Wednesday, November 14, 2012

Medicare Reform - Asking Seniors to Pay More

Medicare reform is coming. Which cuts will be enacted, and how you will be affected? Doctors and other medical providers face a 26% automatic pay cut in January unless Congress acts fast.

Doctors are healers in a sense, but they are also small business owners. They can no more afford to take a 26% pay cut than you can afford a similar cut in your Social Security check.

The danger of a fiscal cliff is just 6 weeks away and we have a lame duck Congress. Medicare reform is not completely on their radar

Medicare reform - Which cuts will be enacted, and how you will be affected?

Don't kid yourself. All of us will be expected to share in the hurt of Medicare reform.
Lawmakers are wrestling with finding a balance between asking beneficiaries to pay more for Medicare services and reducing payments to Medicare providers, such as hospitals and nursing homes. Those providers, who are already expecting their Medicare payments to grow at a slower rate over the next decade as part of the 2010 health law, likely would fight additional cuts.  And beneficiaries, many who are on fixed incomes, will not want to pay more for Medicare services.
Kaiser Health News, "Fiscal cliff Medicare"

We hear about Medicare reform as it affects provider cuts, but how often do you hear the phrase "but you will have to pay more"?

Politicians hate to deliver bad news, especially when it involves a large voting block of angry seniors. That is why they introduce change as impacting others, not you.

Doctors earn more than most folks. At some point the government says "they have earned enough". According to some politicians, it is time for high income earners to pay their "fair share".

Of course their fair share, as defined by DC, is higher taxes and a 26% pay cut.

Both of those ideas clash with your access to health care. Why will a doctor be willing to treat a senior on Medicare when they can earn twice as much with non-Medicare patients?

That is only one way in which Medicare reform will impact you.

The folks in Congress also want you to pay more for your insurance, and pay more when you receive medical services.
Members of both political parties and some health care analysts have long thought that spending could be slowed if patients, including Medicare beneficiaries, put up more of their own money for health services. Some have suggested raising seniors' share of the Medicare Part B premium (which covers doctor visits and other outpatient services) from 25 percent to 35 percent and imposing co-payments for home health services or the first 20 days of a skilled nursing facility stay.
You might want to read that again.

If Congress gets their way, Medicare reform means your Medicare Part B premium will rise, your copay's will rise, and your Medigap premiums will rise.

Why will Medicare supplement premiums rise?

Benefit rich plans such as Medigap plan F pay 100% of the balance of Medicare approved Part A and Part B expenses. When Medicare increases the deductibles or coinsurance your Medigap plan is obligated to pay a greater portion of each claim. When they pay more, your premiums must rise.

Some Medigap carriers are already reacting and increasing renewal rates at a higher percentage for plan F vs. other plans such as G. One of our least favorite Medicare supplement plans will increase rates 13.3% across the board.

Our more competitive carrier is raising rates 7.5% on plan F but only 6% on plan G.

Which plan would you rather have?
Raising beneficiaries' share of Part B premiums would bring the program closer to its original 50-50 split between the federal government and beneficiaries, proponents say. And they add that greater cost-sharing for services would discourage overuse of care.
Raise your hand if you believe you are over-using your Medicare benefits and think you should pay more as a way of discouraging abuse.

Medicare reform to the folks in Washington means you should you should pay more so you don't abuse your privileges. These folks are out of touch.

The election is over so it is too late to "throw the bums out" but that doesn't mean you can't call your Congress person and give them a piece of your mind. Do it now!
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