What terrible things has “Obamacare” delivered since the Affordable Care Act was passed in 2010?  According to the Center for Medicare Advocacy, here is how the healthcare reform law has affected Medicare:

• Closing the Medicare Drug Coverage Gap. 2011 is the first year of a multi-year phase out of the “donut hole”.  For 2011, beneficiaries pay only 50% of the cost of brand name drugs in the donut hole and 93% of the cost of generic drugs.
• Medicare Preventive Services. This provision requires Medicare to eliminate cost-sharing for Medicare-covered preventive services rated as A or B by the U.S. Preventive Services Task Force. It also waives the Medicare deductible for colorectal screening and authorizes coverage for an individualized prevention plan.
• Changes to Increased Medicare Premiums for Higher-Income Beneficiaries. Since 2007, Medicare beneficiaries with incomes above a certain level have been required to pay higher Part B premiums. The ACA froze the income level at which such premium surcharges apply at $85,000/year through 2019 and expanded the surcharge to also apply to Part D premiums.

• Medicare Extra Payments. For the years 2011 through 2015, Medicare will pay a 10 percent bonus for primary care services; it will also pay a 10 percent bonus to general surgeons practicing in areas with a shortage of health professionals.
• Medicare Advantage (MA) Payment Changes. Beginning in 2011, Medicare Advantage payments are restructured at an increasingly smaller percentage of original Medicare rates. Prior to the restructuring, MA payments were, on average, 13% higher than those for traditional Medicare. Also beginning in 2011, MA plans are prohibited from charging higher cost-sharing than original Medicare for skilled nursing facility care, chemotherapy and kidney dialysis.  In 2012, MA plans with four or five stars on a five star quality rating system are entitled to bonuses. The Centers for Medicare & Medicaid Services has expanded the bonus payment program to include plans with three stars. NOTE: This is good news for MA plans in Arizona!

• Medicare Independence at Home Demonstration. This provision creates a demonstration program to provide high-need Medicare beneficiaries with primary care services in their home.
• Medicare Value-Based Purchasing. Beginning October 1, 2012, Medicare will pay hospitals based on their performance on certain quality measures and will move toward making such payments applicable to skilled nursing facilities, home health agencies and ambulatory surgical centers.
• Reduced Medicare Payments for Hospital Readmissions. Beginning October 1, 2012, Medicare will reduce payments to hospitals for preventable readmissions within 30 days.
• Data Collection to Reduce Health Care Disparities. Effective March 23, 2012, the ACA requires the collection and reporting of certain data on race, ethnicity, sex, primary language, and disability status.

A client of mine sent me an email about a problem he ran into with his Part D coverage. The problem involves his prescription for Azacite, which comes in the form of eye drops. Eye drops, or any liquid medication that is measured by “drops”, can present problems because the actual number of doses can be difficult to calculate. Here is an email I received from Don last week.  He gave me permission to put it in my blog.

Here’s a recent experience of mine that I think your clients might benefit from. It’s necessarily a bit detailed, so please bear with me.

Yesterday, for the fourth time this year, I refilled my prescription at Walgreens for Azacite, an eye medicine. I was charged $85 for it. I knew that was way more than I’d paid previously, but you either pay or you don’t get your medicine. So I paid, went home and called UnitedHealthcare. They couldn’t explain why, even though each of the four purchases was for 2.5 ml of medicine, the copay jumped from $45 to $85. So they checked with the pharmacy and called me back. Here’s what happened:

Even though the label on the medicine indicates the quantity purchased as 2.5 ml, the insurance company makes the pharmacy compute how many drops are in a 2.5 ml bottle and then, based on the prescribed frequency of usage – eg., once a day — come up with the number of days the 2.5 ml should last.

If the computation shows 30 days or less, you pay the minimum copay (in this case, $45). If it computes to more than 30 days, then you must pay for an entire additional month’s copay (in this case, $85).

The record shows that on my first purchase, in Feb., they computed a 10-day supply; the next two purchases, they computed a 25-day supply, and on yesterday’s, a 37-day supply. That bumped me up to the two-copay level.

When I presented all these facts to Walgreens today, they refunded the difference between one-month  and two-month-supply copays. They could not explain how they came up with a ten-day supply, then a 25-day supply, then 37 when filling the exact same prescription.

I think the lessons for consumers of medicine are:

(1) Always save your pharmacy receipts.

(2) If it’s a liquid, make sure the pharmacy doesn’t give you more than a one-month (one copay) amount unless your doctor specified more than a month’s supply. (In the case of pills, the days-of-supply figure always given, but not for liquids, so you have to ask!.)

(3) If the price of a medicine you take regularly suddenly goes up, find out why. If the producer upped it, you have no recourse, but it might be the pharmacist’s mistake and you can get a refund.

(4) If the first person you speak to at your insurance company doesn’t give you a satisfactory explanation (as happened with me), hang up and call again so you can talk to a different person.

Has anybody else run into a similar problem?

The Medicare Part B monthly premium will be $99.90 in 2012. This will mean a small increase for the majority of Medicare beneficiaries who have been paying $96.40 since 2009. Those who began their Medicare coverage in 2010 or 2011 have been paying $110.50 or $115.40, so their Part B premium will go down.

For people receiving Social Security, the Part B premium is taken out of their monthly check.  Because there was no cost of living adjustment (COLA) in 2010 or 2011, the Part B premium was not raised for those already in the Medicare system.  Starting in January 2012, Social Security recipients will be getting 3.6% more in their check each month. That means $36 for a person receiving $1,000 per month.

PART B PREMIUM SHOULD BE $300.

The bad news for Medicare is that the Part B premium really should be much higher, because $99.90 times 47 million Medicare beneficiaries equals just  25% of the total money spent under Part B.  This means that 75% of Medicare Part B expenditures are paid through the federal government’s general fund.   And this is what politicians are fighting over as they seek to cut the federal budget. Republicans want to cut the amount of general revenue funds that go to Medicare – but how to do that without hurting seniors is the trillion dollar question.

PART A BUDGET IS MOSTLY BALANCED

Medicare Part A covers hospitalization, skilled nursing facility charges, home health care, and hospice. Payroll taxes go directly to the Part A TRUST fund, and tax revenues covered all Part A expenditures up until 2008. Since 2008, the trust fund has had to use some of its surplus saved up from previous years to balance the Part A budget.

PART B BUDGET IS NOT BALANCED

The Part B budget is way out of balance because Part B premium revenues cover only 25% of Part B expenditures.  Part B covers things such as doctor services, lab tests, diagnostic tests, physical therapy, chemotherapy and radiation therapy.

During the Bush Administration, Congress approved higher Part B premiums for Medicare beneficiaries earning more than $85,000 as an individual or $170.000 as a couple. Premiums are based on a sliding scale for income up to $214,000 for an individual and $428,000 for a couple. The highest Part B premium will be $319.70 in 2012.

About 5 percent of Medicare beneficiaries now pay a higher premium based on their income.  Under some budget-cutting plans, 25% of seniors would pay a higher Part B premium in the future.

TO SUMMARIZE: The Part B premium should be $319.70, but 95% of folks on Medicare are getting a 75% discount. This is what the fight over Medicare is all about. And, with baby boomers turning 65 at a rate of 10,000 per day, the number of people covered by Medicare is growing faster than ever before and will make the revenue to expense gap even wider.