Articles:
Information
on Medicare (Amounts for 2008 Provided)
Medicare is a federal program that provides
insurance for people 65 and older and for people under 65 who who have
permanent kidney failure or who have certain disabilities. The
Health care Finance Administration (HCFA) administers the program with
the U.S. Department of Health and Human Services (HHS).
There are two parts of Medicare, Part A (Hospital
Insurance) and Part B (Medical Insurance). Part A covers hospital,
home health care, hospice, and skilled nursing facilities. This
portion of Medicare is usually provided at no cost to the member, since
most people either worked themselves or had spouses that worked and paid
taxes. Part B is provided as an option to eligible members, who
pay an additional cost. Part B covers physician and outpatient
hospital care, as well as, some other services, such as lab and
radiology tests. There is also available Part D for Prescription
Drugs. For more information on Part D, please click
here. The cost for Part B is
approximately $96.40 a month, which may be deducted automatically from
your Social Security check.
Aside from the premium costs, the Medicare
program does forward some additional out of pocket expenses to the
member. For Part A, there is a deductible (approximately
$1,024.00
per benefit period) and co-insurance of about $256.00 per day during an
inpatient stay. The cost per day increases after the 90th day.
In addition, Medicare pays just 80% for certain durable medical
equipment, home health care visits and other items. Medicare
does not cover all items, and it is imperative to review the Medicare
guidelines for what is and what is not covered.
The additional costs for Part B, aside from the
monthly premium, include a deductible of $135.00 and co-insurance of
20%, since Medicare continues to pay just 80% for covered services.
The payment amount is determined by using an RBRVS payment methodology
(Resource Based Relative Value Studies) that assigns a value for each
medical procedure.
These sections cover the basics of the Medicare
program and are available as general information only. For
additional information on Medicare, visit the Medicare website at http://www.medicare.gov *
information obtained from Medicare.gov
The
Latest on the New Medicare Prescription Drug Program
The latest law on Medicare, "The
Medicare Prescription Drug and Modernization Act of 2003" is the most
comprehensive change to the Medicare system since its inception in 1965.
Some of the key elements in this act, include the following:
1. Discount Drug Card -
Will provide subscribers up to 15% discount when purchasing prescription
drugs. This will be temporary until 2006, when a voluntary drug
purchase plan will be in effect.
2. Program Cost - Subscribers would be required to pay
approximately $35 per month and a $250 annual deductible.
3. Coverage - The new plan will pay 75% of drug costs to $2250.
There will be no coverage from $2250 to $5100. The plan will cover
95% of costs over $5100.
4. Out of Pocket Limits - Annual out of pocket limit is $3600 per
year plus 5% over $5100.
For more information on Part D, Prescription Coverage,
please click here.
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Previous Medicare Articles
The Number of Seniors without Drug Coverage is
Dramatically Increasing
Today,
nearly 1/3 of all seniors go without prescription drug coverage.
The result is that they must pay out of pocket for their drug
purchases, but this is a major expense.
The Federal Government’s health insurance program, Medicare,
does not include a prescription drug benefit for its members.
HMO plans that have Medicare enrollees are also not required to
offer prescription drug benefits to its members, which increases the
numbers of elderly going without a prescription drug benefit.
The Federal Government is currently taking up this issue in
Congress and they are trying to decide whether the Government should pay
and/or can afford to expand Medicare’s benefit coverage to include
prescriptions.
A major hurdle Congress must face before they can achieve victory
is to confront drug manufacturers who do not wish to conform to
Medicare’s price constraints.
Medicare pays its medical providers based on a payment
methodology called Resource Based Relative Value Studies or RBRVS and on
the Average Wholesale Price of a medication.
Drug manufacturers feel this would cut into their profits because
Medicare’s payment will be substantially less than if one were to
purchase the same medication/product on their own. back
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Why
are Drugs so Expensive?
There is a big debate in Congress on
trying to determine if prescription coverage should be expanded to
Medicare beneficiaries. The
issue has been raised because many Medicare recipients do not receive
the medications they need due to their high costs.
Pharmaceutical companies are part of an industry that is quite
lucrative. They state that
they can spend $500 million researching a particular drug before it is
ready for the market. This
is the cost of innovation, as the public has seen a rise in new
medications in recent years. These
same pharmaceutical companies are against having Congress expand
prescription coverage to Medicare because the reimbursement that would
be paid would be far less than what they would receive in an open
market. Medicare regulates
the prices and this would decrease their profits.
Employed with a home health care
agency and home infusion company, a Director of Pharmacy was describing
how much influence many pharmaceutical companies had in establishing
their prices and prohibiting competition.
“The prices are initially high to recoup the costs of research
and development, but after a certain time period, the profit begins to
soar.” This is
interesting, knowing that you and other taxpayers help finance a
pharmaceutical’s innovation, but you are still required to pay their
high drug costs. In the
1980s, when the United States was competing with Japan for innovative
products, the government was willing to give money to these new products
and many drug companies have taken advantage of this giving.
There are ways to limit your liability
on pharmaceuticals. Just as
office visits, surgeries, laboratory services and radiology all have
rates health plans negotiate, payments for medications can also be
negotiated using AWP (average wholesale price).
The Red Book is a publication, which provides the AWP for all
types of medications and injectables.
Many health plans will negotiate at percentage of AWP, such as
95% or 110% of AWP. If you
have a health plan that pays at AWP, compare the AWP with your cost of
the medication. The cost
should not exceed your payment, if it does, then you are probably either
paying too much for the drug or you should re-negotiate a
prescription/medication rate with your health plan.
The second way to reduce your drug costs is to purchase
medications in bulk or participating in a group purchasing arrangement.
Medications account for a significant share of the total costs of
a medical practice and it would be advantageous to review your prices,
payments and costs of these products.
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Medicare
HMO plans are affecting Seniors
This year seems to be one of record premium
increases with many health plans announcing premium increases of more
than 30%. These increases
are affecting Medicare beneficiaries who have opted for a private health
insurance plan. In these
situations, the Government pays the private health insurance company a
set dollar amount to cover the medical expenses of Medicare enrollees
who sign up for the private health insurance option.
These seniors enjoy the benefits of a private health plan with
prescription drug coverage and having their medical expenses paid at
100%, unlike the 80% that Medicare reimburses.
The unfortunate circumstance is that many health insurance
companies are terminating their agreements with the Government to no
longer accept Medicare enrollees because they claim they can no longer
afford it.
This situation is disappointing to many seniors
who face decisions on choosing where they will spend their fixed monthly
incomes, either on the expense for their prescription drugs or on
utilities and groceries. There
is the option of purchasing a Medicare supplemental plan that could
provide prescription drug benefits and cover the 20% that Medicare does
not pay for, but the coverage may be limited and the premiums may be
more than most could afford. These
two options may not be good enough as many seniors return to the
Medicare insurance program.
This is not to say that all plans are eliminating
their Medicare agreement. In
areas where the payment rates are high, such as large metropolitan
areas, many of the Medicare HMO plans are continuing.
But in those geographical regions where the Government payment
rate is low, such as in the Midwest, many health plans have terminated
their Medicare agreements. It
appears that almost 1,000,000 seniors will be affected by this change.
Currently, nearly 20% of the Medicare eligible members are
enrolled in HMO plans.
Prescription drug coverage is a hot topic in the
Presidential Arena. Both
sides differ on how this coverage will be provided to Medicare
beneficiaries, on whether to expand the Medicare insurance program or to
provide subsidies to private health plans to offer drug coverage.
But, whichever candidate is chosen and whichever plan is
presented, the key is, that something is likely to occur and some form
of help may be on the way. back to
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Health Symphony provides
information as a general resource and does not guarantee, expressed or
implied, to any results obtained from its use.
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