Myths Are Broadcast Regarding Seniors and Health Care Reform
Through the courtesy of TD Bank and the Chester County Bar Association, I had the opportunity last Tuesday, September 14, to address a group of lawyers and bankers for a continuing legal education program regarding “Health Care Reform.”
The topic was massive and I wondered if someone would ask whether I read the whole act (I read it quickly), but it gave the chance to review again the provisions of the law and its effect on average people. Of course, with my background, I wanted to be able to delve even more deeply into senior issues but employer and employee considerations were important issues, too.
Having spent a great deal of time since last March following the law, its provisions and multiple commentaries, I have been somewhat disturbed then over the past week as the 30 second or less commercials regarding the law and seniors relay some very misleading and inaccurate information. The ads appear in connection with the upcoming November elections.
One of the first statements made by a senior actor in an ad is that Health Care Reform would take $500 billion (sometimes described as $550 billion) out of Medicare. The implication is that Medicare would be cut. This is not the case.
The figure was taken from the Congressional Budget Office projection of reduction in future increases over the next 10 years. In fiscal year 2020, the projected outlay is still $929 billion as compared to current outlay of $519 billion in 2010. The reduction in future increases would amount to about 7%.
As to benefits, the law contains a specific provision prohibiting reduction in Medicare benefits. “Nothing in the provisions of, or amendments made by, the Act shall result in a reduction of guaranteed benefits under title XVIII of the Social Security Act.” (The title of federal law establishing the Medicare program.)
On a related note are changes to Medicare Advantage subsidies. Readers might recall multiple columns I wrote on Medicare Advantage and Medicare PFFS (Private Fee for Service) plans. Medicare Advantage is the current name for the older Medicare HMO. PFFS plans went further and permitted maximum flexibility to insurance companies in writing coverage. A fact not generally known is the massive subsidies paid to insurance companies by the taxpayer for Medicare Advantage and Medicare PFFS plans. The law would change the payment schedule to insurers offering Medicare Advantage and Medicare PFFS.
While the general discussion has been that MA plans and PFFS plans offered enhanced coverage such as dental and vision coverage because of their taxpayer subsidies, my experience with clients whose coverage was sometimes not accepted by providers indicated to me that this was not always the case. The American Medical Association agreed with me.
In October, 2007, in a paper “Medicare Advantage: The Facts,” the AMA reported that, while insurance companies with Medicare Advantage plans received from the government on average 112 percent and PFFS plans received 119 percent of the cost of Medicare alone or Medicare with a Medigap plan, half of the physicians surveyed stated they received lower compensation, three out of five reported it took longer to get paid, and half experienced denial of services that were covered by basic Medicare.
A second claim made in some ads is that seniors would not be able to keep their doctors because of health care reform. There is nothing in the act to prevent seniors from keeping their physicians. The actual concern of physicians regarding Medicare for several years has been a provision in the 1997 Balanced Budget Act which would reduce physicians’ compensation for Medicare patients. Each time that the issue has been addressed by Congress, it has backed away from these reductions with a brief exception this year when a minority in Congress were able to hold up the extension.
Provisions in health care reform that benefit seniors include the following.
Elimination of the “doughnut hole.” Under the prior law, seniors under Part D would not receive prescription drug assistance after they had spent $2,830 until they paid another $4,500 out of pocket. This is changed. Rebates were sent this year for $250 under the new law and discounts will be offered in 2010. The law will gradually shrink the gap until the doughnut hole is gone by 2020.
Home health care. Incentives will be provided to the states to offer home and community based services for seniors. Spouses of Medicaid at-home recipients who previously did not receive the income and asset protections of spouses of nursing home residents would receive this “spousal impoverishment protection.”
Many preventative services under Medicare A or B will be offered without co-pays or deductibles.
For those who are interested, additional information can also be found at www.factcheck.org, www.medicareadvocacy.org, and www.kff.org.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.