) program and beneficiaries would face incentives to choose plans on the basis of their relative premiums and the quality of care they pro-vide. A demonstration that is scheduled to begin in 2010 and a bill that was introduced in the Congress in 2001 illustrate alternative design options for pre-mium support that have been debated by lawmakers in recent years.
What is FFS in Medicare?
Most Medicare beneficiaries receive their care in the fee-for-service program, which pays providers for each cov-ered service (or bundle of services) they provide. The FFS program is popular with beneficiaries because, unlike many private insurance plans, it does not restrict their choice of providers and does not require prior authoriza-tion for any covered service.
What is the term for a method of controlling health care costs by reviewing the medical necessity of care?
A method of controlling health care costs by reviewing the medical necessity of care is called: utilization review. The concept of combining health care with the financing of services provided is called: managed care. A triple option plan is also called a: cafeteria plan.
What is Medicare Risk Program?
A Medicare risk program is a federally qualified HMO or CMP that meets specified Medicare requirements and provides Medicare-covered services under a (n): risk contract.
What is a consumer-directed health plan?
consumer-directed health plans (CDHPs) In managed care, the primary care provider (PCP) typically receives a capitation payment and is responsible for managing all of an individual's health care; when the PCP arranges for the individual to receive care from a specialist), the specialist receives a ...
What is a PCP in health care?
In a managed care plan, the primary care provider (PCP) serves as a: gatekeeper. Health care providers accept preestablished payments for providing care to health plan enrollees over a period of time under the reimbursement method of: capitation. A method of controlling health care costs by reviewing the medical necessity of care is called:
What is a contracted network of health care providers?
Contracted network of health care providers that provide care to subscribers for a discounted fee. Organization of affiliated providers' sites that offer joint health care services to subscribers. Provides benefits to subscribers who are required to receive services from network providers.