NewRetirement Retirement News Digest : Politics and Legislation

Medicare Maze

jberman — Thu, 19 Nov 2009 02:01:00 GMT

The Wall Street Journal, November14th, 2009

When Doug Foth, a retired accountant in Grandview, Wash., got ready to sign up for Medicare last summer, he recruited his daughter, a human- resources manager, to help him.

"We went through the Medicare Web site pretty thoroughly, and when we got done, I'm not sure I knew any more than when I started," says Mr. Foth, 68 years old. "It's very complex."

He turned to one of a handful of services that have started up, or expanded, in the past three years to help older adults choose from a growing number of Medicare options. He paid $150 to a new service called Allsup Medicare Advisor to sort out the possibilities—and got help fending off a penalty for signing up after age 65.

Tomorrow marks the start of the six-week "open enrollment" season for Medicare, during which people who use the health-insurance program can make changes to almost every part of their coverage (with the exception of Part A, which is basically hospital insurance).

The addition of Medicare's prescription-drug benefit in 2006 and the widespread loss of corporate retiree health benefits have made those choices more complicated—and potentially more expensive—both for current and would-be beneficiaries.

That's why more services are stepping in to offer advice. Some charge a fee; others are free to consumers but get commissions from insurers. Still more services, mainly supported by the government and nonprofit groups, provide more-limited online tools or telephone counseling at no charge.

Where to start? Read through "Medicare & You 2010," the government's overview of the program and your primary options. (Go to medicare.gov and look under "Learn More.")

At that point, if you need help, you might want to combine free tools with advice from a paid service. Here are some possibilities.

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AARP endorses plan for health care reform

jberman — Tue, 10 Nov 2009 10:24:00 GMT

Nevada Appeal, November 8th, 2009

After a lifetime of hard work, no older American deserves to spend their later years struggling with medical bills, foregoing or cutting prescription drugs to make them last or avoiding preventative or basic care because they can't afford the out-of-pocket costs. That is why AARP has been fighting so hard to ensure older Americans are getting the health care coverage they deserve.

After carefully reading both the Affordable Health Care for America Act and the Medicare Physician Payment Reform Act (HR 3962 and HR 3961), AARP's all-volunteer national board has endorsed these bills because they meet the critical needs of older Americans and future generations.

For the more than 45 million Americans in Medicare — 320,000 in Nevada — the House plan makes prescription drugs more affordable by completely closing the dangerous gap in prescription drug coverage known as the doughnut hole, and allowing Medicare to negotiate with drug companies to reduce prescription drug costs.

Right now, the law does not allow Medicare to negotiate prices, and the program must accept the prices given by the pharmaceutical manufacturers. The House bill changes that.

The bill also adds preventive benefits like free cancer screenings, cracks down on waste and fraud, protects the traditional Medicare benefits people in the program rely on and ensures seniors get access to the doctor of their choice or can find a new doctor when they need one.

For all Americans — including more than 70,000 uninsured Nevadans age 50 to 64 who often struggle to find affordable insurance — the House plan makes coverage more affordable by strictly limiting how much more insurance companies can charge based on age.

The House plan guarantees that you'll never be denied affordable coverage because of your health or age. AARP has fought to prevent anyone from coming between you and your doctor; and we've fought to make sure your health care does not take a back seat to insurance company profits.

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Now Is the Time to Weigh Medicare Options

jberman — Wed, 04 Nov 2009 09:31:00 GMT

The New York Times, October 31st, 2009

MEDICARE recipients, it’s your turn.

For the last few weeks, my Patient Money colleague Lesley Alderman and I have been giving advice on how to navigate the open enrollment season for employee health benefits. But Medicare enrollees must also do this annual drill, and in some ways their task can be more complicated.

While employees now typically face a dwindling number of options, Medicare recipients may have the opposite problem — a potentially overwhelming welter of choices. They may need to sort through dozens, even hundreds, of choices during the annual enrollment period, which runs Nov. 15 through Dec. 31.

Those already enrolled in Medicare, of course, might not need to do anything. Assuming the coverage they have now is not changing, and it’s working for them, they can probably stand pat. That might be particularly true for the 35 million people whose main coverage comes directly through the government. In that case all they may need to worry about is their Medicare D prescription drug plans provided by private insurers, if they have such coverage; about 17.5 million of these people in traditional Medicare have the separate drug coverage.

But as I explain below, there are various reasons that staying put might not be a good idea. And making a change means coming to grips with an array of Medicare options that has been expanding at a bewildering rate in the past decade.

There is the traditional Medicare A, which covers hospitalizations and is provided at no charge to enrollees, and Medicare B, which covers fees from doctors and other health care providers and requires a monthly premium. (Because there will be no Social Security cost-of-living increase in 2010, premiums for most current B enrollees will stay the same as for 2009, at $96.40 a month. However, most new enrollees will pay 15 percent more than that, $110.50 a month.

Seniors can also choose from a vast number of specialized plans from private insurers. There’s the Medicare D drug coverage, for example. But there are also fuller private-carrier packages called Medicare Advantage, which often bundle Medicare A and B with a drug plan, along with extra benefits like dental, vision and wellness coverage.

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Lawmakers Target Medicare and Medicaid Fraud

jberman — Fri, 30 Oct 2009 01:45:00 GMT

The Wall Street Journal, October 28th, 2009

The federal government needs to further step up efforts to fight Medicare and Medicaid fraud to generate more savings to help pay for a health-care overhaul, lawmakers said Wednesday.

"The scale of health care fraud in America today is staggering," Senate Judiciary Committee Chairman Patrick Leahy (D., Vt.) said at a hearing. "Now, as health care reform moves through the Senate, I want to make sure we do all we can to tackle the fraud that could undermine efforts to reduce the skyrocketing cost of health care."

Health-overhaul legislation moving through Congress contains provisions to beef up the government's antifraud effort. The U.S. loses at least $60 billion to health-care fraud every year, and some estimates put the cost as high as 10% of the nation's total health-care spending, which exceeds $2 trillion. Medicare, the federal insurance program for the elderly and disabled, and Medicaid, the federal-state program for the poor, are especially susceptible. The government has announced a series of indictments on Medicare and Medicaid fraud in the past two years, including indictments earlier this week involving a Mississippi medical clinic.

Sen. John Cornyn (R., Texas) said government officials still need to figure out why Medicare and Medicaid have a higher rate of fraud than private insurers, especially since Congress is considering creating a public-insurance program. "I'm sure we'll never have enough good guys to outnumber the bad guys in this area." Mr. Cornyn said, asking Health and Human Services and Justice Department officials: "What can you do to reduce it?"

Bill Corr, deputy HHS secretary, said HHS and the Justice Department are making progress, especially by using specialized teams to ferret out fraud. But he agreed that the task is huge. Medicare alone, he testified, receives 4.4 million claims each day, which have to be paid between 14 and 30 days.

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Medicare Fraud: A $60 Billion Crime

jberman — Tue, 27 Oct 2009 00:50:00 GMT

CBS News, October 25th, 2009

Of all the problems facing the United States right now, none are more important than health care.

President Obama says rising costs are driving huge federal budget deficits that imperil our future, and that there is enough waste and fraud in the system to pay for health care reform if it was eliminated.

At the center of both issues is Medicare, the government insurance program that provides health care to 46 million elderly and disabled Americans. But it also provides a rich and steady income stream for criminals who are constantly finding new ways to steal a sizable chunk of the half trillion dollars that are paid out each year in Medicare benefits.

In fact, Medicare fraud - estimated now to total about $60 billion a year - has become one of, if not the most profitable, crimes in America.

This story may raise your blood pressure, along with some troubling questions about our government's ability to manage a medical bureaucracy.

If you want to find Medicare fraud, the first place you should look is South Florida, where 60 Minutes and correspondent Steve Kroft were told it has pushed aside cocaine as the major criminal enterprise.

It's a quiet crime - there are no sirens or gunfire. The only victims are the American taxpayers, and they don't even know they are being ripped off.

FBI Special Agent Brian Waterman, who 60 Minutes rode with for several days, told us the only visible evidence of the crimes are the thousands of tiny clinics and pharmacies that dot the low-rent strip malls.

You don't even know they're there because there's never anyone inside. No doctors, no nurses and no patients.

"This office number should be manned and answered 24 hours a day," Waterman explained, standing outside one of those small, unstaffed businesses.

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Medicare Basic 2010 Premiums Sport Asterisks

jberman — Fri, 23 Oct 2009 09:22:00 GMT

US News & World Report, October 23rd, 2009

The official 2010 Medicare premiums and deductibles for Part A (hospital services) and Part B (doctor and non-hospital expenses) have been released by the Centers for Medicare & Medicaid Services (CMS). It would be difficult to make up a scenario more confusing than the one facing Medicare beneficiaries. Even CMS says it hopes some of the announced rate changes never come to pass, and it supports a Congressional proposal to avoid any increases in premiums next year for these basic services covered by Medicare. Until Congress decides otherwise, however, here is how 2010 looks:

Part A. In addition to inpatient hospital services, Part A covers qualifying expenses in skilled nursing facilities, hospice, and some home health services. People with at least 40 quarters of employment don't have to pay Part A premiums, and that's 99 percent of us. Everyone, however, faces deductibles. For 2010, they will include $1,100 for a hospital stay, up $32 from $1,068 this year. For longer hospital and nursing-home stays, beneficiaries must pay $275 a day for days 61 through 90 (up from $267 this year). If you need to stay longer than 90 days, there is a lifetime reserve bank with 60 days. For these reserve days, the 2010 deductible is $550 per day, up from $534 this year. Daily co-insurance for days 21 through 100 in a skilled nursing home will be $137.50 in 2010, up from $133.50 in 2009. (Medicare does not cover longer nursing-facility stays.)

Part B. In addition to physician services, Part B covers qualifying out-patient hospital care, durable medical equipment, and some other services. There's a Part B deductible, which is being raised to $155 next year from $135 this year. But it's in the premium calculations for 2010 that Part B gets very complicated.

There is a rule that Part B premiums for most people (73 percent of all Medicare beneficiaries) can't rise by more than the rate of increase in the annual COLA for Social Security recipients. In 2010, there is no COLA because of low rates of inflation. So under this "hold harmless" clause, the $96.40 monthly rate charged this year will stay the same in 2010. However, Medicare does need to raise its rates. That's because another rule says that Part B premiums paid by beneficiaries must equal at least 25 percent of total Part B expenses; the other 75 percent is paid directly by the government. Because of continuing healthcare price inflation, CMS must hike Part B premiums on the other 27 percent of recipients to make sure the program continues to collect 25 percent of its overall expenses in premiums.

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Basic Medicare Premium to Rise 15% Next Year

jberman — Wed, 21 Oct 2009 01:15:00 GMT

The New York Times, October 19th, 2009

The basic Medicare premium will shoot up next year by 15 percent, to $110.50 a month, federal officials said Monday.

The increase means that monthly premiums would top $100 for the first time, a stark indication of the rise in medical costs that is driving the debate in Congress about a broad overhaul of the health care system.

About 12 million people, or 27 percent of Medicare beneficiaries, will have to pay higher premiums or have the additional amounts paid on their behalf. The other 73 percent will be shielded from the increase because, under federal law, their Medicare premiums cannot go up more than the increase in their Social Security benefits, and Social Security officials announced last week that there would be no increase in benefits in 2010 because inflation had been extremely low.

Kathleen Sebelius, the secretary of health and human services, urged the Senate to approve a bill, already passed by the House, to block the scheduled increase in Medicare premiums.

“We are in tremendously difficult economic times, and seniors are being hit particularly hard,” Ms. Sebelius said. “The last thing seniors need right now is a substantial increase in their Medicare premiums, and many seniors will see such an increase if no action is taken.”

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California Laws Get Tough on Mortgage Finance

jberman — Thu, 15 Oct 2009 07:52:00 GMT

Housing Wire, October 14th, 2009

California Governor Arnold Schwarzenegger signed seven mortgage finance-related bills into state law Monday. The new laws aim to crack down on fraud, set requirements for loan documents and set restrictions on mortgage and reverse mortgage originators.

Senate Bill (SB) 36 regulates the licensing requirements for residential loan originators in compliance with the federal Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act.

SB 237 requires appraisal management companies (AMCs) and appraisers register with the Office of Real Estate Appraisers and subjects appraisers to the provisions of the Real Estate Appraisers’ Licensing and Certification Law.

SB 239 raises the crime of mortgage fraud from a misdemeanor to a felony and makes it easier for prosecutors to obtain fraudulent loan documents to investigate cases.

Assembly Bill (AB) 260 places restrictions on subprime loans and prohibits originators from “steering” borrowers, or encouraging borrowers to buy riskier loan products when they are eligible for affordable products. It also gives state regulatory agencies the authority to suspend or revoke the licenses of real estate lenders and mortgage brokers that violate the state’s lending laws.

AB 329 sets guidelines for reverse mortgages originated for elderly borrowers — those over 65 years old — requiring specific disclosures and offering counseling service referrals. Originators are also prohibited from selling other financial products to a reverse mortgage borrower.

AB 957 gives the buyers of foreclosed property the right to choose local escrow officers to complete transactions. It prohibits the seller of a residential property from requiring the buyer to use an escrow service company or purchase title insurance chosen by the seller.

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Medicare Advantage at a disadvantage in health debate

jberman — Sat, 10 Oct 2009 09:59:00 GMT

Market Watch, October 8th, 2009

Senate Finance Committee Chairman Max Baucus promises that the huge health-care reform bill his committee will vote on next week will protect Medicare benefits for seniors. But not everyone agrees, and a fight is brewing as lawmakers prepare to take the legislation to the floors of the House and Senate.

At issue is Medicare Advantage, a popular federal government-subsidized program that allows seniors to choose health plans run by insurance companies. Currently about 10 million people - close to a quarter of the 45 million seniors getting Medicare - have signed up for Medicare Advantage.

Members typically get all their Medicare-covered health care through the plans, and the coverage can include prescription drug benefits. There are generally lower co-payments than in regular Medicare -- although enrollees may have to pay a monthly premium to get the extra benefits. Read more from Medicare.gov.

But proposed cuts to the Medicare Advantage program have health insurers and some seniors worried, and at least one amendment to the finance panel's overhaul bill seeks to cushion the blow as money for private plans faces the chopping block. Whether the amendment, offered by Sen. Bill Nelson, D-Fla., makes it into a final bill is now an open question. House legislation also proposes cuts to the program.

A vote on the Senate Finance Committee's bill is set for Tuesday, Senate Majority Leader Harry Reid, D-Nev., said Thursday. The measure costs $829 billion over 10 years, reduces the deficit by $81 billion and covers 94% of Americans. See full story.

President Barack Obama and congressional Democrats want to cut as much as $500 billion from Medicare over the next 10 years to help pay for insuring more Americans.

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Insurers Drop Some Medicare Plans As Rules Tighten

jberman — Sat, 03 Oct 2009 09:24:00 GMT

The Wall Street Journal, October 1st, 2009

More than 660,000 seniors next year will lose the private Medicare plans they now have because some insurers are dropping coverage in response to tougher federal requirements.

Most of those beneficiaries are enrolled in a type of Medicare Advantage plan called Private Fee for Service, where enrollment has surged from about 820,000 three years ago to more than 2.44 million today. PFFS enrollees, unlike those under other Medicare Advantage plans, can see any doctor they like as long as he or she accepts payments through their plan. Medicare Advantage plans are subsidized by the federal government and run by insurance companies; most operate with networks of providers.

Congress, alarmed by the high cost of PFFS plans, voted in 2008 to require the plans to establish networks of providers beginning in 2011. Companies such as Humana Inc., which has established networks that can cover at least 80% of PFFS enrollees, are doing just that.

But Medicare officials acknowledged Thursday that others are pulling out. Plans with a total enrollment of 667,000 people are scheduled to be canceled next year, they said.

WellCare Health Plans Inc., for example, is canceling its PFFS plans for about 110,000 enrollees. Spokeswoman Amy Knapp said the company saw expanding networks to meet the new requirements as an unwise investment. The company, she said, will focus on its HMO and prescription-drug plans.

UnitedHealth Group Inc. is no longer offering PFFS plans to some 2% of its members in markets where no other UnitedHealth Medicare Advantage plan is available.

According to the Centers for Medicare and Medicaid Services, the federal agency that manages Medicare, beneficiaries can choose other private plans or go back to traditional Medicare. The agency said 99% of beneficiaries have access to at least one Advantage plan offered in their area.

Medicare announced Thursday that the premiums for Medicare Advantage plans are rising to an average of $39 a month from $32 a month this year. Premiums for standalone drug plans will be $30 a month on average, up $2 from this year.

The changes are adding fodder to the health-care debate. President Barack Obama and Democrats in Congress have proposed more than $100 billion in payment cuts to private Medicare plans over 10 years to help pay for expanding coverage to the uninsured. They argue that the private insurers are overpaid -- Advantage plans cost the government 14% more on average per beneficiary than traditional Medicare -- and the cuts will help control Medicare costs.

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Government's reverse-mortgage option for seniors is scaled back

jberman — Sat, 03 Oct 2009 09:22:00 GMT

Chicago Daily Herald, October 2nd, 2009

Declining home values have put a serious squeeze on one of the mortgage market's most popular and fastest-growing financing concepts: the Federal Housing Administration's reverse mortgage program for seniors 62 and older.

In a letter to reverse mortgage lenders Sept. 23, FHA Commissioner David H. Stevens said his agency must reduce the maximum amounts seniors can receive on reverse mortgages because of a $798 million estimated budgetary shortfall for the program in the coming fiscal year.

Mortgage industry sources said the move amounts to a 10 percent cutback for all new FHA reverse mortgage applicants starting Oct. 1. Borrowers who already have FHA reverse loans will not be affected.

Peter Bell, president of the National Reverse Mortgage Lenders Association, says the policy change could prevent more than one out of five applicants from paying off their existing home mortgage debt with the proceeds of a new reverse loan. That, in turn, could leave some senior homeowners in danger of falling into serious delinquency on their current loans, even ending up in foreclosure. The total number of seniors affected could be in the tens of thousands, Bell said, since roughly 130,000 new loans are projected for fiscal 2010.

Dennis Ceizyk Sr., vice president of Heartland Mortgage Inc. in Tucson, Ariz., says the FHA's move immediately impacts two of his company's clients - a Phoenix couple in their late 70s who no longer can afford the monthly payments on their existing mortgage. They had planned to take out a reverse mortgage yielding them $92,500 in cash on a house valued at $125,000. The $92,500 lump sum would pay off their $75,000 home mortgage balance, plus closing and other transaction costs, leaving them approximately $6,000.

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Rate of Enrollment in Medicaid Rose Rapidly, Report Says

jberman — Thu, 01 Oct 2009 02:50:00 GMT

The New York Times, September 30th, 2009

The recession is driving up enrollment in Medicaid at higher than expected rates, threatening gargantuan state budget gaps even as Congress and the White House seek to expand the government health insurance program for the poor and disabled, according to a survey of state Medicaid directors released Wednesday.

The annual survey, conducted for the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured, found that Medicaid had been spared the worst effects of massive state budget shortfalls because of federal aid in the stimulus package. But it also revealed grave concerns about what will happen when that aid ends at the close of 2010.

Enrollment in state Medicaid programs grew by an average of 5.4 percent in the previous fiscal year, the highest rate in six years, according to the Kaiser survey.

That was well above the 3.6 percent growth forecast by the Medicaid directors a year earlier. In this year’s survey, the directors projected that enrollment would continue to accelerate in the current 2010 fiscal year, to 6.6 percent.

The states and the federal government share the $333 billion annual cost of Medicaid, which insured 62 million low-income and disabled people at some point in 2007. It is the states, however, that regulate that spending by setting eligibility cutoffs, benefit levels and provider payments, within federal guidelines.

The Kaiser survey found that the growth in spending on Medicaid in 2009, at 7.9 percent, exceeded the growth in enrollment and was the highest in five years.

That number also may increase this year. Based on initial legislative appropriations, the agency directors projected spending growth of 6.3 percent. But three-fourths of them said they already fear those outlays will not be enough and that lawmakers will need to alter their budgets, either by finding more money or, more likely, by cutting benefits or payments to doctors and hospitals.

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Is this subprime redux?

jberman — Sat, 12 Sep 2009 05:15:00 GMT

Las Vegas Sun, September 10th, 2009

Many Wall Street investment banks are on the verge of taking the plunge into another scheme that involves bundling and reselling what are thought to be sure-thing assets, just as bundled subprime mortgages were thought to be sure things.

The banks are planning to buy life insurance policies from senior citizens and make money by selling them to investors, who would cash in if the seniors soon died.

It would work, morbidly, like this: A senior citizen would be persuaded to sell his life insurance policy for instant cash. If the policy is for $500,000, the bank would pay, say, $250,000.

The bank would then take over the premiums, become the beneficiary and find an investor for that policy. If the senior citizen were to die two years later, the bank and investor would share a profit of $125,000 for each of those two years, minus the premiums paid.

Such “life settlements” have been around for decades but on a rather insignificant scale. Now the big banks, trying to recover from their subprime fiasco, are in serious talks about buying life settlements in massive quantity, bundling them into securities and selling them to national and international investors.

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Automatic Cuts Could Help Push Past a Health Hurdle

jberman — Sat, 12 Sep 2009 04:25:00 GMT

The New York Times, September 10th, 2009

President Obama’s new call to impose automatic spending cuts if the health care overhaul adds “one dime” to federal budget deficits could help push his top domestic priority over one of the biggest hurdles in its path through Congress.

But once in law, such automatic triggers have not proved effective as a way to reduce federal spending. In the past, Congress and the White House have simply overridden or ignored them. This time, advocates insist, would be different.

In his prime-time address on Wednesday to a joint session of Congress, Mr. Obama restated his only line in the sand for a health care bill: He will not sign any measure that “adds one dime to the deficit, now or in the future, period.” But for the first time he asked Congress to mandate that future Congresses and presidents “come forward with more spending cuts if the savings we promised don’t materialize.”

While the White House does not have a specific method in mind, health economists have suggested that one such trigger could be a limit on Medicare payments to doctors and hospitals.

With such a requirement written into legislation, precedents suggest that the nonpartisan Congressional Budget Office would be likely to conclude that the bill would not add to annual deficits, despite the poor track record for triggers.

And a finding of deficit neutrality from the budget office, which “scores” costs and savings over a 10-year period, is crucial to passing a health care bill.

Already the budget office’s analyses of overhaul bills adopted by several House and Senate committees, which found that the measures would add to federal deficits, have stymied the bills’ progress. And the budget office’s preliminary findings about the still-unfinished work of the fifth and last Congressional panel necessary to act, the Senate Finance Committee, has contributed to a summer of delays there.

But a deficit trigger like Mr. Obama now proposes ultimately could bridge a fiscal gap.

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Bristling at Health Plan to Cover Early Retirees

jberman — Thu, 10 Sep 2009 04:06:00 GMT

The New York Times, September 9th, 2009

Within the battle over President Obama’s health care overhaul, critics of organized labor have latched onto a little-noticed provision in the legislation already circulating in Congress. The provision would cost $10 billion in federal money to subsidize employer-sponsored health plans covering early retirees, as a bridge to Medicare.

Labor’s critics assert that the provision, aimed at retirees ages 55 to 64, is a Democratic payback to unions and would further drive up the federal deficit.

“It looks like it’s just a big giveaway of $10 billion to bail out a bunch of unionized companies,” said Gregory Mourad, director of legislation for the National Right to Work Committee, a nonprofit group that often battles organized labor. “It’s part of a Christmas list of giveaways to unions.”

But supporters deny that the provision is a sop to labor, saying it would help stabilize the health insurance system and would benefit union and nonunion retirees alike, as well as their employers. Backers include the United Automobile Workers, the United Steelworkers and the A.F.L.-C.I.O.

Variations of this program have been approved by the three House committees that have adopted health bills, and by the Senate Health, Education, Labor and Pensions Committee.

It is not clear whether the provision will be included in whatever bill the Senate Finance Committee may eventually come up with, under the chairmanship of Max Baucus, Democrat of Montana. Under the provision, the federal government would pay as much as $10 billion to cover 80 percent of the cost of an early retiree’s medical claims of more than $15,000, with a cap at $90,000 — at which point the employer’s plan would pay the rest.

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