Medicare’s annual enrollment period is still a number of months away, but contentious budget talks and the implementation of health care reform may already have you scratching your head when it comes to Medicare.
Health reform brings with it some important changes, and as Congress looks at ways to cut the federal deficit, there has been discussion about how to reduce the cost of certain entitlement programs, including Social Security and Medicare. If you’re confused or uncertain about Medicare’s future, you’re not alone. Below we’ve identified some of the top things you should know.
Medicare spending may not be growing as much as experts thought. There’s been a lot of talk in Washington recently about the need to control health care costs. Here’s the thinking: If you don’t control Medicare and Medicaid spending, it will crowd out other budget priorities, including defense and education. However, in March, the White House issued its annual Economic Report of the President. According to that report, health care cost growth is on the decline. Experts aren’t sure exactly why; it may have to do with new payment rules. They also don’t know whether the decline will persist. However, the data does indicate that the budget debate around Medicare may shift. It’s also consistent with a 2012 report from eHealthInsurance, which found that, in 2012, family health insurance premiums declined for the first time in seven years.
The Medicare Advantage program is not going away. Plans to cut reimbursements to Medicare Advantage plans by 2.3 percent were reversed on April 1, 2013. Plans will now receive a 3.3 percent increase in 2014. There had been concern that health plans might quit participating in the program or drastically increase premiums due to the proposed cuts to reimbursements. Since enactment of the Affordable Care Act (ACA), Medicare Advantage enrollment has grown 25 percent. The number of plans participating in Medicare Advantage varies by county. You can compare plans in your area at eHealthMedicare.com, Planprescriber.com or Medicare.gov.
The new Independent Payment Advisory Board may not be what you think. Under the ACA, the members of this group must make recommendations on how to reduce the rate of growth in Medicare spending if spending exceeds a target growth rate. If reductions are necessary, the board will submit recommendations beginning in 2014 for the 2015 plan year. The board is prohibited from recommending changes that would ration care, increase costs for beneficiaries, reduce benefits or change eligibility.
Physicians and hospitals are teaming up to provide better care through Accountable Care Organizations. If you haven’t already heard of Accountable Care Organizations (ACOs), you probably will soon. Since passage of the ACA, doctors and hospitals have formed more than 200 ACOs, which are designed to encourage better coordination of care, while lowering costs. ACOs, among other things, must agree to be accountable for the overall care of their Medicare beneficiaries and have adequate participation of primary care physicians, promote evidence-based medicine and report on quality and costs. Beneficiaries using ACOs may choose doctors inside or outside of the ACO.
The federal government is changing the way it pays hospitals to encourage safer care. The ACA reduces Medicare payments to hospitals when patients are excessively readmitted for things that could or should have been prevented. Also, beginning in 2015, Medicare will pay less to hospitals when a patient acquires a condition while in the hospital. You can compare hospitals in your area by going to www.medicare.gov/hospitalcompare. The database provides information on several aspects of hospital care, including how often each hospital gives recommended treatments for certain conditions, how likely patients are to suffer from complications and how patients rate how well doctors and nurses communicate.
When it comes to prescription drugs, do your research to save money. The good news is: Costs are going down mostly because several popular brand-name drugs, including cholesterol drug Lipitor, are now available in generic forms. In addition to that, if you enter Medicare’s coverage gap—the “donut hole”—you will receive a discount of 52.5 percent on brand names drugs and 21 percent on generics. However, our research shows that most beneficiaries are not in the plan with the lowest out-of-pocket costs available to them. Be sure to do your research to maximize your savings.
Understanding Medicare, not to mention the latest changes, can be confusing. However, there are many resources available to help you understand the latest developments and how they affect your coverage.
Ross Blair is senior vice president of eHealth, Inc., which operates eHealthMedicare.com and PlanPrescriber.com. Both sites are leading providers of comparison tools and educational materials for Medicare-related insurance products.
The Centers for Medicare and Medicaid Services (CMS) has neither reviewed nor endorsed the information provided by PlanPrescriber.