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MEDICARE Final Draft

MEDICARE Final Draft

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Published by: jensen.omaha on Jul 27, 2008
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12/17/2009

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MEDICARENEA Resolution F-62 entitled
Medicare
states:
The National Education Association believes that Medicare is a contract between the United Statesgovernment and its citizens and that this commitment must not be breached.The Association also believes that initiatives should be undertaken to ensure the long-term solvency of the Medicare system and to guarantee a level of health benefits that provides and ensures high quality,affordable and comprehensive health care for all Medicare-eligible individuals (1999, 2007).
DEFINITION AND PURPOSE OF MEDICARE
Medicare, the nation's largest health insurance program, was created in 1965 as an amendment to theSocial Security program. It provides health insurance to persons age 65 and older, to qualifying personsunder age 65 with permanent disabilities, and to persons of any age suffering from permanent kidneyfailure.
WHAT IS THE ISSUE?
When Medicare was created, older Americans were facing a health care crisis. The Social Securitysystem was failing to protect them against the greatest single cause of economic dependency in old age:the high cost of medical care. In 1950 only 1 in 8 older Americans had health insurance and it was difficultto obtain private health insurance because insurers had long considered this population a "bad risk”.Since its implementation, Medicare has been successful in providing health insurance coverage togenerations of Americans who could not obtain it elsewhere, guaranteeing reliable access to mostmedically reasonable and necessary health care services. Medicare has proven that good governmentcan create a successful single-payer health plan for older and disabled Americans.Today, the Medicare program has become a target for ideologues who ignore Medicare’s successes andwho refuse to acknowledge the failure of private commercial and non-commercial health insurancecompanies to offer secure, easy to access health insurance for older Americans and those withpermanent disabilities.Today, rising health care costs affecting all Americans have prompted debate about how to guarantee thatMedicare will be available to future generations of Americans. NEA and its affiliates must lead in thisdebate.Many have attacked the fundamental structure of the Medicare program and have sought to underminethe guarantee of health coverage that the Medicare program provides. The Medicare Modernization Act(MMA), passed in 2003, brought some outpatient prescription drug coverage to Medicare beneficiaries,but it also brought for profit and non-profit private health insurers back into the “solution”.“A war against Medicare had been developing for years, with the goals of replacing it totally withprivate insurance and discrediting the social insurance concept. Enactment of the MedicareModernization Act of 2003 (MMA) was a victory for privatizers in the first major battle of that war.It virtually embodies a master plan for the war. The MMA undermines the health insuranceprogram that senior citizens and people with long-term disabilities have relied on for many years.It strips away protections that people with Medicare continue to need. Moreover, if [certain] MMA’sprovisions are allowed to remain in force, they will continue to erode traditional Medicare”
Reclaim and Strengthen Medicare: Undo the Damage to Health Care for All 
, Rekindling Reform,May 30, 2007.
 
WHY SHOULD NEA MEMBERS CARE?
Medicare is a benefit that helps to improve and maintain the quality of health for members and their families. Several hundred thousand NEA members currently receive Medicare benefits. Eventually allNEA members will need Medicare benefits. Without Medicare benefits, our members will not be able toobtain high quality, affordable and comprehensive health care. Rising medical costs and efforts toprivatize Medicare directly threaten the future of Medicare.
OVERVIEW OF THE MEDICARE PROGRAM 
Traditional Medicare is a highly successful and efficient single-payer federal health insurance program for America’s elderly and disabled. There are over 44 million Medicare beneficiaries as of January 2008 with37 million age 65 and older and 7 million under age 65 with permanent disabilities.Medicare is financed through payroll tax revenues, general revenue and premiums paid. Medicarebeneficiaries may purchase supplemental health insurance policies, commonly called Medigap policies,from private health insurance companies. These Medigap policies cover many medical co-payment costs.Non-traditional Medicare plans sponsored by private insurers are known as Medicare Advantage (MA)plans. MA plans fall into several different types, however all exist outside traditional Medicare and aresubsidized by the federal government over and above traditional Medicare payments. These subsidiesfavor private health insurance plans and their shareholders at the expense of traditional Medicare and asa result threaten the long-term viability of the Medicare trust fund. 
WHAT IS NEA DOING?
NEA supports federal legislation that would 1) Require Medicare Part D drug price negotiation by thefederal government and, 2) Reduce and eventually eliminate the excessive subsidy payments beingmade to Medicare Advantage plans. NEA is also reviewing proposals that would further means testcertain parts of Medicare
WHAT CAN NEA MEMBERS DO TO HELP?
Understand and keep up to date with Medicare issues.
Help NEA lobby Congress to 1) require that the federal government negotiate directly withpharmaceutical manufacturers the price of prescription drugs provided to Medicare beneficiaries and2) end unnecessary and expensive Medicare Advantage subsidies paid to private insurers
Support efforts to strengthen the Medicare Trust Fund
Urge members who have post-retirement health benefits under a pension plan, employer plan or other means to contact Social Security and Medicare for guidance on enrollment and benefits to bestmeet their individual needs..
OVERVIEW OF MEDICARE BENEFITS 
The scope of this paper does not allow a full explanation of Medicare benefits, however an overview ispresented below.
1.Medicare Part A Hospital Insurance
Pays a portion of the cost of inpatient acute care hospital, skilled nursing facility, hospice,home health, inpatient mental health services
Premiums for Medicare beneficiaries or through a spouse who have
o
At least 40 credits of Medicare-covered employment are free (a credit is defined to be
 
one-forth of a year of creditable work)
o
Between 30-39 credits, Part A premium will be $233 a month in 2008
o
< 30 credits, Part A can be purchased by paying $423 a month in 2008
Part A Inpatient Hospital Cost Sharing for 2008:
o
Inpatient Hospital Deductible: $1,024
o
Daily coinsurance for days 61-90 is $256
o
$512 daily coinsurance for 60 lifetime reserve days
2.Medicare Part B Medical Insurance
Covers physician and other medical practitioner services, most outpatient hospital services,home health care, durable medical equipment, and, other services
Part B Cost Sharing for 2008:
o
Annual Deductible $135
o
80% of medical costs paid by Medicare
o
Monthly premiums depend upon the recipients income (see PART B Means Testingsection below)
o
Income > $82,000 single and $164,000 couple pays more.
3.
Medicare Part D Voluntary Outpatient Prescription Drug Plan
Benefit started in 2006
Stand alone plans available through private companies
Pays a portion of the cost of outpatient prescription drugs
Portion of the cost paid by the recipient depends upon the plan chosen
4.Medicare Part C, Medicare Advantage (MA) run by private health insurers
NEA members in some states are covered by a statewide Medicare Advantage plan.
Provide Part A and Part B
Must cover all medically necessary services that traditional Medicare covers
Can charge different co-payment, coinsurance, and deductible amounts than traditionalMedicare
80% of beneficiaries are in traditional Medicare and 20% are in Medicare Advantage plans.Federal government pays private plan monthly amount for beneficiaries’ care
MA plans are not supplemental insurance
Sometimes offer extra benefits like vision, hearing, dental and wellness
Most cover outpatient prescription drugs and most charge extra for it
Private Fee-For-Service Medicare Advantage
o
PFFS MA plans
o
Expanded tremendously nationwide since 2003
o
May offer more benefits than traditional Medicare
o
Most do not limit access to certain physicians or require referrals to see specialists asin HMOs
Raise questions about long-term direction of Medicare since more expensive than traditionalMedicare but not held to higher quality and efficiency standards
Continue to be marred by aggressive and improper sales tactics of plans, brokers, consultants
Estimated average windfall payments for all MA plans are 12%
For fast growing private FFS plans, average windfall payments are 19%
CBO: Excess payment over 5 years (2009 through 2013) $54 billion
CBO: Excess payment over 10 years (2009 through 2018) $149.1 billion
Do Windfall Payments = Extra Benefits? Although some portion of the subsidies enhancesbenefits much of the subsidy only increases the health insurers profits.
Little oversight by federal government

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