Connect One Health highlights the upcoming cuts to the Medicare Program for 2015. The focus is about how changes in the Medicare program affect seniors today and retirees who are entering the Medicare Program tomorrow.
Facts about the Current Medicare Budget
- The current budget for Medicare is set at $522 Billion and is approved by President Obama.
- The current reduction in Medicare spending is targeted at $407.2 Billion and will be spread over the next ten years.
- Increases to Medicare part B will go up by $25 in 2018 for new enrollees and by 5-40 percent for those already enrolled in Medicare part B.
- Increases in Medicare Part D premiums will rise by 5-40% by 2018.
- Modified reimbursement schedules for those whose income is below a certain level and who purchase Medicare Supplemental Insurance.
- Decrease in the off-set cost benefits received by rural hospitals.
- Decrease in Skilled Nursing Facility payments for certain SNFs.
Current Differences for Policy Holders and Providers who Accept Medicare
Currently, Medicare is set up as a fee-for-service healthcare system where all providers are paid the same reimbursement rate regardless of where they are located. The exception to that rule is rural providers who qualify for Medicare Enhanced Cost-Based Payments. Changes to the Medicare system would remove the fee-for-service structure and institute a voucher system where seniors in areas with higher costs of living would likely pay more for health services than those who live in areas with lower cost of living.
Reasons for Cuts
The overall reasons given for the Medicare budget cuts is to reduce the national deficit. The reason that is given why Medicare is being targeted for cuts to services is that more seniors are becoming eligible for Medicare benefits and cost of providing those services is driving up debt incurred by the U.S. Government. The cuts to services are designed to help reduce the overall cost of the Medicare program so that funding is not pulled from education or defense.
The Raw Numbers
The cuts proposed should top $350 Billion dollars and will be seen as a reduction of payments to health care providers. That can also be said to be a shift of payment burdens from Medicare to seniors. Seniors across the nation will need to make up the difference between what Medicare pays and what is owed. That is likely to increase the burden of Medicaid and to States, who participate in the Medicaid program. It will likely also increase the financial levels for seniors who qualify for Medicaid.
The first option is to review your senior insurance plan and make note of what is changing immediately. If you have not signed up for a supplemental plan, then consider doing so. If you are using Medicare Part A and B, take the time to review the Medicare part C (Medicare Advantage) plans to see if a better plan exists that offers you more benefits for the same or less money. If you need help evaluating the changes to Medicare of the options between Medicare C and Medicare A plans, just contact Connect One Health.