Medicare is a bear to write about. It’s tough for beneficiaries to understand, and unclear news stories only serve to compound their confusion. That’s what last week’s LA Times story on Medicare costs did. The paper’s thesis was that seniors’ medical bills “could jump hundreds or even thousands of dollars,” and the top supported that storyline. A Medicare expert from Brookings opined that people would pay more. Yes, that’s true. Some among the elderly are better off than when Medicare was enacted, but half still live on incomes below $22,000—also true. There’s interest in charging beneficiaries more as a way to slow spending, which is happening in the commercial market. True again. People may not realize Medicare’s benefit package is not very generous. Beneficiaries know that and that’s why polls show they are not keen on the pols tampering with the program.
That’s when the story ran into trouble. The Times reported: “On top of standard premiums of more than $141 a month, enrollees must pay a $1,132 deductible for every hospital stay.” That one threw me. I wasn’t sure what premium of $141 the reporter had in mind. Perhaps he didn’t quite understand how Medicare Part B works. Part B pays for physicians’ services, hospital outpatient care, and lab fees. This year the standard premium for Part B is $115.40 a month. Those with incomes above $85,000 ($170,00 for couples) pay higher premiums. Now Part D premiums, which pay for the drug benefit—vary depending on the plan a senior chooses from a private insurer. The premiums can be high or low; some plans don’t charge at all.
The story reported that seniors are also responsible for twenty percent of the bills for medical equipment, making it seem like that is the only coinsurance requirement in the program, and omitting the major one—physicians’ services. Virtually every beneficiary goes to the doctor during the year, and when they do, they are on the hook for twenty percent of what Medicare approves for payment, not necessarily twenty percent of the billed amout. There can be a big difference between what the doctor bills and Medicare approves. So most people buy supplemental insurance to protect them from these risks, and this is what the pols in Congress want to tamper with.
The reporter noted that some Medicare services such as lab work and home health care require no copayments and were “effectively free for beneficiaries.” They may be free at point of service, but they are not free. Beneficiaries pay for them through their Part B premiums and through their income taxes. Part B is partially funded by general tax revenues so everyone pays for them. That’s how social insurance works, a point not well understood. A little help from the paper would have been nice. And, for the record, while seniors may not pay for the lab service per se, they do pay twenty percent of the approved amount for the doctor visit. That twenty percent coinsurance again!
One point seemed to undermine the story’s main idea. It reported that House Republicans faced a “fierce backlash” when they embraced Wisconsin Rep. Paul Ryan’s plan for a Medicare voucher plan that would raise an average senior’s medical bill by $6,000 in 2022. Then readers learned that none of the proposals discussed would shift costs that dramatically. But didn’t the lede say that seniors’ bills could jump “hundreds or even thousands of dollars?”
Other points needed more context and amplification. A quote from Gail Wilensky, who ran the Medicare program during Bush I, sang the old “skin in the game” mantra arguing that paying more and making better choices would be therapeutic. Said Wilensky: “We will do better if people are more involved in making healthcare choices. There are few people who are more price sensitive than seniors.”
How many more choices do seniors on Medicare need? Most of them now have more than they can deal with; some have more than one hundred options to choose from. Dot-connection time here!
I am glad to see someone mention that there is a difference between the Medicare approved price and the billed price of a medical event.
I recently had a hip x ray and the medicare approved price was say $50 (did not look it up) and the billed price was say $900. If my supplement insurance does not knock down the price to the medicare approved price and then pay say a few dollars, I would have to pay say $180(ignoring other required payments like copay and doctor's visit)So the hospitals would get $130 extra, more or less,which they could use to offset Obamacare costs. Another great way to fleece Seniors to enrich the younger set of people.
#1 Posted by Joy Benemann, CJR on Tue 19 Jul 2011 at 10:58 AM
Not paying for health care for "seniors" = "fleecing"?
See how far the culture of governmental dependency has taken this country?
#2 Posted by padikiller, CJR on Tue 19 Jul 2011 at 02:38 PM
There are a couple of misleading statements above (not sure if they were in the original story or whether Ms. Lieberman is not taking her own advice):
-- The Part B premium in 2011 is $115.40 a month ONLY for people (mostly the first of the baby boomers) signing up this year; those previously on Part B pay around $96 a month unless they signed up in 2010 (in which case they pay around $110 a month). This is all related to the Social Security COLA but look it up if you want more detail
-- You wouldn't pay a $1132 deductible for every hospital "stay," just one where you had not been admitted for over 60 days (or 61 or 59; this gets tricky; get a lawyer if they try to charge you a second $1132
-- Oh by the way, the operative word is hospital "admission," not "stay." If you are observed for a week but never admitted that has dire implications particularly if they then want to send you to a skilled nursing facility
-- And the last two points related to Part A, not Part B
-- As for the 20% coinsurance for a doctor as it relates to Medicare rate approval, make sure you understand whether you are being seen by a Medicare-contracted, non-Medicare-contracted or non-Medicare doctor; they're supposed to tell you which they are up front but if you don't get this straight ahead of time you're going to need another lawyer
It is true that "most" people get supplemental insurance. In fact, 90% of people on Medicare get additional insurance from a former employer, the state government (primarily via Medicaid), a private insurer (so-called Medigap), or Medicare itself (Part C).
As someone that just signed up, the operative information about any story that relates to Medicare is that Medicare is terrible insurance vs. anything you've ever seen before you retired. It has the high deductibles mentioned, even more costly deductibles related to extended hospital and skilled nursing facility stays, lifetime limits that would make Wellpoint of California blush and is no good outside the U.S. (I don't just mean no good in London, UK--I mean no good in London ON
#3 Posted by Dennis Byron, CJR on Tue 19 Jul 2011 at 04:59 PM