Latest Proposed Medicare Revisions

(10/24/12)-Under the terms of a proposed settlement of a nationwide class-action suit, the Obama administration has agreed to reject the old rule that required many Medicare beneficiaries to show a likelihood of medical or functional improvement before Medicare would pay for skilled nursing, home health-care and outpatient therapy services.

Beneficiaries will no longer be required to show the likelihood of medical or functional improvement before Medicare would pay for these services.

The criteria will now be that Medicare will pay for such services if they are needed to "maintain the patient's current condition or prevent or slow further deterioration"..

Thus, the question is one of need for the care, even if the patient's condition may not improve, as long as it prevents or slows further deterioration. The lead plaintiff in the case was Glenda R.Jimmo, 76, of Bristol, Vt., who was blind since childhood.

Her right leg was amputated below the knee, because of blood circulation problems related to diabetes, and she is in a wheelchair. She received visits at home from nurses and home health a aides who provided her with wound care and other treatments. She was denied Medicare coverage on the grounds that her condition was not likely to improve.

The proposed settlement between lawyers from the Justice Department, and the Department of Health and Human Services was submitted last week to Christina C. Reiss, the chief judge of the Federal District Court in Vermont. She is expected to approve it, and she would have the authority to enforce it for up to 4 years. The change applies Medicare Advantage plans also.

Under the settlement, the federal court in Vermont will certify a nationwide class of more than 10,000 Medicare beneficiaries whose claim for skilled nursing and therapy services were denied before Jan. 18, 2011, when the lawsuit was filed.

(1/7/10)- Both the House and the Senate versions of the health-reform act contains provisions to squeeze nearly half-trillion dollars from projected spending on Medicare over the next 10years. These savings would help offset the cost of providing coverage to about 30 million uninsured Americans, who would gain health care insurance under the reform measure.

At the same time, federal accountants say the money would help shore up the Medicare trust fund, which helps to pay the bill for the hospital expense of Medicare beneficiaries.

In affect you might call this double dipping accounting since the Medicare savings would mean both more money available to spend now, and the appearance of more money to spend down the road.

Richard S. Foster, the chief Medicare actuary agreed with the Congressional Budget Office assessment, that stated the same money can't be used for both purposes without double counting. He traces the confusion to different accounting rules used for the federal budget and for the Medicare trust fund.

Mr. Foster said that if the savings in the Senate bill are achieved they would add nine year to the life of the Medicare hospital trust fund, so that it would be exhausted in 2026 rather than 2017.

(1999)- Updating the article below the Medicare Commission under Senator John Breaux of Louisiana failed to achieve the 11 votes needed to pass any recommendations in connection with Medicare reform. The Commission's tenure has ended and therefore any reforms of Medicare must come from Congress and the President. On the positive side it does appear that all parties recognize the fact that the elderly do need some assistance with prescription drug expenses. There is a good chance that some form of assistance for drug expenses for the elderly will be passed. At best this is many months down the road. The article below is still very relevant since it explains the positions and viewpoints of the different sides.

Please also see our articles on pending prescription drug legislation:
Bills Proposed to Aid with Prescription Drug Costs
Medicare-Helping with Prescription Drug Costs
Medicare Spending is Down-Who Should Benefit
Security and Social Security-Can They Co-Exist in a Balanced Budget

The bipartisan Federal advisory commission issued their report this week, to the 17-member commission, created by Congress to recommend ways of solving Medicare's long-term financial problems. Senator John B. Breaux, Democrat of Louisiana, heads the advisory commission. We do not have the exact particulars of their recommendations, but as soon as they are available we will pass them on to you.

In general we do have some information available. Eligibility age would be gradually increased over the years from 65 to 67. Premium payments would be increased depending on the income of the individual. Higher income people would be required to pay higher premiums. Beneficiaries would be required to pay 10 percent of the cost of home health care visits as opposed to 0 co-payment now. Once again, steps would be taken to encourage beneficiaries to opt for private health plans as opposed to Medicare as we know it today. There are now 39 million elderly or disabled people enrolled in Medicare. Many are fearful that the private plans would get the "healthier" beneficiaries, leaving the less healthy behind in a weakened Medicare plan. This might result in a sharply higher Medicare premium rate.

Also proposed under the plan is the offer from Medicare to pay a fixed amount to each beneficiary. The beneficiary would then purchase insurance from a private health plan or from the Government. Medicare would no longer pay for each hospital admission or for each doctor's office visit.

The final report from the 17-member commission was due March 1,1999. On February 24,1999 the Commission agreed to postpone the March 1, 1999 deadline. The votes of at least 11 of the 17 members of the Commission are needed to endorse any recommendation. Sen. Breaux was able to gather support for his proposals from only 10 of the members. The other 7 members supposedly favor prescription drug coverage for all Medicare beneficiaries. Therefore the Commission's tenure ended and it failed to achieve the necessary votes to make any binding recommendations.

In 1998 Medicare spending increased by only 1.5 percent. This was the smallest percentage increase since the program began in 1965. The Medicare Hospital Insurance Trust Fund had been expected to lose $4 billion in 1998, but instead it posted a $1 billion surplus. Spending from the hospital trust fund declined last year by one-half of one percent. Spending for doctors' services and other items covered by a separate fund rose by 5.1 percent. The latest evaluation calls for the Fund to become depleted by 2012.


By Allan Rubin
updated October 24, 2012

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