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How do We Pay for Medicare Part A (HI) Hospital Insurance
Part B (SMI)
Part C (HMO’s)—Paid for by money collected in Part B HMOs will get 10.7 increase in 2004 above what fee-for-service will get and above what the balanced budget will allow. Part D The New Drug Plan—Private Insurance In 2003 Part A—Took In—$179.8 billion and Expenses were $156.1 billion. Gain of 26.7 billion. Part B—Took In—$115.6 billion and Expenses were $123 Billion. Loss of $7.4 billion. Surpluses (after 2003) Part A----$258.5 billion Part B----$26.9 billion Social Security----$1.23 Trillion
Medicare Part A—Primarily 1.45% payroll tax for employees and 1.45% to employer for each employee. 2.9% for self-employed. Also financed by interest on the "Medicare surplus", buy-ins, and tax on Social Security benefits. Part B—Is financed by beneficiary premiums (25%) ($66.50 in 2004) and general tax revenues (75%). Part C—Managed Care Plans that provide Part A and Part B benefits to enrollees. Named Changed to Medicare Advantage. Part D—Refers to new prescription drug benefit. This is private insurance and is subsidized by the government. The Congressional Budget Office estimates the average monthly Part D premium will be $35 in 2006, although premiums are expected to vary across plans. Medicare Advantage (vast majority are HMOs) now has:
There is now a cap on Medicare, which there never was before. If that cap is reached premiums will go up or coverage will go down. Private Plans or Medicare Advantage will receive a subsidy from the government to keep their premiums low and discourage enrollment in traditional Medicare, causing premiums for traditional Medicare to sky-rocket because of the cap. Hence-forth the privatizing of Medicare. Spending on Medicare benefits will be about $300 billion in 2004 and Medicaid about $300 billion. Prescription Drugs: Nearly one third (31%) of Medicare Advantage enrollees are in plans that do not provide drug coverage (up from 16% in 1999) during this same time period, average annual out-of-pocket drug costs for enrollees rose from $234 to $512. 19% of enrollees had a annual cap of $750 or less and 28% were in plans that covered only generic drugs. Is Medicare in Trouble YES!
Don’t be Fooled Today By Anybody That Praises the New Prescription Drug Bill Medicare Prescription Drug, Improvement, and Modernization Act of 2003 The cost of this bill will be totally out of line, especially if prescription drugs prices keep going up at six times the inflation rate. Will the cost be $400 billion over ten years or will it be $1.8 trillion over ten years? What about the new cap on Medicare? Will seniors be forced into private plans? Will traditional Medicare premiums sky-rocket? What about the out-of-pocket donut-hole will it climb at six times the inflation rate? Will it go up about $300 to $400 a year? What’s really behind "Modernization"? Original Medicare was simple (easy to understand and use), "Modernized" Medicare deviates radically from these principles. Instead of simple, effective, and cheap, we find ourselves saddled with benefits that are confusing, far from comprehensive and expensive. The architects of Medicare modernization do not believe that governments should bargain effectively with health care industries on behalf of the entire population for better health care at lower cost. Consequently, the costs are high and the benefits are meager. The real winners from this legislation are the drug industry and the managed care companies, not patients and their families. Will the new bill cause many retirees to lose their coverage? Will 13 million seniors see a hike in drug costs? How many seniors will lose their company retirement health benefits? It’s a very bad bill! Many people are unsure whether their employer-provided benefits will continue after 2006. Yes, we are talking about the new prescription drug bill that also puts a cap on Medicare so the Bush Administration, if re-elected in 2004, can support raising Medicare premiums, and lowering coverage. By subsidizing private insurance companies to offer lower premiums and offer better coverage, Medicare beneficiaries will be forced into private coverage and this will lead to the privatizing of our cost efficient Medicare. The same thing is going to happen with the new prescription drug plan, and you can be sure that a lot of employer provided benefits will be discontinued or their premiums will rise sharply, because the government will have no way to bargain for lower prescription drug costs. Also the new drug bill has a large donut hole where out-of-pocket costs will rise. The discontinuing of employer benefits and rising cost to retirees is already starting to happen, because of run-a-way medical cost that only a sound Medicare system could control. The new drug bill is surely a boon to private insurance, and prescription drug companies because it prohibits the government from using its buying power to lower drug prices. "How do we get this bill repealed?" Says an ever increasing number of seniors as they learn what this bill is all about. A good start would be to vote this administration out of office and those who misrepresent us in congress as well. We are very fortunate in Ithaca to have representatives in congress that voted against the new prescription drug bill. They are US Representative Maurice Hinchey, and US Senators Schumer, and Clinton. Seniors in Ithaca also have great support from State Representative Barbara Lifton and our new Mayor Carolyn Peterson. Together with the many activist groups in Ithaca we have a great opportunity to fight for what is right and just. In Interviews and at public and private meetings, senior citizens have expressed unhappiness with Bush, Congress, and the AARP, the nation’s largest organization representing older Americans, which had backed the administration’s Medicare legislation. The Alliance for Retired Americans provides better support and direction for Seniors. Yes! It’s a very bad bill. I guess the goal for the present administration is to rape the country and then move on. Nobody could expect this madness to go on for ever. When the Vote was Held Open When the vote on the Medicare bill was called at 3:00 a.m., after 15 minutes, the bill was losing. The Speaker of the House asserted his prerogative of "holding the vote open"—for an unheard of time 2 hours and fifty minutes! During that time, Secretary of Health and human Services Tommy Thompson came on the floor of the house to lobby—another unprecedented move—and the President made early morning calls to members on the floor. As a result of all of this pressure, a number of members switched their votes, and the bill passed 220-215. For years the pharmaceutical industry, represented by PhRMA (the Pharmaceutical Research and Manufacturers of America) vehemently opposed the creation of a prescription drug benefit within the Medicare system. But not this time, the drug lobby decided to shift positions for two big reasons, to avoid criticism, and to work with the government to avoid the federal government stepping in and establishing price controls or negotiating drug prices. The industry saw its best opportunity to work with a friendly administration that also wanted to hand the President a win. They got their way, along with a drug plan that would ensure the plan would be provided by private plans, figuring that such plans wouldn’t be able to moderate drug prices as effectively as the federal government. New benefit, prescription drug sales could increase by as much as $13 billion a year. Private firms that provide health coverage could receive up to $12 billion in subsidies beginning in 2007.
Misleading Seniors President Bush has done a lot of favors for those who have given him money, but few have benefited so handsomely from their financial ties to him as the drug industry and CEOs." While the president said he wants to give "older Americans better choices and more control over their health care", He is actually refusing to let seniors purchase lower-priced, FDA-approved medicines from Canada. While a recent poll shows that two-thirds of Americans support giving seniors this right and while governors from both parties support the idea, drug companies like Pfizer universally opposed the idea because it would cut into the billions of dollars in profits.
The Medicare Prescription Drug, Improvement and Modernization Act of 2003 Creates a new drug benefit as Part D of Medicare Beneficiaries can remain in the traditional FFS program enrolling separately in private prescription drug plans (PDPs) or they can enroll in integrated Medicare Advantage (MA) plans for all Medicare-covered benefits, including drugs. Beneficiaries who are eligible for full Medicaid benefits will begin to receive drug benefits under Medicare rather than Medicaid in 2006. Low Income beneficiaries Below the poverty level and below threshold: No premiums and no deductibles--co-pays from $1-$3 above the threshold Above the poverty level but under 135 percent: $2-$5 co-pays above the threshold--asset test $6000/single and $9000 couple—subsidies to cover average premium--no deductible. Below 150 percent and above 135 percent of poverty level: Assets $10,000 single $20,000 couple—will receive premium subsidies on sliding scale—will pay deductible of $50—15 percent coinsurance up to the out-of-pocket threshold--$2-$5 co-pays above the threshold. An estimated 1.8 million beneficiaries who meet the income test will not qualify for assistance as a result of the asset test (Congressional Budget Office) Medicaid a source of supplemental coverage for 12% of non-institutional beneficiaries in 2001, will no longer offer drug coverage to dual eligibles; instead, they will have to enroll in Part D for their drug benefits. State will have to cover any other cost sharing they provide. States will have to pay a share of what they would have had to pay for dual eligibles.
How The New Prescription Drug Plan Works Prescription drug coverage will come from private insurance, and not from Medicare. Medicare part A and part B is public insurance through taxes, and costs for part B are paid for in part by premiums to Medicare beneficiaries. Private insurance will collect the premiums for the drug coverage, and will also get subsidies from the government to offer lower premiums. 1. Starting in 2006 Members of Medicare: will pay a premium of$35 a month or $420 a year, if their income is above 150 percent of the poverty level. 2. Pay a deductible of $250 per year if Members have any drug costs. 3. Member will pay 25 percent of the first $2000 and the insurance will pay the remaining 75 percent. 4. After the first $2250 there will be a donut (a gap in coverage) until the beneficiary pays a total of $3600 out of pocket. If the beneficiary spends $5,100 on drugs in one year his out-of pocket will be:
$ 250 for deductible $ 250 $ 420 for premium (pay for yearly no matter what.
$ 500 25% of first $2,000 $ 500 $ 2850 until beneficiary spends $3600 $ 2,850 $4020 total out-of-pocket $ 3,600
The Solution to Medicare’s Problems We have the problem of the Baby Boomers and the smaller amount of the work-force paying into the system within the next generation after the BB. We have a problem with rising health care costs far greater than wage increases. But we also have a problem that "Medicare" does not cover what it should. Medicare by itself cannot stand alone and cover all of necessary care. Part A does not cover all of inpatient care, and Part B covers only eligible physician services, outpatient hospital services, durable medical equipment, and certain home health services. It does not cover long term care. Prescription drugs are another problem (Poor coverage, rising drug prices, etc). The Solution for "Medicare" would be to put the majority of our population under one risk pool, or "Medicare for All" that would cover all necessary care including: Dental and Eye Care, Prescription Drugs, Preventive Care, Community Services, Home Care, and Long-Term Care. Under a National Health Care Plan or Public Insurance for everybody much would be saved from high administrative costs, marketing costs, duplication of services, and fraud. By eliminating the middle-man there would be more money to cover all necessary care, and cure our Medicare and Medicaid problems. Seniors especially would be more secure with their health care system. No longer would we need all these different health care systems: 1. The Veterans Administration's health care system 2. Health Care for those presently serving in the Military 3. Health Care coverage for Public Employees 4. Health Care under Workman's Compensation 5. Medicare (as it is today) and Medicaid 6. Separate Community Health Services 7. Private Insurance for Essential Health Care I know that there are some people who believe a National Health Care Plan is not the answer, but remember most of all the other industrialized countries had a system like ours, and it failed them miserably. They are not in a health care crisis, We are! Are there problems with some single-payer systems, Yes! But they are getting better. Canada has made vast improvements. The sooner we deal with the Medical Industrial Complex the better. Social Security Where would this country be without Social Security. Since Social Security was enacted in the 1930s millions of people have been lifted from living in poverty. Social Security has made it possible for many seniors to live more comfortably. Social Security has been great for the economy, and has played a big role in reducing the deficit. The problems with Social Security are not as complicated as with Medicare, because we do not have to worry about increased cost in medical care that is rising 4-5 times faster then wages. Demographics alone aren’t to blame for the trust fund gap. Social Security taxes were raised and benefits shaved in 1983 to pay for the future boomer wave. What haven’t been covered is the higher lifetime incomes we’re getting from Social Security as a result of retiring earlier and living so long. Another thing to worry about is the shrinking work force compared with the number of people on Social Security. Social Security’s supporters can’t just lie back in their chairs and say it will all work out, there are those with longer life spans to pay for. Two important books written by four of the nation’s leading Social Security experts—Countdown to Reform: The Great Social Security Debate by Henry Aaron and Robert Reischauer, and Saving Social Security: A Balanced Approach by Peter Diamond and Peter Orszag—have shown, using the Trustees’ projections, that long-term Social Security solvency can be restored by modest benefit and payroll tax changes that are phased in over a number of years. These books, as well a proposals developed by other experts, have shown that radical changes in Social Security’s structure—including the replacement of part of Social Security with private accounts that carry greater risk for individual beneficiaries—are not necessary to restore long-term solvency. If the 2001 and 2003 tax cuts are made permanent as the Administration has proposed, their cost over the next 75 years will be more than five times the Social Security shortfall over this period, as projected by the CBO. In fact, the cost over the next 75 years of the tax cuts just for the one percent of households with the highest incomes—a group with average incomes of about $1 million per year—exceeds the entire 75-year Social Security shortfall that CBO projects. Last year the program’s 75 year shortfall came to $3.8 trillion. President Bush’s tax cuts equal $9 to $12 trillion. Making guesses about the long term seems nuts. It’s only done because, by law, Social Security’s books have to balance (on paper) over 75 years. The thought that Social Security is basically sound may come as a shock, because for years all you heard are scaremongers warning of " looming insolvency". But this is just propaganda, spread to encourage investment of Social Security in the stock market. [Payroll Tax Rate: 6.20% for both employer and employee] [ Max FICA/yr $5,449.80] [Maximum taxable Earning Base $87,900]
Take Back America Start With a Single Payer Health Care System. There are 2.2 million fewer jobs in the United States than when Bush became President and 3 million fewer manufacturing jobs. If there is any job growth now it is primarily in the low-paying service sector where health care coverage is sparse. The Bush Record On Health and Medicare: Health care spending soared by over 10 percent last year, the fastest increase since 1991. Families are paying more for shrinking coverage, while businesses and government are burdened with high health care costs. There are 44 million Americans who do not have any health coverage, four million more than when Bush became President. What is the President doing about the high cost of health care? Bush's Medicare prescription drug bill rewarded the big drug companies with a $139 billion windfall profit and prohibited Medicare from using its purchasing power to lower drug prices. The bill will result in 3 million retirees losing coverage and will actually hike drug costs for 13 million seniors. Bush's tax credit plan for the uninsured is more of the same, a big windfall to insurance companies that will leave the cost of health care coverage out of the reach of the great majority of uninsured. The lack of health insurance for tens of millions of Americans has serious negative consequences and economic costs not only for the uninsured themselves but also for their families, the communities they live in, and the whole country. The situation is dire and is expected to worsen. The persistence of uninsurance in the United States requires a national and coherent strategy aimed at covering the entire population. Federal leadership and federal dollars are necessary to eliminate uninsurance. Universal health insurance coverage will only be achieved when the principle of universality is embodied in federal public policy. Federal incremental reforms over the past twenty years have made little progress. Federal reforms of employment-based insurance have not included provisions for assuring affordability. Your health care benefits at work are at risk. If the supermarket giant's profitable, growing Fortune 50 mega corporations can launch an attack on health care benefits, then every employer is sure to follow. In one year, over 2 million lost health insurance in this country, that's over 6,000 workers per day. "We must have national health care reform. No one company, no one union, no industry or group of workers alone can fix the health care system. We can patch it up. We can protect our members for another contract term. But the system will continue to falter, exacting an increasing cost on both workers and employers and leaving more and more families without health care." "2004 is the year to put health care reform on the political agenda and demand that every candidate for office commits to comprehensive, affordable health insurance for every working family." "No worker should ever again be forced to choose between a paycheck and health care benefits. No worker should ever again be forced into the streets for five months to protect health care for their families." What's really behind "Modernization"? Original Medicare was simple (easy to understand and use), "Modernized" Medicare deviates radically from these principles. Instead of simple, effective, and cheap, we find ourselves saddled with benefits that are confusing, far from comprehensive and expensive. Many seniors poor enough to qualify for Medicaid as well as Medicare will loose their more affordable and comprehensive Medicaid drug benefit. The architects of Medicare modernization do not believe that governments should bargain effectively with health care industries on behalf of the entire population for better health care at lower cost. Consequently, the costs are high and the benefits are meager. The real winners from this legislation are the drug industry and the managed care companies, not patients and their families. From The Presidents Speech: "Health care for all is a commitment of a caring society, not just Medicare. We all want to put doctors and nurses back in charge of American medicine to give us the best possible health care, but societies must be responsible to see that everybody is covered and that everybody receives access to quality health care."Here are two quotes from the Presidents speech with my comments."These problems will not be solved with a national health care system that dictates coverage and rations care." Comment: A national health care plan assures necessary health care coverage for all. Bush's market-based health care rations care far greater than any national health care plan. "We must put doctors, and nurses, and patients back in charge of American medicine. " An amiable statement, but he didn't say how to do it. The HMOs and insurance companies don't act like their going to do anything about intervening in physician's decisions. A national health care plan is just a public insurance program, it does not interfere with doctors decisions. Access to care is impeded for people who have no health insurance at all. They don't receive timely care because they can't pay the price. They put off seeing a doctor because their pockets are empty. People go without prescription drugs because they can't afford them. Out-of-pocket expenses for the middle class are going to continue to increase if we don't demand a rational system. The solutions are simple if we stop listening to those who don't know what they are talking about (including the President) or are influenced by special interest. We should look also to other countries that have been successful in establishing a national health plan that saves money and covers all. Don't expect a plan to be perfect. We will probably have to put up with some rationing and some privileges for the rich, but not something as outrageous and notorious as we have now. The United States rations care in the most irrational way by closing the door by price, culture, bias, and limited resources. In my opinion the president's speech is all talk and no rightful action.
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