CHA Blog

The California HealthCare Foundation recently published its 2010 overview report on the demographics, health status, insurance coverage, quality of care, utilization, and spending of Medicare in California. Consumer advocates, health care providers, and policymakers can use its factual framework to better understand California’s Medicare population and inform their efforts in designing effective programs and policies for the state’s beneficiaries.

Some of the report’s key findings include:

• California’s elderly population (those age 65 and older) is expected to more than double between 2000 and 2030.
• California has the largest number of Medicare beneficiaries of any state — 4.5 million enrollees. This number will continue to increase as California’s population ages and the percentage of those by Medicare rises.
• Medicare’s reimbursement for care delivered to California beneficiaries is higher than the national average — as of 2006, it’s about $600 more per beneficiary.
• In 2004 and 2005, total annual medical payments per Medicare beneficiary in California averaged $11,326, of which $1,330 (11%) came out of the beneficiaries’ own pockets.
• A large percentage of Medicare beneficiaries suffer from multiple chronic illnesses. In 2005, 79% reported having two or more chronic conditions and 37% reported four or more.

Download the full report for more information:

• California Health Care Almanac: Medicare Facts and Figures 2010 (PDF)

On a call regarding health care reform and Medicare beneficiaries today, Health and Human Services Secretary Kathlene Sebelius and staff from both the White House Office of Health Reform and White House Office of Public Engagement specifically asked all beneficiaries and Medicare advocates to help end the myths that health reform hurts Medicare.  In fact, health reform strengthens Medicare in several key ways.  For instance, several Medicare provisions in the newly introduced House bill, Affordable Health Care for America Act (H.R. 3962) are that it:

1. Immediately begins reducing out-of-pocket costs in the Part D coverage gap, or donut hole by $500 in 2010 and eliminates the gap altogether by 2019 (versus 2024 in the earlier version of the House bill).
2. Allows the government and Part D plans to negotiate lower drug prices for Medicare beneficiaries.
3. Improves quality of care and, through a number of payment method changes, reduces unnecessary hospital admissions and re-admissions.
4. Emphasizes prevention and wellness by eliminating any deductible or copayment amounts for Medicare-covered preventive services.
5. Increases coordination of care for beneficiaries with chronic conditions by changing how Medicare reimburses for certain services.
6. Provides affordable insurance coverage options for people 55-64. Many people without good coverage during this time period may postpone getting needed treatment until they have Medicare at age 65. This results in 1) them having poorer health and more serious health conditions and 2) Medicare having higher expenditures. Making sure this pre-Medicare population has health coverage will actually help lower Medicare costs.
7. Extends Medicare’s long-term solvency by at least 5 years.

Secretary Sebelius and staff reiterated President Obama’s promise that Medicare is a sacred trust and they fully intend to keep and strengthen that trust. In an effort to support this promise, they asked assistance in ending the myth that health reform is bad for Medicare.  One challenge continues to be that several Medicare Advantage plans are sending out misleading information to plan enrollees that health reform will cut benefits. They don’t explain that health reform will cut the overpayment of subsidies to MA plan sponsors, NOT Medicare benefits themselves.  As a result if this misleading information, many beneficiaries erroneously believe health reform will hurt their Medicare and have opposed reform legislation.

One easy resource White House staff suggest to share with people who have been misinformed is Obama’s 4-minute video on health reform. The video is at WhiteHouse.gov.

I’ll also be posting a newsletter article next week with many more resources and good articles to share with people on health reform facts and how it affects Medicare beneficiaries and strengthens the Medicare program.

The H1N1 virus vaccine will be provided to Medicare beneficiaries as an additional Part B preventive immunization service. Medicare typically pays for only one vaccination per year, unless additional vaccines/doses are medically necessary. The Influenza A (H1 N1) vaccine qualifies as an additional medically necessary vaccine. If the H1 N1 vaccine requires more than one dose, additional doses will also be covered.

Note that Medicare will pay for the vaccine’s administration fee only, not the vaccine itself as these vaccines are being given to providers free of charge. Also, the provider administration payment rate will be the same as that for the seasonal influenza virus vaccine covered under Medicare’s Part B preventive immunization services.

If a Medicare beneficiary receives the H1N1 vaccination from a non-Medicare provider,  Medicare will reimburse the beneficiary up to the approved amount for the administration cost only. To receive reimbursement, the beneficiary must submit a CMS Form 1490S to their local Medicare contractor. In California the Part Medicare Part B contractor is Palmetto GBA. The CMS form must be sent to:

• J1 MAC Palmetto GBA, P.O. Box 1051, Augusta, Georgia 30903

Learn more about Medicare’s coverage of H1N1 (PDF) and payment to providers. (Center for Medicare and Medicaid Services (CMS) bulletin)

Read general information on Medicare covered services.

Medicare is the United States’ first universal health care system for people 65 and older and some people younger than 65 with a disability. Dr. John R. Burton, Professor at Johns Hopkins University, recently wrote an interesting piece on lessons Medicare can offer us in terms of national health care reform. 

Mr. Burton reflects that “Medicare eliminated the fragmented, episodic and often dehumanizing care that many retired seniors were forced to seek through emergency departments or charitable sources because they no longer had coverage from an employer.” Medicare’s implementation “increased the demand for primary care from physicians in private practice,” and as beneficiaries then had access to comprehensive primary care, ” overall health care quality went up, and average per-patient costs went down.”

Read Dr. Burton’s full article, “Medicare Offers Lessons on National Health Care Reform.”

See our section on Medicare Basics for information on the Medicare program.

The Centers for Medicare and Medicaid Services (CMS) recently revised their tip sheet explaining what prescription drugs are covered under Medicare Part A (hospital insurance), Medicare Part B (medical insurance), and Medicare Part D (prescription drug coverage). 

If you or your clients have questions about which part of Medicare covers what drugs, this is a good place to start.

In general, Part A only covers drugs that are administered as part of a beneficiary’s treatment while in a hospital or skilled nursing facility. Part B generally covers drugs that aren’t normally self-administered and instead are given as part of a doctor’s service. Coverage is usually limited to drugs that are given by infusion or injection. If the injection is self-administered or isn’t given as part of a doctor’s service, Part B generally won’t cover it.

Part B also covers several other drugs, including: 

• Various vaccination shots (flu shot, pneumococcal shot, Hepatitis B shot)
• Some drugs used in infusion pumps and nebulizers
• Osteoporosis drugs
• Immunosuppressant drugs
• Some oral anti-cancer drugs

For a complete listing and explanation, see the CMS tip sheet.

Part D provides comprehensive coverage for many generic and brand-name drugs and is offered through private Part D prescription drug plans. All Medicare drug plans must generally cover at least 2 drugs in each drug category, yet they can choose which 2 drugs to cover. In 6 drug categories, however, Medicare drug plans are required to cover all drugs. These 6 categories include: antidepressants, antipsychotics, anticonvulsants (drugs toprevent seizures), antiretrovirals (drugs to treat HIV/AIDS), immunosuppressants, and antineoplastics (anti-cancer drugs).

For the first time in more than three decades, Social Security beneficiaries will not get any increase in their benefits next year, according to forecasts from the Obama Administration and Congressional Budget Office. This will affect over 49 million Americans receiving Social Security benefits nationwide, 4.5 million of whom live in California. 

Social Security typically increases benefits annually to keep up with rising prices of consumer goods. This year, in 2009, the increase was 5.8%, and beneficiaries have received an automatic increase every year since 1975. The current economic recession, however, coupled with other factors such as decline in energy prices, has resulted in low inflation, which likely will result in the lack of a cost-of-living increase for at least the next two years, possibly three. The Obama Administration and CBO estimate a modest 0.8-1.4% increase for 2013.

Federal law mandates that most Social Security beneficiaries cannot have their Medicare Part B premiums increase by more than the dollar amount of the cost-of-living increase in their Social Security checks. Since there will be no COLA increase, about 75% of Medicare beneficiaries’ Part B premiums will remain the same ($96.40) for 2010. 

However, about 25% of Medicare beneficiaries are not protected by this law and could see their premiums increase. CBO estimates the basic premium will rise to $119 next year, $123 in 2011 and $128 in 2012 for those not protected by the law. Beneficiaries who aren’t protected by this law include:

• New enrollees in Part B (because they did not have the premium withheld from their Social Security benefit in the prior year),
• Higher-income enrollees who are subject to an income-related premium (see our chart on Part B Premiums for more info), and
• Individuals who do not have the Part B premium withheld from their Social Security checks, nearly all of whom have their premiums paid by Medicaid (Medi-Cal in California).

In addition, millions of beneficiaries also may experience higher premiums for drug coverage under Medicare Part D because there are no laws that prevent such an increase. If such an increase in Part D premiums does occur, beneficiaries will see their Social Security checks reduced for the first time.

For more information, see the following articles from the Congressional Budget Office (CBO):

• Why CBO Projects No Social Security COLA for 2010 to 2012 Under Current Law
• Effect of a Zero Social Security COLA on Part B Premiums in Medicare

On February 17, 2009, President Barack Obama signed into law the American Recovery and Reinvestment Act of 2009, Pub. L. No. 110-329. The Recovery Act authorizes $789 billion in new federal spending to save or create 3.5 million jobs, reduce taxes for low- or moderate-income households, help provide health coverage for people who have lost their jobs, protect Medicaid beneficiaries from state cuts, invest in the nation’s infrastructure, and more. The law contains provisions relating to Medicare, Medicaid (Medi-Cal in California), the Administration on Aging (AoA), and Social Security, including a one-time payment of $250 to each of the more than 60 million beneficiaries receiving Social Security and/or Supplemental Security Income (SSI). Below is a brief highlight of the Recovery Act’s provisions relating to these programs.

• The Qualified Individual (QI) program is extended to December 31, 2010. (The Medicare Improvements for Patients and Providers Act of 2008 – MIPPA – extended it until December 31, 2009.) This program pays the Medicare Part B monthly premium for qualified beneficiaries with low-incomes and assets.
• A 65% tax subsidy for the cost of health benefits through COBRA. COBRA, the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986 (PDF) is the federal law that gives certain employees the right to continue their group health insurance when it would otherwise end.   As COBRA coverage can be quite expensive, this tax subsidy makes this continued health care coverage more affordable for the unemployed and their families. Millions of individuals, including those who previously declined employer-provided coverage under COBRA, are eligible to receive a subsidy on their premiums for up to 9 months after being involuntary terminated from their job. People who lost or lose their jobs on or after September 1, 2008 through December 31, 2009 can qualify for this subsidy. See the Department of Labor’s website for more information on the COBRA subsidy.
• A one-time payment of $250 will be sent to people who receive Social Security benefits, Supplemental Security Income (SSI), Veterans Affairs or Railroad Retirement benefits. The Administration on Aging expects all payments to be delivered by late May 2009.  People should not contact the Social Security Administration (SSA) unless they do not receive the check by June 4, 2009. Payment will not count as income when determining eligibility for or the amount of benefits under any Federal or federally funded program, such as SSI, Medicaid (Medi-Cal in California), Medicare Part D’s Low-Income Subsidy, Food Stamps or housing assistance. Also, it does not count toward the resource limit for SSI or any other Federal or federally funded program for 9 months following the date of receipt.
• Increased Federal Medical Assistance Percentage (FMAP) of Medicaid payments. The FMAP is the federal reimbursement rate for state Medicaid spending. The Recovery Act includes at least a 6.2% increase in every state’s FMAP – this will provide more federal dollars for every dollar California’s Medi-Cal program spends.
• Funding for Health Information Technology (IT) in Medicare and Medicaid. The Recovery Act requires the Federal government to take the lead in health information technology (such as electronic health records) by establishing standards for nationwide electronic exchange and use of health information to improve quality and coordination of care by 2010. The provision also invests $19 billion in health information technology infrastructure and Medicare and Medicaid incentives to encourage doctors, hospitals and other providers to use health IT for electronically exchanging patients’ health information.
• Funding for Administration on Aging provisions. The Recovery Act includes $100 million for congregate meals programs and home-delivered meals programs run by the AoA.

For more information on the Recovery Act, see:

• White House press release and fact sheets on the Recovery Act
• California’s website to track the Recovery Act’s funds for health and other efforts

This new web-based and downloadable tool guides people who are newly eligible for Medicare (either by age or having a disability) through commonly asked questions and important action steps to take to ensure they get the most of their Medicare coverage. This tool helps beneficiaries:

• Understand how to enroll in Medicare, and understand the rules for when they can delay enrollment without a penalty;
• Know if they have creditable drug coverage (either through Medicare Part D or other drug coverage);
• Know their options for supplementing Medicare;
• Be aware of low-income programs to help cover Medicare costs for those who qualify; and
• Know resources available for help and for more information on each question.

As the baby boomer population continues to age, this is a handy tool for advocates, providers and counselors to give to their clients, both those coming into Medicare due to age, and those qualifying due to a disability.

View this tool online or download the pdf version.