Happy New Year!  I read the bill the U.S. Senate passed on New Year’s eve, and it includes an extension of funding for the QI-1  program. The QI-1 program pays the Medicare Part B premium for people with monthly income below $1,277 (individual) or $1,723 (a married couple). (See more details at the bottom of this page.)

Anyone in Arizona who received a letter from AHCCCS saying they will have to pay the $104.90 Part B premium can breathe a sigh of relief…. and wait to see what the Republicans in the House of Representatives do with this bill.

We must wait and see if the House of Representatives will approve the bill which covers a very long list, including: the extension of unemployment benefits; extension of a long list of  individual tax deductions; extension of a long list of  business tax deductions;  continuation of tax credits for energy efficient homes, and tax credits for alternative energy production.

UPDATE 1/2/2013: The House of Representatives passed the bill, so QI-1 is approved for 2013.

Other Medicare-related issues included in the bill that interested me are:

Medicare physician payment update (Sec. 601):  Puts off the 27% cut to doctor fees. This has happened every year since 1997, which is why the “required” cut to doctor fees is 27% this year. It will be bigger next year – but these cuts will never be imposed because doctors would stop accepting Medicare patients.  Apparently this has something to do with making the Medicare budget forecast look better than it really is.

Extension of specialized Medicare Advantage plans for special needs individuals (Sec. 607): Extends chronic illness plans through 2014.  This is a pilot program that was supposed to end in December 2013.  The Medicare Payment Advisory Committee (MEDPAC) had advised against continuing funding for these plans.

Special needs Advantage plans get higher payments from Medicare than do standard plans. Chronic illness Advantage plans offer lower out-of-pocket costs for people with Diabetes, various heart conditions, and breathing illnesses such as COPD. People can enroll in these plans any time throughout the year if their health problems meet the chronic illness criteria.

Extension of funding outreach and assistance for low-income programs (Sec. 610):  Continues funding for Area Agencies on Aging that provide help to low-income seniors. The Pima Council on aging gets this funding to support their work.

*****Explanation of income levels and help they receive:*****

The QI-1 program is funded each year, and each state gets a certain amount of money. The state can run out of funds for this program at the end of the year, so people who apply for this help in November or December might be turned down. They should apply again in January when funding has been replenished.

The QI-1 program helps people whose income is below $1,277 (individual) or $1,723 (a married couple), but above $1,117 (individual) or $1,513 (couple).

SLMBs (Specified Low-Income Beneficiaries) are people with income between $931 and $1,117 (individual) and $1,513 (couple). The state must pay their Medicare Part B premium and there are no funding issues like those that come with the QI-1 program. $20 can be added to these figures when determining if a person qualifies for this help.

QMBs (Qualified Medicare Beneficiaries) have income blow $931 (individual) and $1,261 (couple). $20 can be added to these figures when determining if a person qualifies for this help. QMBs get help with their Part B premium and all the medical co-pays that come with Medicare.  In Arizona, QMBs are assigned an HMO health plan and they must use doctors in the plan’s network in order to get co-pays covered by AHCCCS (Arizona medicaid).

Assets: The state of Arizona, when considering an application for help through the Medicare Savings Program (QI-1, SLMB, and QMB), does not consider assets. Arizona only looks at income, so a person can have money in the bank, two houses, or multiple cars and still qualify for this help.

Medicare does not require seniors to pay enough of their health care costs. Seniors go to the doctor too much.  Medicare supplement insurance makes these problems worse and contributes to out-of-control Medicare spending. These are the conclusions in a recent opinion piece in the Wall Street Journal titled, “Why Medicare Patients See the Doctor Too Much”.

The authors also say the “Obamacare” changes to Medicare, which provide more free preventive care services to seniors, are bad because  they “further insulate seniors from costs and will drive up spending even more”.

According to the authors:

Medicare utilization is roughly 50% higher than private health-insurance utilization, even after adjusting for age and medical conditions. In other words, given two patients with similar health-care needs — one a Medicare beneficiary over age 65, the other an individual under 65 who has private health insurance — the senior will use nearly 50% more care.

In the opinion of the authors, the answer to Medicare’s problems is:

Since private health insurers are much better at controlling utilization and reducing fraud, why not turn to the private sector to resolve Medicare‘s excessive utilization? That’s what House Budget Committee Chairman Paul Ryan was trying to do with his premium-support model that would eventually shift Medicare beneficiaries into private health plans.

The authors favor more choice for seniors, such as high-deductible health insurance options and plans that are more like those in the under-65 market. But the authors don’t mention that these high-deductible plans are designed for young, healthy people who are betting they won’t get sick and have to pay that $3,000 or $5,000 deductible before their insurance kicks in. That’s probably a good bet for a 30-year old. But what about a 70-year old?

What are the chances a 70-year old will need to spend several thousand dollars on medical services each year? And what are the chances a senior will put off care because he has to pay 100% of the cost until he meets his deductible? Is it a good idea for seniors to put off care because they can’t afford it – or are too cheap to pay co-pays and deductibles? Is this a choice we want seniors to make? And is this good public health policy, or will it lead to sicker seniors and bigger medical bills for seniors and Medicare?

Note:  I would have linked to the Wall Street Journal article, but the article is not accessible for free.