Wednesday, September 12, 2012

The Future of Medicare and Your Options

One of the most important debates for the upcoming Presidential election is centered around Medicare. Democrats and Republican maintain vastly different opinions on the best way to provide coverage to the Medicare eligible population.  Before you can begin to participate in this debate, it is essential to have an understanding of the current Medicare program. 

Do you know your A-B-C's?

The Wall Street Journal's Ellen Schultz, recently wrote an excellent article explaining the various Medicare options, including Parts A, B, C and D.  "A New Medicare Strategy" can be found at the link below.

As informative as the above article is, two critical areas were not addressed. Medicare providers who do not accept Medicare Assignment and Medicare providers who have opted out of the Medicare program.  If you already have provider relationships and want to continue to see them as a Medicare patient then you'll need to keep reading.

First, you should confirm whether or not your provider accepts Medicare Assignment.  When a provider accepts (Medicare) assignment, he agrees to accept, as payment in full, the amount the insurance company (Medicare) approves. The difference between the approved amount and the full charged amount must be written off.  You cannot and should not be charged for these differences.  Anytime a provider "balance bills" you for the difference between the approved and charged amounts, they are in violation of their contractual agreement with Medicare.  Do not pay these charges!  This scenario is mostly applicable to the traditional Medicare program, Part A and B.

If you are enrolled in the alternative to the traditional Medicare program, Part C, the Medicare Advantage option, then only certain providers participate in this restricted network. You should be aware of this trade-off, knowing that you are limiting your access to providers in exchange for what is usually a much less expensive alternative to the Medicare Part A and B and Medicare Supplement and Part D drug program.

So what happens if you visit providers who DO NOT accept Medicare Assignment?  This means they do not have to accept the Medicare approved amount as full payment.  They are allowed to charge 15% above the Medicare approved amount.  This additional 15% may not be covered by your Medicare supplement.  Most supplements will pick up the 20% left after Medicare pays 80% of the approved amount.  This 15% is in addition to the 20%. If your Medicare supplement does not cover the 15%, this will be an out of pocket cost for you. You will have to pay the remaining balance. It is important  for you to ask your provider if he does or does not accept Medicare assignment.

However, providers who no longer participate with or have opted out of the Medicare program present a different concern: They will not see Medicare patients!  If you wish to continue to see them, your claim will not be filed to Medicare; and therefore, you must pay your provider directly and pay whatever they may charge. You will not be reimbursed one penny through Medicare!  This is why it's paramount to ask your provider if he/she  participates with the Medicare program prior to services.  More than ever, physicians are opting out of the Medicare program. Physicians are concerned about lower reimbursement from the Medicare program.  However, by encouraging this opt out behavior, seniors will ultimately be prevented from seeing their physician of choice because of the additional out of pocket expense.

OK, so now that we understand how the system works what is the real difference the two plans set forth by the Democrats and the Republicans? And how do these affect you, the patient?

The Democrats continue to favor maintaining the present system of Medicare while the Republicans would require a voucher based system.

According to a Huffington Post article by Terry O'Neil "The Romney-Ryan plan claims this major Medicare overhaul would not go into effect until 2023, so that people 55 and over wouldn't be affected; but that's significantly misleading. Despite the delayed implementation, if this plan were to be enacted, along with repeal of Obama Care during a Romney-Ryan administration, out-of-pocket costs for all people on Medicare would start going up almost immediately."


The privatization of the present Medicare program that Republicans advocate would lead to higher costs for individuals across the board. Their proposed voucher system would make Medicare individuals purchase an insurance plan from the voucher they receive from the Government.  The amount of the voucher used for health insurance would not come close to purchasing a plan that is as good as their present traditional Medicare program.  If the individual wants a better plan, it would be an out of pocket expense to move up the line for better coverage.  Thus, health care costs for Medicare patients would be greater for the same benefits and coverage enjoyed under the present Medicare program.

The Democrats' plan is not a do nothing approach as some of have claimed.  For one thing, the Affordable Care Act would continue to close the gap in the doughnut hole under Part D Medicare.  The repeal of the Affordable Care Act under the Republicans would potentially do away with key features that presently eliminate  pre-existing conditions and lifetime maximums.

The reason the Democrats feel so strongly about government intervention into healthcare is because the insurance industry, to-date, has not been able to efficiently manage medical costs in the "free" marketplace environment. While the health care business is very much a business, it does not operate like a typical one. In part, because health care becomes a necessity and not a luxury to those in need of it. Except, the Republicans believe health care should be treated as a luxury item...just like a flat screen TV or fancy new car. This is the basis for their entire argument. 

The main reason Obama and Democrats fought so hard for the passage of the Affordable Care Act is because they maintain healthcare is a moral issue and should be a fundamental American right, protected by the government, and not simply an item or service exchanged in a free market and viewed as a privilege.

The proposed changes to the present Medicare program will have significant implications for patients in terms of accessibility to their providers and the charges for which they will be billed.  If you're rich you probably don't have much to worry about, but if you're on a limited budget like 99% of us then you should be concerned.

In the end, you must be your own best advocate in developing an understanding of the options available to you and the cost implications. And recognize the moral issues each party favors.

Stay informed. Stay positive. Stay healthy.
-  The Patient's Advocate