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“Don’t touch my Medicare!”

December 4, 2012

Let’s talk about Medicare.  I’ll try not to make it too boring.

There’s been alot of sturm und drang about changes to Medicare with the Affordable Care Act.  Lot’s of misinformation and confusion.  The truth is both good and bad.  The good: prescription drug coverage.  The bad: cuts.

PRESCRIPTION DRUG COVERAGE.  In 2003 when Medicare started it’s prescription drug program, congress made a big mistake in the name of compromise.  It decided to cover all drugs but only when you spend a little or alot.  In the middle you’re on your own.  Some of my readers already know this all too well.  Standard Medicare drug benefit has $310 deductible, so you pay that first.  They you pay 25% of the cost.  Until you get to $2,830.  After that you have to pay the whole thing until you get to $4,550 of your own money.  If you do the math, you’d have to be spending more than $6,440 on drugs before you get covered 95%.  That’s fine if you’re on, say, a $2,000/month AIDS drug, but for most people that gap in the middle is formidable.  According to David Nather, only about 14% of people actually fall into the gap, but still.  It’s a big gap. The new law is going to fill in the gap.  Over 8-10 years.

SCREENING TESTS. You won’t have to pay co-insurance or deductible on preventive benefits recommended by the US Preventive Services Task Force.  See my blog of two days ago for the problems with that one.

CUTS.  There are several.  The sky will not fall.

1. Medicare Advantage.  Medicare provided by private insurance companies.  These will get less federal money.  You might get less fringe benefits like gym memberships but you won’t see cuts to anything vital.  Go to to compare advantage plans to see if you want to switch.

2. Medicare providers.  Some providers will still see increases every year, but they will be smaller.  So if you have a home health aide, that funding will stay and increase, but in smaller amounts over time.  The general idea with this is that medicare spending is increasing faster than everything else, so the government will just slow it down by giving less.  There are multiple possible problems with this.  Providers are supposed to get more efficient  but there’s always some that will just cut corners more or stop taking medicare patients altogether.  Valid questions.  No answers.

3. Pilot programs.  Experiments in small areas with different pay scales and organizing systems.  Health and Human Services is in charge of this.  You may or may not see them.

As of 2010 that’s what we knew.  Stay tuned.


From → Health Insurance

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