A Social Innovator for Healthcare, Economic Security, and Personal Dignity.

Federal Medicare Update

Bryce Marable

Health & Disability Advocates

October 29, 2015

A Social Innovator for Healthcare, Economic Security, and Personal Dignity.

Today We Will Talk About

• Federal Budget

• New Observation Status law

• New Medicare-related bills that have been introduced

A Social Innovator for Healthcare, Economic Security, and Personal Dignity.

Proposed Budget Deal

In the proposed deal, Congress and the White House would:

1. agree to two-year budget

2. suspend debt limit

3. prevent a more dramatic Part B premium increase for 30% of Medicare beneficiaries

4. repeal one section of the ACA

5. make slight changes to Medicare payments

6. Kept Social Security Disability Fund solvent

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Budget Deal and Debt Limit

• The two-year budget deal provides top-line spending numbers; appropriations will still have to hash out specifics by December 11.

• The debt limit of $18.4 trillion is suspended until March 2017

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Part B Premiums

• Premium will stay at $104 per month for 70% of Medicare enrollees

• Premiums proposed to increase to $120 per month, plus $3 surcharge for the other 30% of Medicare beneficiaries. – Pay the $3 surcharge until 2021

– Surcharge would be higher for high-income beneficiaries

• Medicare deductible proposed to increase to $167 instead of $223.

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Causes of the Increase

• No Cost- of-Living Adjustment (COLA) increase for Social Security beneficiaries

• Higher than expected use of outpatient/ Part B

• “Hold-harmless” provision of Social Security Act:

– increase in a person’s Medicare premium cannot exceed the increase in person’s Social Security benefit

– this only applies to people who have Part B deducted from SS checks

A Social Innovator for Healthcare, Economic Security, and Personal Dignity.

Who Makes Up the 30%?

• New Medicare enrollees in 2016 (2.8 million)

• Beneficiaries not collecting Social Security Benefits (1.6 million)

• Beneficiaries paying higher income-related premiums (3.1 million)

• Beneficiaries who are dually eligible (9 million)

– State Medicaid programs to bear cost

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Changes to the ACA

• Repeal section of ACA that required employers with more than 200 employees to automatically enroll new employees in a health plan

• This reduces budget deficit over 2016-2025

– Employees get more taxable income (as opposed to health benefits)

– More people pay fines for not having health insurance

A Social Innovator for Healthcare, Economic Security, and Personal Dignity.

Medicare Payments

• Continues 2% cut in Medicare payments

• Ends higher Medicare payments to providers who charge more for services delivered on an outpatient basis at hospital-owned practices

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Social Security Disability Fund Solvent

• Reallocates money from retirement and survivors insurance fund to Social Security disability fund.

– Money will last for about seven years

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Cash Cliff Demonstration Project

• Benefits now end if a person with a disability makes more than $1,090 per month for more than nine months

• Demonstration project would decrease benefits by $1 for every $2 earned

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Additional Changes to SSDI

• Expands use of disability investigation units

• Increases fines and punishments for fraud

• Requires doctors to review initial disability determinations

• Requires SSA to move to electronic record keeping

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Important Changes to Observation Status

• NOTICE (Notice of Observation Treatment and Implication for Care Eligibility) Act

• President Obama signed into law on August 7th

• Hospitals must inform Medicare beneficiaries who have been in the hospital on observation status for more than 24 hours that they are on observation status and still considered an outpatient.

• Within 36 hours after a patient begins to receive observation services, the patient must be informed, both orally and in writing, of observation status.

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Written Notice

• Must explain that because the beneficiary is receiving outpatient services, the cost-sharing arrangements for outpatient services will apply to their stay.

• Must say that the beneficiary's outpatient stay will not count toward the three-day inpatient stay required for a beneficiary to be eligible for Medicare coverage at a skilled-nursing facility.

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This is Good News!

• Medicare enrollees will not get unexpectedly high medical bills for care received after discharge at skilled nursing facility.

• Also won’t encounter unexpectedly high bills for drugs received during hospital care and for Part B copays.

A Social Innovator for Healthcare, Economic Security, and Personal Dignity.

But Could be Better

• Although Medicare beneficiaries will be informed of their observation status, there is no process for them to appeal it.

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Bills that Have Been Introduced

And have not yet become law

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Medicare Part D

• S. 1884/ H.R. 3261: Medicare Prescription Drug Savings and Choice Act of 2015

• Introduced by Rep. Jan Schakowsky and Sen. Dick Durbin

• Introduced in July and assigned to Congressional committees in House, Senate for review

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What Would the Law Do?• The law aims to reduce drug costs for seniors and

persons with disabilities enrolled in Part D by:

– Creating a Medicare-administered Part D plan available nationwide that would include a formulary that is more easy to understand

– Giving HHS Secretary power to negotiate with drug companies for lower prices of covered drugs

• The Medicare administered Part D Plan would include a simplified, more well-defined appeals process for denials of benefits

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Medicare Coverage of Hearing Aids

• H.R. 1653 Medicare Hearing Aid Coverage Act of 2015 and H.R. 2748 Help Extend Auditory Relief (HEAR) Act

• H.R. 1653 Introduced by Rep. Debbie Dingell and under committee review

– Bill is cosponsored by Rep. Schakowsky and five others

• H.R. 2748 has 12 co-sponsors, none from IL

• Both bills would extend Medicare coverage to hearing aids

A Social Innovator for Healthcare, Economic Security, and Personal Dignity.

Remember!

• These bills have only been introduced!

• They have not become law

A Social Innovator for Healthcare, Economic Security, and Personal Dignity.

Stay Updated

• MMW alerts

• Politico, Kaiser Health News

• Govtrack.us

– Get status of bills in Congress

• Illinois Health Matters

– www.illinoishealthmatters.org

– @ILHealthMatters

– IHM monthly newsletter