Archive | Medicare

Threatening politicians if they cut Medicare, it’s not only the elite who influence for self interest at our collective peril. What would you do to rein in Medicare costs?

20 Nov
WI: Then-Senator Barack Obama and AFSCME membe...

Lobbying by any other name

Twenty-six year old history majors are protesting on Wall Street, the influence of the wealthy is decried, lobbyists are bedeviled and yet when a politician even thinks of trying to fix problems that were caused by the promises of past politicians and the actions of us all, they are targeted and threatened with unemployment.  

We are shocked at influence peddlers for one group and then do exactly the same thing in the name of seniors, or teachers or public employees.  The answer is not that one group of the other is bad or good, deserving or not, it is that we are unable to grasp the concept that everything we do is connected.  There are consequences, unintended or not, to the promises we make, the policies we establish, the money we borrow, the decisions we make.

In the quest to deal with the deficit, both Medicare and Social Security must be addressed.  They are the two largest components of federal spending and growing.  To ignore that is irresponsible and yet we have groups like the AARP and the unions listed below who choose to ignore the realities of our spending and inability to fulfill unrealistic promises.  You simply cannot look at one element of spending in isolation and expect to solve a spending problem as desirable as that spending may be.

Take a look at this report from Capsules the KHN Blog 

TV Spots Target Three Republicans On Medicare Cuts

By Karl Eisenhower

November 16th, 2011, 4:16 PM

The AFSCME and SEIU trade unions, along with the liberal advocacy group Americans United for Change, are warning Sen. Dean Heller, R-Nev., Sen. Scott Brown, R-Mass. and Rep. Denny Rehberg, R-Mont., that votes in favor of Medicare and Medicaid budget cuts will be unpopular with seniors.

The groups launched ads today featuring the voice of a woman who sounds as though she’s old enough to be eligible for Medicare.  The script of each version is the same, with only the name of the targeted member of Congress changing.  Heller and Brown are seeking reelection, and Rehberg is running for the Senate against Democratic incumbent Jon Tester.

The ad targeting Sen. Brown, embedded below, is running only in the Boston market, and only on cable television.  The Heller ad is running on broadcast stations in Reno, and the Rehberg ad is running on broadcast stations in Billings and Missoula.  All three spots will run through the end of this week.

A transcript follows:

If you vote to cut Medicare, Sen. Brown, I will remember it every time I visit my doctor. I’ll remember you cut Medicare and Medicaid every time I fill a prescription. I’ll remember you cut Medicare if I fall or get hurt. I’ll remember you chose protecting millionaires over protecting my health. My friends will remember it too –- all of them. Call Senator Heller. Tell him to protect Medicare and Medicaid.

Here is a quote from the Americans United for Change website:

For decades, seniors have relied on Medicare being a guaranteed benefit and those less fortunate have depended on Medicaid to provide long-term care and coverage for children. These programs need to be strengthened to ensure they remain available for future generations, which means not gutting and decimating benefits, leaving low-income children, seniors, and people with disabilities out in the cold. The key to making Medicare sustainable is reining in costs, not dumping more expenses onto seniors. We are working to set the right priorities for an economically secure future while continuing to protect health care coverage for those who can least afford it.

They are right, the key to making Medicare sustainable is reining in costs.  Ok, now just tell us how or more important, who will receive less when those costs are reined in?  Here is a check list of possibilities:

 [] doctors [] hospitals [] drug companies [] patients [] high-tech equipment manufacturers [] nursing homes 

The Affordable Care Act already claims to have saved over $400 billion in Medicare costs, plus raising an additional $100 billion plus from new taxes on the wealthy and employers.  The Act contains 160 programs and projects designed to lower costs over time and all this is still not enough.  Doctors are supposed to see their payments cut  27% in January 2012, but that will never happen. 

So, let’s have suggestions for “reining in costs!”

Raising Medicare eligibility age above 65; where are the savings?

14 Nov

The special congressional committee is looking for ways to reduce the deficit. That really means taking more of your money and giving you less for it, but that’s ok if it is in our long-term best interest … it is, right?

One idea that keeps surfacing is raising the Medicare eligibility age to 67 or some other number above 65. That is supposed to save money, a good thing I guess. But remember, saved money has to come from someplace. In this case it will come from individuals, employers and guess what, it will still come from the federal government as well.

That is because many, if not most, of the new young elderly will be getting their health care through the government subsidized exchanges and depending on their income will receive a substantial subsidy toward the premiums. Is that what we call taketh with one hand and giveth with the other?

Let’s assume you are 66 with an income (perhaps Social Security) equal to 133% of the poverty level, that’s about $14,483 for a single person in 2011. Your cost for health insurance is capped at 3% of income so your premium above $434 a year is paid for by the government. What do you think the premium will be for a 66-year-old? Well today the full cost of Medicare Part B alone is about $400 per month; add to that hospital and drug coverage and you get a total cost in excess of $10,000 a year of which in this example, $9,566 will be paid for by the government. Of course smaller subsidies apply on incomes up to 400% of the poverty level, but you get the idea, costs go from Medicare to PPACA, while the risk goes to the insurers and all their policyholders.

Now you know where the savings come from.

More “free” benefits under Medicare; creating new services when it is not necessary, can we legislate common sense?

12 Nov

Medicare has announced a new service that it will pay for in full.  I have highlighted in bold and red below the new service. Is it a good service, I guess.  So, let’s think about this, why wouldn’t this be part of a normal office visit?  Why wouldn’t this type of discussion take place during the course of ongoing treatment or following with one’s doctor?  Perhaps it does in many cases; certainly there is a great deal of promotion of a healthy diet.  And I have another question, at age 65 and over just how much prevention can take place, can a life’s worth of poor habits be wiped out to the extent there is prevention of potential cardiovascular disease? 

My objection with all this is not with the goal of helping people, rather it is with the idea that making more and more “free” is helpful to anyone.  In addition, we continuously fail to conduct a real cost benefit analysis on what we do.  This benefit would make more sense for forty-five year olds would it not, yet we seem to direct more and more of our limited resources at the oldest segment of our population at the expense of the other 250 million Americans.

 Medicare expands coverage of cardiovascular disease prevention services

New, free preventive services for Medicare beneficiaries support Million Hearts initiative  

The Centers for Medicare & Medicaid Services (CMS) today announced that Medicare is adding coverage for a number of preventive services to reduce cardiovascular disease.  This new coverage policy will add to the existing portfolio of free preventive services that are now available for people with Medicare, thanks to the Affordable Care Act.  It contributes to the Million Hearts initiative led jointly by CMS and the Centers for Disease Control and Prevention in partnership with other HHS agencies, communities, health systems, nonprofit organizations, and private sector partners across the country to prevent one million heart attacks and strokes in the next five years. 

“Access to preventive services helps Medicare beneficiaries identify health risk factors and disease early to provide greater opportunities for early treatment,” said CMS Administrator Donald M. Berwick, M.D.  “CMS continues to carefully and systematically review the best available medical evidence to identify those preventive services that can keep Medicare beneficiaries as healthy as possible for as long as possible.”  

Under this coverage decision, CMS will cover one face-to-face visit each year to allow patients and their care providers to determine the best way to help prevent cardiovascular disease. The visit must be furnished by primary care practitioners, such as a beneficiary’s family practice physician, internal medicine physician, or nurse practitioner, in settings such as physicians’ offices.  During these visits, providers may screen for hypertension and promote healthy diet as part of an overall initiative to reduce the burden of cardiovascular disease in the United States. 

Cardiovascular disease characterizes conditions affecting the heart and blood vessels, including hypertension, coronary heart disease, heart failure and stroke.  Cardiovascular disease is also the leading cause of mortality in the United States. Today’s new coverage policy does not change current Medicare coverage for beneficiaries diagnosed with cardiovascular disease to receive assessment and intervention services.     

Earlier this year, the U.S. Department of Health and Human Services announced its Million Hearts national initiative, aimed at preventing a million heart attacks and strokes in the U.S. by 2017. Through Million Hearts, CMS, the CDC and other HHS agencies are working together with public and private sector organizations to make a long-lasting impact against cardiovascular disease. 

“This coverage decision reinforces CMS’ commitment to the work of the Million Hearts initiative,” said Patrick Conway, M.D., CMS chief medical officer and director of the Agency’s Office of Clinical Standards and Quality. “One of the main ways we will prevent cardiovascular disease in this country is to empower Americans to make heart-healthy lifestyle changes, and Medicare’s new cardiovascular disease preventive services will allow more beneficiaries to do just that.” 

For more information about Million Hearts, please visit To read the new policy, visit the CMS website at:

Medicare physician fees to be cut by 27%. . . or not. Is this the first unworkable law Congress ever passed?

10 Nov
Secretary of Health and Human Services, Kathle...

27% you say? Tempting, but no.

Unless Congress intervenes, Medicare physician pay rates will be cut by 27.4% beginning January 1, 2012. This is a result of the 1997 law related to the sustainable growth rate for physician fees.  Congress has to date never allowed the cuts called for in the law to actually take place.  The law may be flawed, but it is interesting that when it comes to cutting costs via laws it passed, Congress picks its winner and losers. 

At the same time some politicians on the right have no problem proposing changes in Medicare that will fix government payments and transfer excess increases to Medicare participants.  These cuts in physician payments that never happen were originally part of the health care reform law and were counted as savings but were separated from the law before its enactment. They are still counted as savings to Medicare for budget purposes even though the Trustees note they are unlikely to occur.

Here is what the 2011 Trustees Report says.  Talk about between a rock and hard place, do you think Congress knows what it is doing?

Total Medicare expenditures were $523 billion in 2010 and are projected under current law to increase in future years at a somewhat faster pace than either workers’ earnings or the economy overall. As a percentage of GDP, expenditures are estimated to increase from 3.6 percent in 2010 to 6.2 percent by 2085 (based on our intermediate set of assumptions). If Congress continues to override the statutory decreases in physician fees, and if the reduced price increases for other health services under Medicare become unworkable and do not take effect in the long range, then Medicare spending would instead represent roughly 10.7 percent of GDP in 2085. Growth of this magnitude, if realized, would substantially increase the strain on the nation’s workers, the economy, Medicare beneficiaries, and the Federal Budget.

Here is what HHS recently said about the situation:

A Statement from U.S Department of Health and Human Services Secretary Kathleen Sebelius

On the need to fix the Sustainable Growth Rate issue upon release of the final Medicare physician fee schedule rule

America’s physicians are the backbone of our health care system.  Physicians are there for us throughout our lives, helping us improve our health and fight off disease.  Unfortunately, while Medicare remains strong, physicians are facing steep payment cuts as a result of a flawed 1997 law. Almost every year for more than a decade, doctors have faced this annual threat and the Congress has in turn acted to temporarily prevent these deep reductions from taking effect. We have not and will not let deep cuts to doctors’ payments occur.  The Obama Administration is 100 percent committed to fixing the flawed Medicare payment system and protecting Medicare beneficiaries’ access to doctors.

Earlier this year, President Obama presented a deficit reduction plan in which he once again called for a permanent fix to the sustainable growth rate (SGR) provision so that our nation’s physicians would no longer have to face the threat of draconian cuts year after year.  Today we again call on the Congress to quickly and permanently pass the so-called ‘doc fix’ and we pledge to work with legislators on both sides of the aisle to address this issue once and for all.  The pattern of threatened SGR cuts and last-minute Congressional rescues is in itself not a sustainable solution and must be remedied. Patients and physicians will both benefit when we take the action recommended by the President and permanently address this issue.

Setting physician fees under Medicare is an immensely complicated, even bizarre process.  If you have nothing to do for a week or two why not meander through the proposed regulations released by HHS or just glance at them to get a sense of what a massive bureaucracy can create.  A warning though, they comprise 1235 pages, but not to worry, you will be asleep within the first three.

Regulations for physician payment policies and fee schedules

Medicare reform and the Romney plan . . .utter nonsense

8 Nov

Like most, if not all, politicians, Romney has it all wrong.  His basic concept for reforming Medicare is to set the amount the government pays for each person’s coverage, turn seniors loose on the private insurance market with any difference in cost for the insurance selected a benefit or risk to the individual.  Brilliant!

Just like under PPACA the focus is not on managing health care costs, but on cutting government spending.  That solves very little for individuals.  In effect, Romney and other Republicans so adamant in opposing tax increases are doing far worse by placing Americans at additional risk for ever-increasing health care costs.

You can easily see Romney does not know what he is talking about by looking at one sentence from his website:

“These reforms will encourage insurers to lower costs and compete on the quality of their offerings”

Or how about this one:

“All insurance plans must offer coverage at least comparable to what Medicare provides today”

The politicians still control the coverage that must be offered while insurers are supposed to compete, but can’t do so by offering less costly benefit packages? 

What utter nonsense.  Exactly how does one expect insurers to lower health care costs…deny claims, tighten up on medical necessity rules so there are more patient complaints, cut the payments to providers so that they do not participate in the plans? If competition among insurers worked to control costs, if self-insured employer and union plans (covering over 70 million Americans) could control their costs, why do we still have a problem?

Keep this in mind, to control health care costs somebody has to be paid less.  That somebody is doctors, hospitals, drug and all medical device manufacturers, nurses, physical therapists, nursing homes, etc.  They must be paid less by not providing as many health care services and by not charging as much for the services they do provide.

That means you pay more and/or receive less health care…take your choice.

That is not an insurance problem, it is a system problem.

Spending on U.S. healthcare as a percentage of...

What we spend

In countries with national health care, they control costs (to some extent) by fixing budgets and accepting all the consequences and inconvenience of doing so. Doctors receive lower incomes, patients wait longer for services, and a cost benefit analysis is performed on health care procedures, they fix drug prices and more. Meanwhile in America we still think the cost of birth control pills is unaffordable and must be covered by insurance at 100%.  We are fools.

The Romney plan and others like it are nothing more than a giant cost shift to individuals with the false notion that insurance companies can somehow find a way to absorb those costs.  Don’t bet on it. 

If A – B = C where A is the cost of health care and B is what government pays and C is what you pay, if B is fixed while A increases what do you think happens to C? I failed algebra twice and even I can figure that out.

 From the Romney website:


Cutting Medicare and Social Security benefits: senior citizens do not have a right to special treatment. AARP is doing America a great disservice.

31 Oct

While the AARP runs TV ads threatening politicians that 50 million seniors will get even on election day if they touch Social Security or Medicare, there are a few of us who see it differently.  Take this comment from a blog post of mine that I fully agree with.

Keep up the good work. Some of us older folks who have been on “senior wefare” enjoying the unwarranted payments from Medicare and Social Security look in horror at the bills to be paid by our kids and grandkids. AARP, the largest special interest group in the country, has just sent out a request to contact our representatives to preserve our Social Security and Medicare benefits. It seems as if seniors should not have to share in the effort to reduce our national debt.

* * * * * * * * * * * *

From the AARP website:

AARP’s new national television ad tells lawmakers to cut waste and tax loopholes, not Social Security and Medicare. It urges lawmakers not to treat seniors like line items in a budget and lets them know that 50 million seniors are counting on them to protect their benefits.

Cuts to Medicare and Social Security benefits could:

dramatically increase health care costs for seniors and future retirees.
threaten seniors’ access to doctors and hospitals.
reduce the benefit checks seniors rely on to pay their bills.

Watch the latest advocacy video from AARP telling lawmakers that “before you even think” about cutting Medicare or Social Security, remember the 50 million seniors who have earned their benefits. Seniors are putting Washington on notice that they will speak out as long as Medicare and Social Security benefits are threatened .

Those of us who paid our Social Security taxes for decades must realize that those taxes paid the benefits of Social Security recipients during those decades and the surplus purchased special treasury bonds. Today the incoming taxes are insufficient to pay our benefits and those payments are supplemented by interest on bonds…there is no surplus to purchase bonds for our children.

Oops, the next generation wants theirs too.

Medicare is funded by a combination of payroll taxes, general revenue and current premiums. We may count on these benefits because we assume they will always be there, but we have been and are paying only a fraction of the cost.

Consider this from

“In 1959, seniors were the poorest demographic cohort, with 35 percent living in poverty, compared with 27 percent of children in poor families. In 2010, only 9 percent of people age 65 and older were poor, while 22 percent of those under 18 were living in poverty, according to U.S. Census Bureau data.

The trend coincides with a generational gap in federal spending. In 2008, per capita federal spending on those 19 and younger was $3,660, compared with $23,900 for those 65 and older, according to a report by the Urban Institute and Brookings in Washington.”

Have we “earned” our benefits any more than younger people have earned the right to support their families and save for their futures?  Have we earned these benefits so that we have a right to take more from future generations?

The AARP wants to cut waste and loopholes, so does everyone else. Except even if that is done, less spending and more revenue is needed for many areas of the federal budget, not just Social Security and Medicare although those two items equal more than forty percent of federal spending.

We seniors have a right to be treated fairly along with all other Americans. We do not have a right to be protected as a special class. We do not have a right to have our benefits protected to the detriment of others.

Nobody is talking about reducing benefits for existing beneficiaries, or reducing benefit checks. What has to be done is to reduce the future long-term liability of these programs and that means changing the growth of future benefits and asking future generations to pay more for these generous benefits. It may also mean that us seniors who no longer pay Social Security or Medicare taxes will have to give up some of our health care flexibility and pay a bit more for services. Why should it be otherwise for the common good?

Tell the AARP to go sell insurance.

2012 Medicare Part B premium increase only 3.6% after three years. Is there mischief afoot? How realistic are the CMS assumptions?

28 Oct

The Center for Medicare and Medicaid Services (CMS) has announced the 2012 Medicare Part B premium to be $99.90.

Me thinks there is mischief afoot.

While I have no figures to support this, but only forty years of experience developing premiums for employer plans, the Part B premium increase doesn’t add up.  Let’s think about this. A premium is $96.40 in 2009 and $99.90 in 2012. That’s a $3.50 increase or 3.6% (coincidently the same percentage as the increase in Social Security benefits) after three years of health care trend inflation or about 1.2% a year. Does that sound reasonable?  The Part B premium increase is constrained to some extent because the cost increase is spread over all beneficiaries unlike the past several years, bet even so, what’s up?  Keep reading.

On top of that the Part B deductible is decreasing by $22. Why?  The Part A hospital deductible increases slightly to $1156.

In 1967, the first year after Medicare had enrolled beneficiaries, the Part B deductible was $50. If that $50 had kept pace with general (not even medical) inflation, it would be $340 today. However, up until 2005 the deductible was fixed by Congress. Thereafter it is indexed to the increase in Part B costs for beneficiaries, so how does it go down even if there is only a modest increase in beneficiary costs?

According to an article in Kaiser Health News:

Officials attributed the premium surprise to several factors, including lower-than-expected use of medical care and slower cost growth. “Some areas of the program where we’ve had high spikes in the past have been virtually flat in spending growth, so I think today’s announcement just confirms a data trend of much lower utilization and spending growth throughout the Medicare program,” said Jonathan Blum, deputy administrator and director for Medicare at the Centers for Medicare and Medicaid Services.

However, the Medicare Trustees said this in their 2011 annual report released only five months ago in May 2011:

Part B costs, however, have been increasing rapidly, having averaged 6.9 percent annual growth over the last 5 years, and are likely to continue doing so. Under current law, an average annual growth rate of 4.7 percent is projected for the next 5 years. This rate is unrealistically constrained due to a physician fee reduction of over 29 percent that would occur in 2012 under current law. If Congress overrides this reduction, as they have for 2003 through 2011, the Part B growth rate would instead average 7.5 percent.

Kathleen Sebelius

You're doing a heck of a job, but how?

Is CMS now saying the trend in utilization is only about 1.2% a year and is expected to stay that way in the foreseeable future? Apparently they are. And why would you ever decrease a deductible, ever even if you had a good experience year? In this case it’s no doubt some shortsighted provision of the law.

Yet at the same time CMS officials are touting the growing use of “free” preventive services by seniors while Medicare benefits have expanded. In addition, CMS officials say the very modest premium increase assumes that Congress will not, repeat will not allow a nearly 30% cut in physician payment to go into effect in January. And no, this “good news” has nothing to do with health care reform.

Nope, something just doesn’t add up. After three years of growth we see only a 3.6% increase in premiums just five months after the Trustees Report say costs were rising at 6.9% and assuming the cut in physician fees does not take place, will rise at 7.5% in the future.   At the same time CMS says its 3.6% increase for 2012 assumes that the physician cut does not take place.

If you don’t believe the figures, read the statement below.

“Because we’ve kept next year’s premium increase lower than the cost of living adjustment to seniors’ Social Security benefits, the typical retired worker will have nearly $40 more per month in their pocket next year,” said HHS Secretary Kathleen Sebelius.

“Because we’ve kept next year’s premium increase lower…”. It’s the “we’ve kept” you have to worry about.

2012 Medicare Part B premium announced – lower than projected.

27 Oct

The U.S. Department of Health and Human Services (HHS) announced that Medicare Part B premiums in 2012 will be lower than previously projected and the Part B deductible will decrease by $22. While the Medicare Trustees predicted monthly premiums would be $106.60, premiums will instead be $99.90. Earlier this year, HHS announced that average Medicare Advantage premiums would decrease by four percent and premiums paid for Medicare’s prescription drug plans would remain virtually unchanged.

Medicare Part B covers physicians’ services, outpatient hospital services, certain home health services, durable medical equipment, and other items. In 2012, the “standard” Medicare Part B premium will be $99.90. This is a $15.50 decrease over the standard 2011 premium of $115.40 paid by new enrollees and higher income Medicare beneficiaries and by Medicaid on behalf of low-income enrollees.

The promise of Accountable Care Organizations (ACOs), hopefully not as illusive as it appears. Can you manage care without the patient involved?

24 Oct
Centers for Medicare and Medicaid Services (Me...

Better coordination of health care; something I and many others have harped on for years and most recently after first hand experience with the health care system. The Affordable Care Act attempts to address this issue for Medicare by encouraging formation of Accountable Care Organizations (ACO) including providing financial incentives through shared savings. Nobody should argue with such a goal focused on better, more coordinated care. Whether it can work for the Medicare population, whether there can be accurate measures of success and whether health care providers will embrace it to a high degree remains to be seen. The Center for Medicare and Medicaid (CMS) recently made their initial rules more flexible after receiving over 1,000 comments.

However, to be effective doctors, hospitals, long-term care facilities and other providers must form an organization that provides all or most of a Medicare patients (primary) care. The determination of this is made after the fact and since no limitations are placed on patients as to where they receive care it is hard to see how effective this can be. It is like expecting the results of a closed panel HMO from a more traditional health insurance preferred provider organization (PPO). For example, a patient may receive all primary care from the ACO doctor, but expensive surgery and follow-up care from providers not associated with the ACO and yet the ACO would be deemed responsible for coordinating care. It’s managed care for everyone except the patient.

 No doubt the assumption is that providers of primary care will refer all Medicare patients to members of the ACO.  That’s a heck of a lot of coordination. Some large health networks or groups may already be positioned for this effort, but in theory they already are coordinating patient care with positive results.

 Here are some excerpts from the CMS press release

The two initiatives launched today – the Medicare Shared Savings Program and the Advance Payment model – will help providers form Accountable Care Organizations and reflect the significant input provided by stakeholders as well as lessons learned by innovators in care coordination in the private sector.  

 The Medicare Shared Savings Program will provide incentives for participating health care providers who agree to work together and become accountable for coordinating care for patients.  Providers who band together through this model and who meet certain quality standards based upon, among other measures, patient outcomes and care coordination among the provider team, may share in savings they achieve for the Medicare program.  The higher the quality of care providers deliver, the more shared savings the providers may keep.  

The Advance Payment model will provide additional support to physician-owned and rural providers participating in the Medicare Shared Savings Program who also would benefit from additional start-up resources to build the necessary infrastructure, such as new staff or information technology systems.  The advanced payments would be recovered from any future shared savings achieved by the Accountable Care Organization. 

“As a physician I understand the complexities of caring for a patient who may have multiple providers,” said Donald M. Berwick, M.D., administrator of the Centers for Medicare & Medicaid Services (CMS).  “This opportunity to coordinate care among providers could greatly improve the quality of care Medicare beneficiaries receive.”

Both the Medicare Shared Savings Program and Advance Payment model create incentives for health care providers to work together to treat an individual patient across care settings – including doctors’ offices, hospitals, and long-term care facilities. 

Unlike a managed care plan, Medicare beneficiaries will not be locked into a restricted panel of providers.  Rather, a determination of whether an Accountable Care Organization was responsible for coordinating care for a beneficiary will be based on whether that person received most of their primary care services from the organization.

Ask your doctor what he or she knows about Accountable Care Organizations.

  • ACO Final Rule Released (
  • (

Medicare Part B Premium and Social Security COLA for 2012

14 Oct

I am going out on a bit of a limb here, so remember this is not all final. I have been reviewing a variety of sources and it appears that for 2012:

The Medicare Part B premium will be about $106.60, a 10.6% increase over the current premium for hold harmless beneficiaries at $96.40. This also means that those Medicare beneficiaries who are paying more than $106.60 will see a decrease in their monthly premium. Why such an apparent modest increase? Because now, given there will be a Social Security COLA, all beneficiaries are in the pool to offset the costs of Part B, not just the 25% who have not had their premium frozen for the last several years.

Given we are still looking for about a 3.5% increase in Social Security benefits, you can now do the math and see what your net increase in monthly Social Security is likely to be.  For example, let’s say your benefit is $1,000.  A 3.5% increase gives you $1,035 less the increase in Part B of $10.20 for a net new benefit of $1,024.8 or a net percentage increase of 2.48%.

If I am right in all this, you can send flowers.  If I am wrong, I will run for President and blame someone else.

Medicare annual enrollment for 2012 – wait for missing information

10 Oct

Last week I received the 2012 Medicare Handbook and a notice about the start of open enrollment to select a Medicare plan for the following year. Enrollment starts October 15th.

Having managed corporate annual open enrollment for nearly fifty years, I know there are two things that are critical to people making informed choices; the plan provisions and the price. No employer would think of starting an open enrollment without this information. Apparently, that is not obvious to the folks running Medicare.

Neither the premium for Part B of traditional Medicare nor the deductibles for Medicare are currently available, even on the website. Last year this information was not available until mid-November. The law requires that the Handbook be distributed two weeks before the start of the enrollment period regardless if the critical information is available. Did it ever occur to anyone to start enrollment when the critical information becomes available?

If you are considering various options for your Medicare coverage, you might want to wait until you have the missing information.

Lower premiums for Medicare Advantage plans?

10 Oct

A quote from a newspaper article:

“Thanks to the Affordable Care Act … on average, Medicare Advantage premiums will go down next year and seniors will enjoy more free benefits and cheaper prescription drugs,” Health and Human Services Secretary Kathleen Sebelius said in a release.

The Affordable Care Act has led to average premium declines for the second year in a row: 2012 premiums are projected to be 11.5 percent below 2010 premiums.

You see, there is nothing in the Affordable Care Act that lowers costs for these plans which is quite different from lowering premiums. In fact, the Act lowers payments to these plans and increases some benefits thus increasing costs. Some plans have dropped from participation.

Think of it this way, real Medicare Part B premiums are $115.00 while the law limits many people to $96.00 … temporarily

Is it possible that the Medicare Part B premium could go down for 2012?

7 Oct

The short answer is yes, that is possible for some Medicare beneficiaries. Most beneficiaries have had their Part B premium frozen since 2009 due to the hold harmless provision in the law (an increase in the Part B premium cannot result in a net decrease in the Social Security benefit). This means that the increasing cost of Medicare has been spread among fewer people, those who are not eligible for the hold harmless provision.

Assuming there is an increase in Social Security benefits in 2012, a virtual certainty at this point, all hold harmless beneficiaries will pay more for Part B Medicare in 2012. Spreading the cost increase among all beneficiaries means that the individuals who have been paying higher premiums than would have been required in the absence of the hold harmless provision may see a decrease in their monthly premium.

Reporting fraud and abuse under Medicare, not as easy as it should be, but who cares?

6 Oct
A member of the audience holds a "Thank Y...

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I like to think of myself as a good citizen and since we all want to help keep health care costs down, helping Medicare spot fraud and abuse is a good idea…until you try it.

A few weeks ago I visited a major pharmacy chain and received my annual flu shot (or as they call it in England a flu jab) for free. Don’t you love when you get something for free even when it isn’t?

Yesterday I received my Medicare Explanation of Benefits (EOB) for this service. However, the EOB says I received Pneumococcal vaccine for $13.25 and Administration of influenza vaccine for $16.74. Since this service is “free” Medicare paid the total fee in full for each listed service.

Nobody said anything to me about receiving a vaccine for pneumonia so I went back to the pharmacy and asked what they were giving out. Only vaccine for the seasonal flu and H1N1 in a combined shot I was told. I mentioned the Medicare EOB and was told it must be a mistake. Indeed it may be a mistake both in billing and letting me think I received two different vaccines.

Now back to this good citizen stuff. I wanted to report this error or fraud to Medicare so I went to to see how to go about it. Here is what I found.

How to Spot & Report Fraud

Spotting Fraud

When you get health care services, record the dates on a calendar and save the receipts and statements you get from providers to check for mistakes. Compare this information with the claims Medicare processed to make sure you or Medicare weren’t billed for services or items you didn’t get.

3 Ways to Review Your Original Medicare Claims

1. Look at your Medicare Summary Notice (MSN).
2. Visit
3. Call (). TTY users should call .

Reporting Fraud

If you think a charge is incorrect and you know the provider, you may want to call their office to ask about it. The person you speak to may help you better understand the services or supplies you got. Or, your provider may realize a billing error was made.  If you’ve contacted the provider and you suspect that Medicare is being charged for a service or supply you didn’t get, or you don’t know the provider on the claim, call (). TTY users should call

You will notice that the number to call to report fraud is the same number you use to question a claim. What you get is a voice response system that takes you through endless and irrelevant menus and of course you must enter your personal information. Finally, when you discover that none of the menus available mention reporting fraud, you are eventually given the instruction to say “agent” and you are connected with someone to talk to…ah, not so much. What I got was the proverbial “all of our agents are busy assisting other customers” Then I was told the wait time was about ten minutes. By this time I had already spent five minutes or more in frustration finding my way around the interactive system and I was in no mood to sit and wait for another ten minutes so I hung up.  Hey, it’s only money.  In this case if such a mistake applied to all who received a flu jab, it only adds up to about $530,000,000.

Let’s hope this isn’t fraud, because they are not going to hear more about it from me. You would think that if the bureaucracy was truly interested in learning about fraud or even ongoing mistakes that cost money, there would be a dedicated telephone line where you immediately got to talk to a person and that you could also begin the process on-line to save everybody time and money.

There I go again thinking like a corporate executive in the private sector where what you spend needlessly actually does matter. You see, actually saving money in the Medicare bureaucracy matters little unless the money supposedly saved is double counted for some new spending program or is part of the daily political rhetoric come election time.

Am I being too cynical?

Medicare Part B premium 2012 and the possible impact on your net Social Security benefit

5 Oct

As we get closer to 2012, you will read more about Medicare Part B premium increases. Some commentators will call a modest percentage increase a whopping increase based on the fact that for most Medicare beneficiaries there has been no increase in the premium since 2009. However, that does not mean costs have not increased as have the real premiums for Part B.

Consider this from

Most beneficiaries will continue to pay the same $96.40 or $110.50 premium amount in 2011.  Beneficiaries who currently have the Social Security Administration (SSA) withhold their Part B premium and have incomes of $85,000 or less (or $170,000 or less for joint filers) will not have an increase in their Part B premium in 2011. 

For all others, the standard Medicare Part B monthly premium will be $115.40 in 2011, which is a 4.4% increase over the 2010 premium.  The Medicare Part B premium is increasing in 2011 due to possible increases in Part B costs.  If your income is above $85,000 (single) or $170,000 (married couple), then your Medicare Part B premium may be higher than $115.40 per month. 

Note that the real increase in 2011 was 4.4%, a modest increase by health care inflation standards. Let’s assume the 2012 increase is also 4.4% thus driving the standard Part B premium to $120.48. However, it is also expected that there will be Social Security COLA in 2012 meaning that the Part B premium will no longer be frozen at the 2009 level of $96.40. Therefore, a Medicare beneficiary who has benefited from a frozen Part B premium could see a jump in premium from $96.40 to $120.48 (estimated at this point) or a 24.9% increase. That increase covers the growth in costs for the four years from 2009 through 2012.

This is what happens when premiums are artificially held at levels that do not support growing costs. Medicare beneficiaries who were protected by the law because of no Social Security COLA may have benefited for the last three years, but 2012 will be the year to play catchup. It has nothing to do with Obamacare, but rather simple math and a Social Security law that ignores the unintended consequences of not allowing revenue (premiums) to keep up with expenses.

If you apply an estimated 2012 3.5% increase in your gross Social Security benefit and subtract a possible Part B premium increase of $24.08 (assuming you currently pay $96.40 for Part B), you will have a general idea of the impact of all this on your net Social Security payment. However, your Social Security payment will not go below what it is today in any case.

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