New Medicare law introduced
How would you react if after every year you were faced with your income receiving a cut because you performed specific tasks? This is exactly the same situation in which doctors treating Medicare patients have been living in since the years of Clinton.
However congress has now decided to put an end to this game and did so only moments before doctors would have to face a 21% cut in their incomes due to providing service to Medicare beneficiaries.
The new law which has been devised has gotten rid of this annual cut and has replaced it with a more modern physician pay increase for the upcoming 5 years. This decision is part of the health reform law passed by President Obama which aims to steer medicine away from the fee for service model which awards and gives greater consideration to the quantity of the care to the patient oriented approach which is geared more towards providing quality care.
While this is something which Medicare physicians throughout the nation applauded and were happy regarding, the financial burden of having to pay these doctors is likely to fall on the Medicare recipients only. It is also possible that this is what could lead the basic of the primary Medicare decisions to be altered; patients would have to decide whether or not to stick to the traditional Medicare or to opt for the Medicare Advantage managed care option.
Those who are likely to feel this sting first are the 2% of those wealthy beneficiaries of Medicare who have incomes which exceed $133,500 only for individuals whereas the amount is higher for couples. These individuals will find their Medicare premium to increase by 2018. Higher income seniors who are paying a high Medicare rate already which is between 50-65% of the total premium cost depending upon their income will also see their share rise by almost 15%.
Beginning in 2020, the private Medicare supplements which are known as the Medigap policies which normally cover deductibles and copayments by Medicare will also no longer be allowed to cover part B of Medicare for new beneficiaries; this is currently at $147 a year. This change will not affect any current enrollees of Medigap or those who purchase Medigap supplements till 2020 or even those having first dollar Medicare and coverage from an employer.
Standard premiums within part B which include the coverage for doctor visits and associated care will also experience a rise.
The question then is whether or not such changes will cause impacts on plan costs? Some predict that this will cause people to move away from the traditional Medicare plan to the Medicare advantage plan. This is because the advantage plan doesn’t allow selling policyholders Medigap; the plans have lesser premiums than its counterpart and are also allowed to include deductibles and co-pays for visits to the hospital and physicians along with prescription drugs. This allows them to offer beneficiaries a range of plans which consist of predictable cost sharing. Furthermore, the Kaiser Family Foundation has stated that 30% of present enrollees of Medicare have the Medicare advantage plan and this enrollment has increased 3 times since 2004.