There are several changes in Medicare that are required by the Healthcare Reform Bill, which take effect on January 1st, 2011. These changes largely affect the amount paid by Medicare recipients for drugs and doctors’ services. Here is a brief recap of the changes which will occur on January 1st, 2011
1) Free annual wellness check-up for all Medicare Part B participants. Currently, Medicare Part B participants are allowed the wellness check-up only on enrollment and this exam is subject to deductible regulations.
2) No ‘out-of-pocket’ expenses for specified preventative exams for Medicare Part B participants.
3) Closing of the ‘donut hole’ medication gap. Requires manufacturers of brand name drugs to reduce the cost of covered drugs by 50% in 2011, increasing the deduction to 75% by 2020. Generic drug cost will be reduced in the Medicare Part D drug coverage from 7% in 2011 to 75% by 2020.
4) There will be premium surcharge for wealthy Medicare Part D participants, which will be gradually increased over the next few years.
5) The limit on income, on which participants pay a surcharge for Part B (and Part D in 2012), will not be indexed to inflation through 2019. As incomes rise due to inflation, more seniors will be subject to the surcharge.
Medicare Advantage plans will be under pressure to meet some of the requirements set forth by the Healthcare Reform Bill for 2011. The bill requires that
- All Medicare Advantage plans must cap participants’ annual out-of-pocket costs.
- Co-payments for services such as Medicare Part B drugs and durable medical supplies cannot be higher than what Medicare requires of patients.
- Subsidies from Medicare to Medicare Advantage plans will be the same as in 2010, even though the cost of providing medical services may have increased for the plans.
Democrats in Congress are concerned that Medicare Advantage plans will increase premiums in order to cover the additional costs incurs to comply with the new mandates required by the Healthcare Reform Bill. In a letter to Health and Human Services secretary Kathleen Sebelius, they asked her to use her authority ”To promote stability in the program, the health reform legislation protected 2011 plan payment rates and took care to phase in future payment changes to minimize disruption. Any effort by MA plans to increase beneficiary premiums or reduce benefits next year should be carefully evaluated in light of these payment protections”.
Senator Rockefeller of West Virginia summed up the sentiment of many Democrat Congressmen, when he stated that, “Seniors on fixed incomes shouldn’t be subjected to exorbitant health care premium increases…..and….The Federal Government must continue to crack down on the unscrupulous practices of private health insurers.”
The review process for Medicare Advantage plans was conducted behind closed doors, so insurance companies and the public at large didn’t know the outcome until October, when plan details were released. (Who are the ‘unscrupulous’ ones, Senator Rockefeller?).
In 2011, Home Health services will see a reduction in Medicare Payments averaging about 4.75% as compared to 2010. This reduction is based on a formulate which rates differing types of service provided, but the bottom line is that Home Healthcare providers will receive about $900 million. If the goal of the Healthcare Reform Bill is to reduce the cost of medical care, then one significant way to reduce costs would be to increase home healthcare services and allow patients to recover at home, rather than in a hospital.
Private insurance premiums and reimbursements often take their cues from Medicare reimbursement rates. If Medicare continues to reduce payments for medical procedures and requirement for drug companies to reduce the cost of drugs, it won’t be long before the same requirements become common in private insurance. This is not good news for healthcare providers or drug companies.
Well, the dust has settled from the 2010 elections and the Republicans have taken control of the House of Representatives and many state legislatures and governorships. In listening to several of the Republican leaders, nationally, they are saying the right things. Representative John Boehner (R-Ohio), the presumptive Speaker of the House stated on Wednesday, the day after the elections, that the Republicans were ready to carry out the will of the people, in contrast to the current administration. Talk is cheap, so let’s see what happens over the next few months.
President Obama has said that he is willing to look at ideas on moving the country forward from all quarters. Of course, he said this soon after he was elected president, then promptly excluded Republicans from all strategy sessions which drafted the Healthcare Reform Bill and the House and Senate leaders barred them from proposing any amendments to the bill.
I saw the results of one exit poll (I don’t know where this exit poll was taken) where voters were asked what should be done about the Healthcare Reform Bill and the responses were:
Repeal it 48%
Expand it 18%
Leave it as is 33%
This result is consistent with recent polls which have consistently indicated that 60-65% of people are not happy with the Healthcare Reform Bill. Two significant points need to be made about this exit poll:
1) Of the 66% who are not happy with the Healthcare Reform Bill, 18% are unhappy because it did go far enough toward a true National healthcare system. This is what has been indicated throughout the recent polls. So the 60% opposed to the healthcare care bill are not all against it, because it takes away freedom. The fact that 51% of voters feel that the Healthcare Reform Bill is OK or not Expansive enough is the real story.
2) This exit poll polled actual voters, not registered or likely voters, so the results more accurately reflect the voting public.
Several states passed amendments or initiatives exempting the state from the mandatory purchase of insurance requirement within the Healthcare Reform Bill. As was previously pointed out, this is more symbolic than enforceable, Federal law still trumps state law. Just ask anyone who has been convicted of marijuana possession on Federal charges, even though their state has legalized marijuana possession.
Editor’s note:
With the national economy still weak, unemployment hovering around 10%, and foreclosures at still very high levels, it is very irresponsible for President Obama to take his very ostentatious trip to India this week. The Presidential entourage has booked the entire 570 room Taj Mahal hotel in Mumbai. With the several cargo planes of stuff, staff, and other expenses, this vacation for the president is costing the American taxpayers over $200 million per day. This little vacation for President Obama will cost American taxpayers over ONE BILLION DOLLARS. This is the kind of governmental excesses that the voters rejected on Tuesday. It is this display of arrogance that the American public is rejecting. Our elected officials are supposed to be public servants, not royalty.
This extravagant trip, taken by the President now, when the rest of the country is mired in economic uncertainty is in poor taste. We, the American public deserve better from our elected officials.
With the 2010 elections less than one week away, you’d think that the Democrats would be trumpeting their legislative accomplishments over the past two years. This should be especially true of the Healthcare Reform Bill, which was their greatest legislative triumph in 2010. Yet, you don’t hear many Democrat election ads heralding all the great accomplishments that they have achieved. The only times that you hear anything about the legislation passed over the past two years are when the Republican candidates are reminding the voting public exactly what legislation was passed, and how the Republicans will repeal or roll back the legislation. The Democrats running for office this election cycle know full well that the voting public did not want THIS Healthcare Reform Bill to be passed, yet they passed it away. Now, these same Democrats don’t want to remind the voters exactly what they did, against the will of the people. Whether you favor or oppose the Healthcare Reform Bill, it was the process of how the bill was passed, and the fact that the elected representatives did not follow the will of their constituents, that should make ALL voters stand up and take notice. Our representatives in Washington are supposed to be public servants, not masters. We need to make that our representatives understand this fact.
I came across an item this week concerning the Healthcare Reform Bill that I was not aware of before. It is not new, so you may aware of it, but it bears mentioning. As part of the increase in taxes, in order to pay for the Healthcare Reform Bill, Medicare taxes are going to levied on capital gains for the first time in history. This new tax will be 3.8% on capital gain income, if your AGI is greater than $250,000 for a married couple ( $200,000 for singles). This tax will affect many more people than the public realizes, though it is not clear at this point whether the sale of your primary residence will be included for this tax. If it is included, many older citizens will have to pay the 3.8% tax on the sale of their home, if the capital gain is more than the $250,000, which will happen for many retired persons who bought their house years ago. This tax will directly affect many middle income or lower income persons when they sell their house. The tax will also decrease the amount of economic activity, as people will decide not to sell assets, in order to avoid paying the tax.
(On a related item, the Bush tax cuts that are set to expire on December 31st, 2010, the capital gains tax will increase to 20% from its current 15%. This means that capital gains taxes will increase from 15% to 23.8% when the full affect of the tax takes place.)
The polls continue to indicate that the American public is still opposed to THIS Healthcare Reform Bill by 60%-67% opposed to 25%- 30% in favor. These numbers have not changed much in the past several weeks.
