What is Medicare for All, and Medicare for More?

August 20, 2018     About this blog:  click here

What is Medicare for All, and Medicare for More?

If you listen to or read the news much, you’ve probably heard the term “Medicare for All.” If you read the news closely, you may also have heard of “Medicare for More.”

What do those terms mean?   They are both ideas – policy proposals – for possible future changes to Medicare.  Neither have been enacted by Congress, yet.

Let’s take a closer look.

#1:  Medicare for All

On the face of it, it seems straightforward:  The title implies that everyone in America who is not already on Medicare, would become enrolled in it as well.   The actuality would be more complex than that.

A big question is whether everyone would simply become part of the existing Medicare program, or whether there would be some changes to it.   Another question is whether the payments for it would stay the same, or change.

#2:  Medicare for More

This obviously means that more people than those currently eligible (65 and up, or under 65 with disabilities) would get on Medicare, but not everyone.  That leaves a lot of options.

The simplest way is to add more ages besides 65 and up.  Some proposals that have been floated are:  55 and up; 50 and up; or 50-55 and up plus people below age 18 or 21.

Once some additional ages are added, in theory more could be added over time, until perhaps everyone is on Medicare.   That would be a gradual way of getting to Medicare for All, over a period of years.

First question:  How would this work for different situations?

Whether you’re talking Medicare for More or Medicare for All, there are a few different situations to consider.

People who have no insurance now would simply start getting covered by Medicare.

People who choose and buy their own insurance policies would switch from that to Medicare.  This already happens for many people when the hit their 65th birthday.

For people who get health coverage from their employer, it means that they would switch off that coverage to Medicare instead.  The employers would no longer be arranging health insurance for their employees.

A huge benefit of that is people would not have to depend on a certain job in order to get health care.  They would get the same health care coverage no matter where they worked, or whether they worked at all.

For everyone who goes onto Medicare – if the way Medicare works does not get changed – there  are two choices:  Go on Medicare Parts A and B, and buy a Medicare Supplement insurance policy; or

Go on Medicare Advantage, which is actually Medicare Part C – in the form of a policy from an insurance company.

People would also get on Medicare Part D, which is for drug coverage.

Most people would pay a premium of $134 per month to the government for their Medicare coverage, plus whatever premium they pay to an insurance company for either a Medicare Supplement or a Medicare Advantage policy, and for drug coverage.

Second Question: How would this get paid for?

Medicare’s revenue currently comes from:  Monthly Medicare premiums paid by enrollees (19%); payroll taxes from employees and employers (36%); and federal tax money appropriated by Congress (45%).

With Medicare for More or Medicare for All, employers would no longer be paying part of their employees’ health insurance premiums.  Therefore, it could make sense for them to pay a higher payroll tax than before, and pay about the same in total as before.

An additional idea is to put the Medicare tax not just on wages, but on unearned income – that means investments like stocks and bonds.

And, since a portion comes out of federal revenues, more Medicare funds could be generated by making the federal income tax more progressive – that is, have the richest top 1% or 2% pay more of their fair share of the overall tax burden.

Third Question: Should there be changes to Medicare?

If we end up going to Medicare for More or Medicare for All, that would be a good time to make some improvements in how Medicare works.  Here are some ideas:

Have Medicare A and B pay a much higher portion of medical costs, instead of the roughly 80% that it pays now.  The coverage could be good enough for people not to have to buy Medicare Supplement insurance policies.   That would be much, much simpler.

Medicare Advantage (Part C) could be eliminated, since it costs the government more per person than does Parts A and B.

If it isn’t eliminated, then at least it would be a good idea for the government to start tracking and regulating the insurance companies’ profits off of it.  That would save money.

Medicare could also stop its experiments on “pay for performance” and “accountable care organizations” which were hoped to save money, but have failed to do so.

If Medicare is changed so it does not use insurance middlemen anymore, we would not only save money spent on corporate profits, but also greatly reduce spending on administration, ads, and mountains of paperwork.

The overall cost of health care would be reduced, by eliminating expense which is not actual health care.

You could call it:  Improved Medicare for More, or Improved Medicare for All.

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How does Medicare pay Doctors and Hospitals?

August 13, 2018     About this blog:  click here

How does Medicare pay Doctors and Hospitals?

If you are on Medicare, it can be pretty confusing – when you get a doctor or hospital bill – as to who is paying what, and especially just what Medicare is paying.

To make it more baffling, the terms on the hospital and doctor bills often don’t clearly tell you.

So, it would be nice to learn what Medicare is supposed to be paying, at least.

Medicare not paying at all?

The first issue, which is usually fairly clear, is whether or not Medicare is refusing to pay anything at all.  Sometimes Medicare denies the doctor’s claim.

The coding system by which doctors and hospitals submit bills to Medicare is extremely complex, with a lot of room for error.  These errors can cause Medicare to not pay, until it’s cleared up.

Plus, Medicare can refuse something on the grounds that it is not medically necessary.  When this happens, the doctor’s office or hospital can submit more information, and that sometimes results in Medicare deciding to pay.

If you notice this on one of your medical bills, then contact your doctor’s office.  They should be able to re-submit the bill.  In many cases, Medicare will then approve it.

Payments under the two types of Medicare:  A& B, and Medicare Advantage

With Medicare Parts A and B – also known as “original Medicare” — the government directly pays for your doctor and hospital for their outpatient services.

The government sets an official rate for each service, and gives the medical provider 80% of that amount. The remaining 20% is paid by your Medicare Supplement insurance policy.

For hospital in-patient services, the government directly pays all but $1,340 of the bill.  Part or all of the remainder is paid by your Medicare Supplement insurance policy.

Meanwhile, your insurance policy sets its own deductibles and co-payments that you have to pay towards the doctor and hospital bills.

Medicare Advantage – also known as Medicare Part C – works very differently.   This kind of Medicare is in the form of an insurance policy, in which the government gives a flat monthly amount (about $800) to the insurance company.  You pay a monthly premium to the company as well.

The insurance company then decides how much to pay each provider for each service, and pays the entire amount to them.  Medicare Advantage policies generally pay medical providers about the same, or a little better, than they would get paid by original Medicare A and B.

The medical provider cannot send any bill to the federal government because, in essence, all of your Medicare money has been given to the insurance company.

When you sign up for a Medicare Advantage policy, you probably don’t realize that you are officially taking yourself off of Medicare A and B, and telling the government to give your Medicare money to the Insurance company you picked.

And again, your Medicare Advantage insurance policy sets its own deductibles and co-payments that you have to pay towards the doctor and hospital bills.

Networks of Medical Providers

The two different types of Medicare make a difference as to which doctors and hospitals you will see.

With Medicare A and B (“original Medicare”), you can go to any doctor or hospital anywhere in the country which accepts Medicare.  That’s virtually all of them.   The government will give its 80% payment to any of these.

With Medicare Advantage, you can only go to certain doctors and hospitals to get full coverage.  Some of these insurance policies will let you go to one that are not in their network, but you will pay bigger deductibles and co-pays to do that.

The insurance company has decided which doctors and hospitals are in its network, and which are not.

Keeping Track:

If you are on Medicare A and B (“original Medicare”) and have a Medicare Supplement insurance policy, you will get, from Medicare, a Medicare Summary Notice (MSN) every 3 months.

It lists your health insurance claims, and tells if Medicare paid the claim and if it’s been sent to your  insurance company.  You can compare your MSN to any statement you get from the insurance company and medical bills you get from providers.

If you have a Medicare Advantage insurance policy, you should  receive a monthly statement which tells each hospital and medical service you had.  It tells the amount billed (what the hospital or clinic wish it were paid);  the amount approved by the insurance; how much the insurance paid, and how much is left for you to pay.

 

By the way:  Medicare A and B is called “original Medicare” because it was the only form of Medicare when it was created, in 1965.    In the 1970’s a second form was created, called Medicare HMOs.  These HMOs have continued, but were given the new name of Medicare Advantage in 2003.

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What is the Prescription Drug “Donut Hole”?

August 6, 2018     About this blog:  click here

What is the Prescription Drug “Donut Hole”?

It has something to do with Medicare insurance for prescription drugs, but what is it?  And why is it?

It sounds sweet and tasty, but the reality is far different.  Unlike real donut holes, which are a solid  ball of dough, the Part D Donut Hole is a true hole – in coverage.

It’s a feature of Medicare Part D, which is coverage for prescription drugs you buy for yourself, such as at a pharmacy, or mail order, and take at home.

Medicare Part D is the one and only way that Medicare helps pay for these medications.  It is in the form of a policy that you buy from an insurance company.

The government gives the insurance company a monthly payment, of roughly $120.  You pay a premium to the insurance company on top of that.

The premiums vary from around $30 to $100 per month, depending on how much coverage you want to buy.  Higher premiums mean less or no annual deductible, and smaller co-pays.

Let’s talk about deductibles.   Most all health insurance policies have an Annual Deductible.  Let’s say, for example, your Annual Deductible is $500.

That means, starting Jan. 1, you have to pay all of your health care bills yourself, until you have paid out $500.  Then the insurance kicks in, and starts paying on your medical bills after that.

The insurance continues to work that way through the end of the year.  Then, next January 1, you have a new Annual Deductible to deal with.

Enter the Donut Hole

The Part D Donut Hole is a new invention, which never existed before in insurance.   It is sort of like a SECOND deductible, which occurs partway through the year.

Part D coverage works in three stages:

First Stage:  Starting January 1 of each year, you have an Annual Deductible to meet, just like any other health insurance policy (unless you pay a huge premium, for a policy without this deductible).

Second Stage is the dreaded Donut Hole:  If your total prescription drug expense for the reaches $3,750, then the Donut Hole kicks in:  Your insurance coverage stops paying anything, period.

The $3,750 number is the total of what you have paid out, plus what the insurance company has paid.

If your total drug expense stays below $3,750, then good news – you never fall into the Donut Hole.

If you do fall in the Donut Hole, your consolation prize is that the prescriptions you now buy out of  your pocketbook will have reduced prices:  65% off for brand name drugs, and 56% off for generics.

Third Stage: If you have a very large amount of drugs, which means more than $5,000 total expense through the year, then good news:  The coverage kicks in again — a second time — and keeps covering you through Dec. 31.   Then of course, on Jan. 1 it’s to time to face a new Annual Deductible.

Who falls in the Donut Hole?

As drug prices continue to rise very steeply, more and more people are falling into the Donut Hole, and many are falling into it earlier in the year than before.

Most people who do fall in, stay in it for the rest of the year.  In other words, their total expense doesn’t hit $5,000, and so the third stage –  of coverage resuming – never happens to them.

What can I do about the Donut Hole?

A very important thing to do is to look at the monthly reports that your Part D drug insurance company sends you.  The reports tell you the TOTAL expense for your drugs so far in the year (including what the policy paid).

It also tells you how many dollars away you are from falling into the Donut Hole.

If you are getting close, one thing you can do is to talk to your doctor(s) to see if they can switch any of your medications to less expensive drugs which serve the same purpose.

Why was the crazy Donut Hole invented in the first place?

It was created as part of Medicare Part D, in 2003.  The reason for its invention goes like this:

Congress was willing to spend money on this new benefit for drug expenses, but only a certain amount of money.

Congress also refused to let Medicare negotiate with the drug companies for lower prices, which would have saved a huge amount of expense.

And, Congress knew that the portion to be paid by Medicare recipients – that is, the monthly premiums to insurance companies – could not be too high, or else not as many people would buy it.

So, something had to give, in order to make the dollar amount work out to the amount that Congress was willing to spend.

That’s when some genius came up with the idea of the Donut Hole.  In essence, it makes people who have above-average drug expense pay a lot more out of pocket, while everyone else can enjoy affordable premiums.

That means:  If you don’t need many drugs, you’re treated better.  If you do need more drugs – or more expensive ones – tough luck, you have to shell out quite a lot more.

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