A client called today to tell me about a letter she received from AHCCCS (Arizona Health Care Cost Containment System), which is Medicaid in Arizona.  Here’s what the letter, dated 12/22, says:

You receive help paying your Medicare Part B premium through the Qualified Individual-1 (QI-1) program. Although AHCCCS determines eligibility for this program, it is funded 100% by the Federal government.

Your QI-1 benefits will end December 31, 2011 because Congress has not authorized any additional funding for the program.

You will be responsible for paying your Medicare Part B premiums beginning January 1, 2012

What this means is that anyone with income over $1,089 for an individual (or $1,471 for a couple) must now pay their Medicare Part B premium, which is $99.90 per month in 2012. So people like my client, Shirley, will have $99.90 less in their Social Security checks starting in January.

Shirley falls into the income category called “QI-1″, which means she makes more than $1,089 but less than $1,246 each month. She has been getting help from the Medicare Savings Program which has paid her Part B premium.

I haven’t heard anything about these changes, so I am left to wonder:  Has our dysfunctional Congress decided to cut money for the QI-1 program from the budget? Was the continued funding of this program inadvertently left out of the budget?  Did someone determine that seniors living on $1,200 per month don’t need this help?

Because of her income, Shirley also gets help with her drug costs, and this will continue for 2012.  But things will change for 2013, as the AHCCCS letter goes on to say:

You will still be automatically eligible for Extra Help with your Medicare Part D Prescription Drug costs through December 31, 2012. However, to continue to receive this Extra Help in 2013, you will need to apply for Extra Help through the Social Security Administration at 1-800- 772-1213 or on line at: http://www.ssa.gov/

The AHCCCS letter also warned Shirley about one more problem that will come with the reduction of her benefits. The letter says:

IMPORTANT: While you will be responsible for your Medicare Part B premiums beginning January 2012, the premiums will not be deducted from your Social Security payments for a few months because it takes about two months for the Social Security Administration to update your records. However, the Social Security Administration will withhold the Medicare premiums for the
months beginning January 2012 from the Social Security payment you receive when the records are updated. You will need to plan for this reduction in your income for that month. If you have questions about your Medicare premium, please call the Social Security Administration at 1-800-772-1213.

According to a letter which AHCCCS sent to the Arizona congressional delegation in October, there are approximately 12,500 Arizonans who will be affected by these cuts.  I have a number of clients who will be losing this Medicare premium help, and this is going to be devastating for them. These folks need more help, not less.

Merry Christmas and happy new year from your millionaire congressmen and senators!

CLICK HERE FOR AN UPDATE ON THIS STORY.

A person who is covered by Medicare is known as a “Medicare beneficiary”.  I came across some interesting information about Medicare beneficiaries on the kff.org website.

According to the kff.org Medicare Fact Sheet, 2010 data show that:

Half of all people on Medicare have incomes below $22,000.

Half of all Medicare beneficiaries have less than $53,000 in savings.

25% or more have a cognitive/mental impairment.

21% of Medicare beneficiaries qualify for Medicaid. This means their income is less than $924 per month ($11,088 per year).

20% had a Medicare supplement policy in 2010.

25% were enrolled in Medicare Advantage [nationwide] in 2010. (In Pima and Maricopa counties in Arizona the number is 45%.)

2009 data:

11%  of Medicare beneficiaries had no supplemental coverage in 2009. This means they were not enrolled in Medicare Advantage or a Medigap plan and so were at risk of having large, never-ending medical bills.

Health expenses, including premiums, accounted for 15% of Medicare household budgets in 2009.  This is three times the share of health spending in non‐Medicare [younger] households.

This information is interesting to me because it raises questions about changes being discussed for Medicare, many of which involve putting more cost onto seniors.  Can most Medicare beneficiaries afford to pay more of their medical bills?  With so many low income and mentally impaired seniors, will a more complicated system make things even more difficult for them?

After spending a day in Dublin to recover from jet lag, I took a train up to Belfast, Northern Ireland to see a younger friend, Siobhan (pronounced “shavaun”) and her husband and two kids.  Northern Ireland is part of the United Kingdom (along with England, Scotland, and Wales) and has the National Health Service which covers all citizens, no matter what age they are.

The National Health Service provides medical care to all UK citizens, and people don’t get bills for services they receive.  None.  Nada.  According to Siobhan’s husband, Niall, who works for Invest Northern Ireland, everyone in Northern Ireland now gets their prescriptions covered 100%, which is quite a generous (and expensive) benefit.  Older people in Northern Ireland also get a free telephone line and help with their heating bills.

Siobhan works for AgeNI, which is a bit like the AARP in the United States. This organization advocates for older citizens, but it also contracts with the government to provide certain services for older people.

I met with the CEO of AgeNI, Anne O’Reilly, to ask her about how older people are cared for  in Norther Ireland. I learned that the ongoing recession is putting a lot of pressure on the government to look at ways to cut out some of the free services and pass on costs to citizens. It sounded a lot like the ongoing debate in the United States, and we talked about how our systems compare.  Ms O’Reilly said that some proposals would reduce government costs by creating private insurance that would cover some part of peoples’ medical costs.

Changes being discussed for the United Kingdom health care system sounded a lot like the American system – except that the UK will never move to for-profit health care like we have in the US. That would be expensive and politically unpopular. But it sounds like more costs might be put onto patients in the future because the government can’t afford the current all-inclusive system.

Ms. O’Reilly talked about the challenge of the growing population over 80 years of age because these folks require more medical care and more services.  She quoted figures for costs related to the older population in Northern Ireland: The average cost of care for people below 79 years old is about $5,300 per year. The average goes up to nearly $19,000 per person over 80. In the US, Medicare spends $9,000 per year per beneficiary, which is 70% more than UK costs for those under 79.

So the UK needs to move a bit towards the American system where people need to cough up more money for their medical care. But that means going from $0 to… some number that might be reasonable.  In the US, our political leaders are talking about going from an average of $6,000 per year cost to seniors to double or triple that number.

I know. I know. The UK system is socialist and terrible…. but it seems like it could be tweaked to save the government some money and not break the wallets of its senior citizens.  In the US, I wonder how much more our senior citizens (I mean, older people) can afford to pay out of pocket for their care.