Health reform debate often misrepresents changes to Medicare

The Chattanooga Times Free Press: Seniors, as well as doctors who treat Medicare patients, "have been shaken up by news that health care reform efforts are largely funded by about $455 billion worth of projected savings in the government health insurance program for the elderly. Enrollees fear that the changes, to be implemented over 10 years, could chip away at their benefits and worry that lower payments will force providers to stop taking new Medicare patients. ... The $500 billion in 'cuts' under the health reform package aren't direct hits to the current Medicare budget and include no reductions to traditional Medicare benefits, said Brooks Jackson, director of FactCheck.org, a project of the Annenberg Public Policy Center at the University of Pennsylvania. The cuts come largely from limits to growth in future Medicare spending over the next 10 years and lower government funding of private Medicare Advantage plans, he said." Specifically, the "cuts to Medicare Advantage plans are designed to bring the expensive plans back in line with the cost of regular Medicare" (Bregel, 3/24).

The (Quincy, Mass.) Patriot Ledger: "AARP and other advocates for seniors continue to insist that a landmark health care bill passed by the House on Sunday will strengthen the overall Medicare program and benefit seniors. The cuts will come from Medicare Advantage plans offered by private insurance companies and operated much like health maintenance organizations. About 25 percent of all Medicare recipients get health care through these plans. The plans generally reduce what people have to pay from their own pockets for medical services. That's because the government pays the plans 13 percent more than it costs to cover seniors in traditional Medicare." AARP has been supportive of the legislation for a number of reasons, including that it "places controls on prescription drug costs" and "will prevent insurance companies from dropping people who develop major illnesses" (Scheible, 3/23).

The Associated Press provides a timeline of immediate and long term changes that will affect Medicare beneficiaries and others. Among the changes are that the coverage gap in the Medicare prescription program will be narrowed starting this year by providing a $250 rebate to seniors who have spent $2,830 and reduce "projected Medicare payments to hospitals, home health agencies, nursing homes, hospices and other providers." In 2011, those in the coverage gap will get a 50 percent discount on brand name drugs with other drug discounts scheduled to "close the gap by 2020". The new legislation will also increase Medicare pay to "primary care doctors and general surgeons practicing in underserved areas, such as inner cities and rural communities" and "freezes payments to Medicare Advantage plans, the first step in reducing payments to the private insurers who serve about one-fourth of seniors" (Alonso-Zaldivar, 3/23).

Meanwhile, The [Northeastern, Penn.] Times Leader reports on how national reform will bring local changes. "Area hospitals will share about $30 million in Medicare funds included in the newly enacted health care reform legislation. The funding, through an extension of the Medicare Wage Reclassification Index, ensures the payment for services is in line with those made to hospitals in larger metropolitan areas. Federal lawmakers said they would work on a permanent fix to replace the periodic extensions they have secured. Over the past 10 years, hospitals in Northeastern Pennsylvania received more than $200 million in additional funds" (Lynott, 3/24).

Meanwhile, Kaiser Health News also reports on that increased Medicare funding for some states. "A last-minute deal to win votes for the health care overhaul underscores the political dilemma for Congress as it tries to reduce health care costs. As part of a manager's amendment to the bill, House Speaker Nancy Pelosi agreed to increase Medicare payments by $800 million over the next two years to hospitals and physicians in Iowa, Wisconsin, Oregon and other states that argue they are low-cost, efficient providers of medical care. ... Proponents of the additional funding say it is simply a matter of fairness: more efficient, low-cost Medicare providers should not get paid less than providers who are not as efficient and cost the government more." Meanwhile, "some health care analysts questioned whether increasing Medicare reimbursement rates as Congress tries to overhaul the program was the right choice" (Carey, 3/23). 

This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.