Medicare: Playing games and causing pain

By Will Parry

President Obama has drawn up a plan to reduce the federal budget deficit by another $3 trillion over ten years, including $320 billion in cuts in the Medicare and Medicaid programs. His proposal will go to the Congressional “super committee” for their consideration.

The White House admitted the plan would impose “a lot of pain,” and Robert Pear, writing in the New York Times, said the pain is certainly there in the Medicare and Medicaid cuts.

“Mr. Obama proposed higher premiums and deductibles for many Medicare beneficiaries” and would “start charging co-payments to frail homebound older people who receive home health services,” Pear said.

The Center for Medicare Advocacy (CMA) judged the Obama plan as an improvement over the Republican voucher proposal but found some aspects of it “troubling,” including “increased cost-sharing for beneficiaries – especially for people with long-term conditions.”

The Obama plan would require new beneficiaries to pay higher deductibles before Medicare’s excellent coverage kicks in. It would sock new beneficiaries who buy private Medigap policies with a 30 percent premium increase. It would charge higher premiums to higher-income beneficiaries. And starting in 2017, the plan would saddle new beneficiaries with a co-payment for home health care.

Such co-payments would “significantly increase out-of-pocket costs for many low-income widows with multiple chronic conditions,” said Howard J. Bedlin, vice president of the National Council on Aging.

On the positive side, the President would maintain the present eligibility age for Social Security and Medicare; would not tamper with the provision for annual cost-of-living adjustments; and would reduce drug costs for low-income beneficiaries.

CMA offered an alternative Medicare proposal that would reduce the federal deficit substantially without shifting the cost to the program’s beneficiaries. Here is CMA’s “Six-Point Solution”:

• Negotiate drug prices with the pharmaceutical companies. The industry picked up 47 million customers with the enactment of Medicare drug coverage in 2003, but ever since has adjusted the prices of its products only in one direction -- upwards.

• Stop paying private Medicare plans more than traditional Medicare.

• Include a drug benefit in traditional Medicare.

• Extend Medicaid drug rebates to Medicare dual eligibles. People eligible for both Medicare and Medicaid make up one fourth of all Medicare drug users. Rebates already available to those on Medicaid should be extended to all dual eligibles.

•Lower the age of Medicare eligibility. Lowering the age of eligibility to 55 would add revenue from people likely to need less care than older enrollees. And it would provide Medicare’s excellent coverage for millions aged 55 to 64 who are now unable to afford private insurance.

• Let the Affordable Care Act do its job. Beat back all efforts to repeal or defund health care reform. Many provisions in the new law will reduce health care costs for all Americans.

Judith Stein, Executive Director of the Center for Medicare Advocacy, is appealing for citizen pressure on President Obama and the Congress.

“Tell them that shifting costs from the federal government to beneficiaries and their families – whether through a voucher program or increased cost-sharing – is a perversion of Medicare’s original intent to protect older people and their families from illness and financial ruin due to health care costs,” Stein said, adding:

“Plus it’s not needed for deficit reduction!”