A Daily Dose of Truth (#1): Medicare in Health Care Reform

~ by Rev. Linda Hanna Walling, Faithful Reform in Health Care

Daily Dose

Truth is witness to the whole.  One short sound-bite taken out of context — even if it’s a fact — does not necessarily represent the whole truth. We denounce the use of such sound-bites (from any party!) when they are intended to pervert truth for electoral gain. In the end, we acknowledge that a manipulation of facts to frighten and confuse vulnerable populations is just plain immoral.

When health care reform was passed in March 2010, our nation’s seniors became the beneficiaries of a strengthened, improved, and re-structured Medicare system.  A number of provisions will improve Medicare services for enrollees and extend Medicare’s solvency for another ten years.

Direct benefits of health care reform for  Medicare beneficiaries

  • Prescription drugs.  The prescription drug coverage gap (the “doughnut hole”) will be eliminated over ten years.  In 2010, the coverage gap will be reduced by $250 in the form of rebate checks that have already been sent to millions of beneficiaries who have reached the doughnut hole.  In 2011, program enrollees will receive a 50% discount off the price of brand name drugs during the coverage gap.  In ten years, the doughnut hole will be closed completely. Other provisions will expand assistance for some low-income beneficiaries enrolled in the Medicare drug program.
  • Preventive care.  For traditional Medicare beneficiaries, in 2011 co-pays and deductibles will be eliminated from most preventive services.  An annual comprehensive wellness visit and personalized prevention plan are added, which are not subject to coinsurance or deductibles.
  • Medicare Advantage plans. The private-for-profit Medicare Advantage plans will be prohibited from charging beneficiaries higher cost sharing for services than is allowed in traditional Medicare.  Plans that offer extra benefits will be required to give priority to wellness, preventive care services, and cost-sharing reductions over benefits not covered by traditional Medicare.
  • Physician incentives. Generous incentives are in the Affordable Care Act to increase the number of primary care physicians and to encourage primary care physicians to treat Medicare beneficiaries.
  • Low-income program. Outreach and enrollment assistance will be increased to beneficiaries eligible for the Part D low-income subsidy program.

$500 billion savings to the system

The $500 billion in cuts that are being denounced in attack ads are NOT cuts to benefits. They are cuts in waste, fraud, abuse, and government subsidies for private-for-profit insurance.  

  • Private-for-profit Medicare Advantage. Payments to private-for-profit Medicare Advantage plans will be restructured.  Excess payments will be rolled back, and performance bonuses will reward quality plans.  Part of the argument to privatize Medicare is that the private market can provide the same or more benefits at a lower cost than the federal government can do it.  Supporters believe that competition will keep the prices down and the quality up.  However, recent research is showing that the government is actually paying $1000+ more for Medicare enrollees in private plans than those in traditional Medicare.  Further, only 20% of Medicare beneficiaries are in the private plans subsidized by the government, but 100% of enrollees are paying for those subsidies!
  • Waste, fraud, abuse. Penalties will be enhanced on providers for waste, fraud, and abuse.
  • Hospital readmissions. Reimbursements to hospitals with excess preventable readmissions and hospital-acquired infections will be reduced.
  • Coordinated purchasing. Value-based purchasing for hospitals, ambulatory surgical centers, skilled nursing facilities, and home health agencies will be established.

THE TRUTH (with the “big T”):  Because of the 2010 reform of U.S. health care, Medicare is strengthened; beneficiaries will receive increased benefits; and costs will be controlled by cuts in waste, fraud, abuse, and government subsidies to private insurers.


For more information:

Faithful Reform in Health Care: What Health Care Reform Means for Medicare

Kaiser Family Foundation: Summary of Key Changes to Medicare in 2010 Health Reform Law (Issue Brief)

AARP:  What You Need to Know about the New Health Care Law (webinar)

HealthCare.Gov: Health Care Reform for Seniors (video & other info)

Medicare Rights Center: Health Reform and Medicare (Issue Briefs)

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