The Centers for Medicare and Medicaid Services provide benefits to an estimated 100 million people, or about one in three Americans. Yet, the centers have not had a permanent chief executive since the fall of 2006.
President Obama intends to nominate Harvard professor and Massachusetts pediatrician Donald Berwick, who is known for his work to improve patient care, to oversee Medicare and Medicaid. Berwick heads a nonprofit organization for improving efficiency in health care. He is the president and CEO of the Institute for Healthcare Improvement, a nonprofit organization in Cambridge, Mass. The Institute works to eliminate needless deaths, suffering, waiting for help, and waste within health care systems around the world.
Berwick is also a professor of pediatrics and health care policy at Harvard Medical School, and a professor of health policy and management at the Harvard School of Public Health.
How Health Care Reform Impacts Medicare
The final health care reform bill did not include Medicare benefit cuts. It did not increase the share you pay for doctor office visits, hospital stays, prescription drugs, or any other medical treatment under Medicare.
The final bill phased out what’s called the doughnut hole. That’s a gap in Medicare coverage that leaves beneficiaries to pay full price for prescriptions and premiums. Medicare beneficiaries who fall into the coverage gap will receive a $250 rebate this year, and a 50-percent discount on brand-name drugs next year. The percentage that beneficiaries pay for prescriptions will decrease each year until the gap in coverage is eliminated.
After that, Medicare beneficiaries will pay about 25 percent for their prescriptions after they’ve paid a deductible until they reach catastrophic coverage. Then, they will pay only 5 percent, and will no longer have to pay full price for prescriptions except during the deductible period.
Health Care Reform Promotes Prevention
Parts of the reform legislation are designed to improve health care quality, and prevent the need for hospitalization by supporting preventive care. The bill eliminates co-pays and deductibles for preventive care, and provides coverage for annual check-ups.
Hospitals will also receive incentives to be sure people are ready to go home when released, and to prevent unnecessary readmissions. Doctors will be encouraged to coordinate the care that patients receive from different specialists to eliminate gaps in treatment.
Medicare Savings to Extend Medicare Benefits by Nearly a Decade
The health care reform bill had over $400 billion in Medicare savings over the next decade. Most of those savings result from reducing annual increases in payments to home health agencies, hospitals, and skilled nursing facilities. The annual increase would be reduced by a productivity factor to encourage providers to be more efficient.
A 1997 bill reduced Medicare spending by more than the current health care reform, but Congress has passed bills to moderate those 1997 cuts to Medicare. Congress could do the same for the current health care reform provisions. While the current reform has no pay cuts for doctors, previous legislation did pass with pay cuts for doctors that will take effect on April 1st of this year, and in the years to come.
Changes to Medicare Advantage Plans
Medicare now pays 14 percent more per enrollee to private Medicare Advantage plans than the same care would cost under original Medicare. The final health reform bill brought these payments more in line with original Medicare. Medicare Advantage plans still have to provide coverage that is as good or better than original Medicare, and Medicare Supplement Plans still cover gaps in the original Medicare.
The bill prevents Medicare Advantage plans from charging more than original Medicare for specific services. It also requires Medicare Advantage plans to spend at least 85 percent of taxpayer funds on medical services for members, instead of using that money for marketing or keeping it as profits. Members who see premium increases, or benefit reductions in their Medicare Advantage plans can change to another plan or original Medicare.
The Congressional Budget Office (CBO) estimates that the combination of Medicare savings, and increased revenues in the bill more than pay for coverage for the uninsured. As a result, the CBO says the bill will reduce the deficit over the first ten years as well as long-term to make Medicare available to seniors retiring in coming years.