The Hidden Costs of Obamacare for Seniors
By 2020, seniors will be paying more out of pocket for Medicare costs. The Patient Protection and Affordable Care Act (PPACA, also known as Obamacare), along with President’s latest budget proposal, increase costs across the board and reduces benefits within Medicare Advantage plans. Medicare “as we know it” is now a thing of the past, and the only way to preserve the Medicare benefit for current and future retirees is through long promised structural reform. While Obamacare tweaks Medicare’s payment systems, it retains the current structure and pushes more of the bloated costs to seniors.
The political rhetoric is deafening, especially in an election year, yet despite all the conflicting information, there are facts you need to know.
The 2012 Medicare trustees report states that between 2012 and 2017, seniors’ standard Medicare Part B monthly premiums will jump from $99.90 to $128.20, while their Part B deductibles will rise from $140 to $180. Seniors’ Medicare hospital deductible will increase from $1,156 to $1,336, while the daily hospital co-insurance will climb from $289 to $334.
For Medicare Parts B and D, the budget plan expands “means testing” for upper-income seniors, resulting over time in a total of 25 percent of all Medicare beneficiaries paying an income-adjusted premium.
The President''s budget would impose new fees on baby boomers beginning in 2017 with a $25 increase in the Part B deductible for new beneficiaries, a $75 total increase by 2021, plus a $100 co-payment for home health services in certain cases.
Additionally there will be a premium tax for new beneficiaries who choose a Medigap plan with first dollar coverage.
Reducing Access to Care
Savings are actually cuts from the Medicare program and are not reserved to enhance the solvency of the program. Instead, the “savings” are used to finance new spending for non-Medicare coverage expansions in Obamacare ,such as Medicaid. You cannot expand Medicaid and add subsides, all paid for in federal dollars, without that money coming from somewhere, and that somewhere is the Medicare program.
Congress has enacted major Medicare payment reductions that threaten senior''s access to care. Contrary to the promises of "keeping your Medicare benefits as you know them," these cuts are across-the-board changes in Medicare payment formulas for hospitals, nursing homes, home health agencies, hospice agencies and Medicare Advantage plans.
In fact, Obamacare mandates that $716 billion in Medicare payment reductions over the next 10 years. As these major reductions are implemented by Congress over the coming decade, seniors’ ability to access Medicare services will surely be compromised. In fact, lowering costs will lead to many providers to stop accepting Medicare patients.
Closing the Donut Hole or Opening a Can of Worms
The Obama Administration’s proposed new out-of-pocket costs will be coupled with a general increase in premiums for beneficiaries enrolled in Medicare Part D, the Medicare drug program. Obamacare designates an estimated $48 billion to reduce out-of-pocket costs for Medicare beneficiaries, particularly those who find themselves faced with a gap in coverage for their drug costs, commonly referred to as the “donut hole.”
The President’s policy is to close this Medicare Part D donut hole. Under the law, the donut hole is slated to close by 2020. But while out-of-pocket costs for Medicare Part D will be reduced, an increase in premiums for Part D beneficiaries of about 4 percent in 2011, rising to about 9 percent in 2019.”
When a Hospitalization is not a Hospitalization
Now that hospitals are being penalized more and more of their Medicare dollars for preventable readmissions, the increase in "observation status" has increased. The difference between being admitted versus being under observation status is now a costly problem for seniors and even more difficult to understand.
The layers of observation status started when they initiated diagnosis-related group (DRG) to determine hospital payments. For a specific diagnosis, the time and intensity of care was predetermined, and the hospital would be paid a set Medicare DRG amount. If you are admitted as an inpatient, your Medicare Part A benefit pays (less the deductible). If you are admitted under observation status, then it is billed to Medicare Part B (along with deductibles, copays and other out of pocket expenses.
f you are a Medicare patient in a hospital, make sure you know your status. Should you be observation, question the case manager whether there might be justification to make it inpatient. Discuss with your physician the need to minimize testing, and bring your own medications from