Every year, doctors face cuts to their Medicare payments.  This week, Medicare fees are supposed to be cut by 21%, and doctors are once again threatening to refuse to treat Medicare beneficiaries.

Apparently, in 1997, Congress passed a law which said that if Medicare spending exceeds some complicated formula in a given year, Medicare fees to doctors must be trimmed the next year. Every year since, Medicare spending has grown enough to trigger the cuts to doctor fees. But every year, Congress has voted to ignore the law. Apparently, Congress never repealed the law because it allowed for some fuzzy accounting to make the Medicare budget look better.

Health Beat blogger, Maggie Mahar, who has covered health care for many years in Washington, DC, says the 21% cut is never going to happen. Never has.  Never will.
(See http://healthbeatblog.com)

Mahar also writes in her blog that health care reform opponents have propagated the myth that doctors will stop taking Medicare patients in the future. She writes that the health care reform law calls for more money for some doctors and less money for certain specialists and diagnostic tests.

As concerns Medicare:

The law calls for 10 % incentive payments for primary care physicians.

The law requires 5 % incentive payments for mental health services.

The law says that in 2010 and 2011, Medicare will make changes to its payment rates that will benefit physicians in rural and low cost areas.

In 2013 and 2014, Medicaid payments to primary care physicians will be raised to match Medicare rates. The federal government will provide 100% of the funding needed for states to meet this requirement. (Medicaid payments are generally 30% lower than Medicare rates.)

Specialists and expensive procedures and tests are a different story.

Mahar writes that from 2000 to 2006, Medicare spending on diagnostic imaging tests doubled from $7 billion to $14 billion. The health care reform law changes reimbursement for certain expensive tests that will allow Medicare to save $1.9 billion over ten years.

Doctors who have invested in imaging equipment and clinics will not be happy, but studies have apparently shown that the tests have not provided measurable benefits to patients.

Beginning in June, new “modernized” Medicare supplement plans will be sold, including two new plans, M and N.  In Arizona, insurance companies don’t seem interested in Plan M, but they are offering Plan N.  Plan N is an interesting development for seniors because it will have a monthly premium that will be 25-30% less than Plans C, F, and G.

Seniors who buy a Plan N Medicare supplement will pay $20 dollars (or 20%, whichever  is less) when they go to the doctor.  They will pay $50  for an emergency room visit. Medicare and their supplement will pay the rest of the doctor bill or emergency room bill.  Except for these co-pays, all other bills are covered by Medicare paying first and the supplement paying the balance of the bills, including hospitalization, physical therapy, lab tests, etc.  The only other out-of-pocket cost for the senior is the Medicare Part B deductible, which is $155 each year.

The modernized Medicare supplements, which begin in June, offer seniors more options for their Medicare coverage. But the real impact may be felt this fall when the Annual Election Period allows seniors to change their Medicare Advantage plans – or dis-enroll from a Medicare Advantage plan and go back to Medicare.  Plan N, with a monthly premium of $80 to $89 per month, might be attractive to seniors who are accustomed to paying $0 – $140 per month for their Advantage plan, but want better coverage through a Medicare supplement.

If/when Medicare Advantage plans raise their premiums and co-pays, seniors will move back to Medicare and Medicare supplements in droves.  Plan N will be an attractive, lower-cost Medicare supplement.

Here is a summary of changes coming to Medicare supplements after June 1, 2010:

1. Plans E, H, I and J will be eliminated.
2. Plan G will be modified. Home Care benefit will be removed and excess charges covered at 100%.
3. Lower cost Plans M and N will be offered. Co-pays for doctor and ER visits will be included in these new plans.
4. Companies offering Plan A must offer Plan C and Plan F.
5. A hospice benefit will be included in all new plans being introduced.

For more information, check out http://arizonamedicarenews.com

FOR MORE INFORMATION ON MEDICARE CHOICES IN ARIZONA, checkout my website.

Open Enrollment for Medicare Advantage plans has ended, and most people are locked into their plan for the rest of the year.  But there are exceptions for people with certain chronic illnesses or low income subsidies.

CareMore has Medicare Advantage plans for people with diabetes or breathing illnesses, and because these are “special needs plans”, people can enroll in them all year long.  In order to qualify for these plans, a doctor must sign a form confirming that the Medicare beneficiary has the chronic illness.

Evercare has Medicare Advantage plans for people with certain chronic illnesses such as heart disease, respiratory disease (such as asthma), high blood pressure, diabetes or dementia.

Low Income Subsidies: Medicare beneficiaries who are getting help with their Part B premium or Part D drug costs can change Medicare Advantage plans throughout the year.

People who have monthly income of  less than $1,354 (for a single person) or $1,821 (for a couple) can get help with their Part D premium and their prescription costs.  This help is received through an application to Social Security.

AHCCCS (Arizona Medicaid) will pay the Medicare Part B premium for a single person living on less than $1,218 per month, or a couple with monthly income of less than $1,639.  An application for this help is made to AHCCCS and usually requires a copy of the annual letter from Social Security that shows how much a person receives and what is deducted from that amount. The qualifying amount is the gross Social Security payment – before $96.40 (or $110.50) is taken out for the Medicare Part B premium.

If AHCCCS approves the application for “Medicare Cost Sharing”, they will notify Social Security that the individual or couple also qualifies for help with their Part D premium and drug costs.

FYI:  AHCCCS stands for Arizona Health Care Cost Containment System and is pronounced “access”.

So, while the vast majority of Medicare Advantage enrollees are “locked into” their plans, about 30% of seniors qualify for the low income subsidy, and many have chronic illnesses that would allow them to join a special needs plan.

FOR MORE INFORMATION ON MEDICARE CHOICES IN ARIZONA, check out my website.