Can seniors afford to pay more of their health care costs?  Here is some interesting information from the National Committee to Preserve Social Security and Medicare:

Going forward, Medicare beneficiaries are projected to lay out as much as a quarter of their income on health care in 2020, up from around a sixth now. “Some have the impression that seniors are quite wealthy and could afford more premiums,” says Tricia Neuman, director of the Medicare Policy Project at the Kaiser Family Foundation. “The numbers tell a different story.”

Median income for women over 65 now stands at roughly $15,000. (This estimate is based on a Census Bureau report showing that, in 2008, the average woman over 65 lived on $14,500.) Half earn less. That $15,000 includes income from all sources: Social Security, wages, self-employment, pensions, government assistance, and investment income. As of 2010, the Current Population Survey shows that households headed by someone over 65 reported  $31,400 in joint income.

Even relatively affluent seniors are hardly rich. Singles over 65 who earn as little as $33,000 rank among the wealthiest 20 percent. At first glance, married couples appear to be doing better: to make it into that top quintile they must be earning at least $85,000 a year. But this is in large part because in many cases one spouse is under 65 and still working. In 2008, 41 percent of senior households reported earned income. But over time, as the working partner retires, older couples are forced to live on less.

The full article can be found here: http://www.ncpssm.org/entitledtoknow/?p=2010

Most seniors seniors enrolled in Medicare Advantage and Part D have already received mailings from their plans documenting how their coverage will change for 2012.  From what I have learned thus far, changes for plans in Arizona are not major, but costs for seniors will be higher in 2012.

Co-pays in many Medicare Advantage plans are going up by $5 for visits to specialists (as high as $45). Some plan co-pays for hospital stays will be over $300 per day (but just days 1-5).  Part D drug plan premiums are going up a few dollars.

Note to seniors:  Read the mail from you Medicare Advantage or Part D plan!!

Here is a press release from the Center for Medicare Advocacy:

Fall is the time for Medicare beneficiaries to explore their options regarding Part D prescription drug and Part C Medicare Advantage plans.  In years past, the annual enrollment period began in mid-November and lasted to the end of the year, with any changes or choices made effective January 1st.  Starting this year, that time period has been moved up.  This year the Annual Coordinated Election Period (ACEP) for Medicare Advantage and Medicare Part D prescription drug plans will start on October 15th and end on December 7th.[1]  This means that Medicare beneficiaries will have to analyze their options and make choices earlier than in previous years.

During the ACEP, often referred to as “open enrollment,” Medicare beneficiaries who do not have a Part D plan can enroll in one, and those who do have Part D coverage can change plans.  Beneficiaries can also return to traditional Medicare from a Medicare Advantage (MA) plan, enroll in an MA plan, or change MA plans.

Beneficiaries who are satisfied with their plan in 2011 still need to review their plan options for 2012.  Part D and MA plans may have made changes to their coverage, provider networks and other plan features.[2]   Starting October 1, 2011, plan information for 2012 will be available on the Medicare Plan Finder at www.medicare.gov.[3]  Medicare Advantage and Part D plan sponsors are allowed to start marketing their plans on October 1st.

It is likely that many beneficiaries will miss the new December 7th deadline for making any plan changes.  CMS says it is conducting outreach about the earlier deadline and that it will monitor the issue of beneficiaries who miss the deadline.  However, as of the date of this Alert, CMS has no public plans to allow a Special Enrollment Period (SEP) for individuals who miss the December 7th deadline.  Therefore it is critical that beneficiaries be informed of this change in dates.  In addition, those who miss the deadline should complain to CMS.

More from the press release:

The Medicare Advantage Disenrollment Period (MADP) from January 1st through February 14th:

During the MADP, a beneficiary can switch from an MA plan to traditional Medicare. The new MADP also provides an opportunity to pick up Part D drug coverage for those who do not already have it.

When disenrolling from an MA plan during the MADP, the effective date of disenrollment is the first day of the month following the date the disenrollment request is received. Thus, disenrollment requests received by MA organizations in January are effective February 1; those received February 1 through February 14 are effective March 1.[7]

During the MADP, an individual using the MADP to disenroll from an MA plan is eligible for a special enrollment period (SEP) to enroll in a stand-alone Part D prescription drug plan, regardless of whether the MA plan from which the individual disenrolled included the Part D drug benefit. The old OEP did not allow a beneficiary to add Part D coverage if he or she did not previously have such coverage at the beginning of the calendar year.

Beneficiaries are advised to enroll in a PDP as close to the time of disenrollment from the MA plan as possible in order to avoid having a gap in drug coverage.  For example, a beneficiary who disenrolls from an MA plan on January 31 and enrolls in a prescription drug plan (PDP) on February 1 would return to traditional Medicare on February 1, but would not have drug coverage until March 1.

Yesterday afternoon, I received and email/newsletter from a very large insurance company that linked to a press release titled “Industry Seeks Savings from Medicare Beneficiaries”.

Here are some excerpts from the press release and my reaction to them:

Seeking to fend off larger cuts in federal medical spending, executives from big pharmaceutical, hospital and insurance companies are crafting their own plan to reduce the deficit which calls for wringing Medicare savings from beneficiaries, not just from hospitals and drug makers. 

Members of the Healthcare Leadership Council—which includes top executives from Pfizer Inc., Aetna Inc. and the Mayo Clinic—are expected to approve a proposal that would call for raising Medicare’s eligibility age and shifting the program toward private plans for beneficiaries. My reaction:  I can’t print it here – The idea of raising the eligibility age really gets my blood boiling.

The group plans to press members of the congressional “supercommittee,” charged with finding $1.2 trillion in budget savings, to include the changes in its broader cost-cutting plan. My reaction:  So lobbyists will play a big role in influencing the closed-door meetings of the Supercommittee??   Who will be representing seniors, whose average income is around $30,000 per year??

The council’s proposal is part of a larger effort inside the health industry to overhaul how lawmakers achieve savings from federal health programs. For years, Congress largely has relied on slicing payments to doctors and hospitals that treat Medicare beneficiaries to shrink spending in the program that insures 48 million elderly and disabled Americans.  My reaction: American doctors make hundreds of thousands of dollars per year – poor them. For-profit hospitals make profits, even with the cuts they have faced over the years. Pharmaceutical company profits are huge.

Frustrated at being the target, the health industry is pushing back, arguing that some of those savings should come directly from the pockets of Medicare beneficiaries.  My reaction: Let’s compare the percentage of an average senior’s income spent on the health care costs to the profits of the companies represented by this Healthcare Leadership Council.

……The health-industry council estimates its plan would save $410 billion over a decade. The central plank is reworking Medicare so that, starting in 2018, beneficiaries could either shop for a federally subsidized private insurance plan in a new Medicare-only exchange, or stay in traditional Medicare. My reaction:There’s that Ryan Plan again… that would “end Medicare as we know it”…all so for-profit companies can make more money.

My Final Reaction: As I re-read this press release, it really seems like a joke or a prank. How can The Healthcare Leadership Council think their proposal would not be seen as garish and greedy?  And doesn’t it seem strange that they openly admit their highly-paid lobbyists will be all over the Supercommittee to stick it to seniors? Wow. This press release would be comical – if it weren’t serious.