Medicare — our now and our future

Picking up from last time, let’s focus on what’s happening to Medicare, because that affects all of us so much. Guru pronouncements abound, even contradicting each other. We can try to summarize and interpret them.

Earlier this year, AP’s Ricardo Alonso-Zaldivar nicely explained: “Medicare in 2016 is undergoing some of the biggest changes in its 50 years. Grandma’s Medicare usually just paid bills as they came in. Today, the nation’s flagship health care program is seeking better ways to balance cost, quality, and access.”

“So far, the 2016 change getting the most attention is that Medicare will pay clinicians to counsel patients about options for care at the end of life.” As a result, we’re seeing significant family cost savings, as physicians increasingly recognize palliative care as preferential to continued ineffective curative treatment, and at-home, residence institution, and hospice care as preferable to hospitalization.

Continuing: “But the experts also are paying attention to Medicare’s attempts to re-make the way that medical care is delivered to patients, by fostering teamwork among clinicians, emphasizing timely preventive services, and paying close attention to patients’ transitions between hospital and home. About 20 percent of patients in traditional Medicare now are in ‘Accountable Care Organizations’, recently-introduced consolidated networks of doctors and hospitals that strive to deliver better quality care at lower cost.”

We’ve mentioned Medicare’s system-wide change in benefits emphasis from “fee-for-visits” to “reward-for-streamlined-curing.” Alonso-Zaldivar says “Joint replacements are the most common surgical procedure for Medicare beneficiaries. Experimentally, this year many hospitals have become responsible for managing the total cost, and have a ninety-day window from initial doctor’s visit through surgery and rehabilitation.” This idea is the pioneering essence both of the trend toward streamlining treatment plans to make them better and less expensive, and the results-stimulating effect of bundled flat-rate “That’s all you get!” fees.

“This year an experimental group of hospices are implementing Medicare’s new ‘Care Choices’ model, so that terminal patients now can receive hospice services without sacrificing their miracle-hopeful curative treatment. A cancer patient could continue to get chemo, for example”. Welcomed, of course, and we expect favorable cost results.

Our local Medicare lecturer-consultant-alternative-plans-advisors tell us that the preventive services effort begun in 2010 is thriving this year. They expect far fewer disease-caused hospitalizations because of the fully Medicare-covered preventive screenings for eight major disease types (breast, prostate, bone, cardiovascular, cervical/vaginal, colorectal), diabetes management, Hepatitis B and pneumococcal shots, tobacco use cessation counseling, and annual wellness visits. For all the facts, they recommend browsing www.medicare.gov. The gurus say that utilization is bound to reduce chances of disease and prolonged illness. Prevention is the key! So, the preventive services coverage now seems very successful, and also is becoming a cost-reducer.

About other long-term cost reducers, they also note that the new results-oriented benefits emphasis now governs the entire system, including “alternative” plans. There’s an awful lot going on behind the scenes, that we don’t hear about. For example, the Centers for Medicare and Medicaid Services is circulating an ambitious set of hospital allowances rule changes that require improvements in stay durations, re-admissions, wait-time for services, and coordination, and other performance criteria. “I’m hopeful and have faith that all the changes are positive and result in present as well as future cost reductions for recipients”, exclaims one comment.

What’s happening to your benefits coverage and your premiums? Details are on the website, of course, but summarizing from various recent commentaries:

Our employment earnings still are taxed at last year’s rates, except a bit higher for participants who pay a little for Part A (hospital) coverage because of insufficient Social Security credits.

Part B (medical) continues to suffer annual cost increases, perhaps slightly slowed this year by the new cost-controls. Of course, its annual premium increases endure for the 69 percent of participants in the “traditional” (Government) plan. This year, most of us got lucky -- because of the inflation rate, Social Security COLA “hold harmless” ceiling, and a congressional political budget deal, the Part B premium increase is merely16 percent, even though cost analyses are justifying -- Get this -- 50 percent and more!

But, do we get more because we pay more? You kiddin’? The deductible rose $ 19.00, to $ 166.00.

For Part A, impacted by the same cost scenario of course, the hospital deductible now is $ 1,288.00, up $ 28.00; and the after-60-day daily co-pay climbed $ 7.00, to $ 322.00. Skilled nursing home care will cost you $ 3.50 more daily after the first 20 days, $ 161.00.

You’ll ask me: “So, should I switch to a Medicare Advantage plan, joining the other 31 percent, or add a Medicare Supplement plan?” I’ll refer you to OLLI-presenter Terri Stephens. She says you possibly should, but only after thorough analysis of all the dynamics, including the ever-changing restrictive eligibility rules and open enrollment periods, out-of-area service limits, competitive differences among the many plans, and insurers’ reliability. The plans are commercial insurance, therefore subject to change, but within limits. Average premiums actually dropped a little from last year, but out-of-pocket maximums rose 3.6 percent to $ 5,223.00. Big-time changes are forecast for the next several years.

Then there’s prescription drugs Part D: Oy vay! (Yiddish, not Pennsylvania Dutch). 2016 is only the beginning of dramatic cost and premium increases and benefits changes. We’ve explored the reasons recently. Fortunately, the “Medicare Part D Standard Benefit Plan” sets the allowable limits. “Medicare Health Plans” reports:

Initial deductible: Up $ 40.00 to $ 360.00

Initial coverage limit: Up $ 350.00 to $ 3,310.00

Out-of-pocket threshhold: Up $ 150.00 to $ 4,850.00.

Nominal costs under catastrophic coverage: Up variously.

Base premium: Up $ 0.97, to $ 34.10

Number of available plans: Down 115, to 886.

Now, in light of all this wisdom, a Sun News-carried AP mid-year report gives us cardiac arrest, declaring that the Medicare trust funds can be broke in only twelve years. Then it resuscitates us, explaining that this is only because of lower-than-expected payroll tax revenue and Congress’s procrastination about increasing the funding. It’s an election year. Next year isn’t -- Expect the essential sharp catch-up premium and tax revenue then.

Health care costs certainly will continue to rise for a long time, although some at a slower rate because of the innovations. The AP report says that next year the participants who aren’t protected by the “hold harmless” safeguard, mainly new enrollees and higher-income earners, will have to pay sharply higher Part B premiums, about $ 149.00. It will climb even higher if hospitals and nursing homes stop taking Medicare patients because of the inadequate allowances, forcing Congress to increase them.

Agree with our take on last year’s predictions? Yes, new, improved care delivery methods are beginning. But the zooming cost future also is now. Cost controls haven’t overcome the upward pressure, but are gaining effectiveness. Eventually we’ll all have to pay dearly for the “kick-the-can-down-the-road” shortfall funding; the sooner the less costly.

Maybe Dr. Jill Stein, the Green Party’s presidential candidate, has the best idea: Disease, and therefore its cost, will be reduced by maybe 50 percent just by cleaning up the environment — Ultimate net cost: Zero!

This story was originally published September 7, 2016 at 5:15 PM with the headline "Medicare — our now and our future."