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What's next for Medicare?

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The deal President Barack Obama, Republican and Democratic lawmakers reached to reopen the federal government and raise the debt ceiling includes a bipartisan panel charged with producing a long-term budget agreement. And since Medicare currently accounts for 16 percent of the federal budget, according to Kaiser Health News -- a share that will grow as more people ge into the program -- expect changes ahead.

KHN reports that these changes in particular are likely to be considered by the 29-member panel led by Senate Budget Committee Chairman Patty Murray, D-Wash., and House Budget Committee Chairman Paul Ryan, R-Wisc.: 

"Wealthier Beneficiaries Pay More for Medicare: Many Republicans – including Ryan -- and Democrats support this. While most beneficiaries now pay 25 percent of Part B premiums, higher-income beneficiaries pay between 35 to 80 percent, depending on income.

"Medigap Changes: Both sides may also agree to discourage the use of “first-dollar” Medicare supplemental policies. The thought is that more generous Medigap plansencourage overuse of services, but seniors rely on these plans to shield them from unanticipated costs.

"Starting in 2017, the president’s budget plan would require new beneficiaries who purchase more generous Medigap plans to face a surcharge of approximately 15 percent of the average Medigap premium.

"Higher Beneficiary Cost Sharing: Obama’s plan includes a higher Part B deductible for those enrolling in 2017 and thereafter as well as a new copayment for home health services. Republicans may show interest as well.

"The administration says these changes would "strengthen program financing.” Seniors’ advocates say it's an additional cost to people already struggling on fixed incomes. In 2012, nearly half of Medicare beneficiaries had annual incomes below $22,500.

"Premium Support/Higher Eligibility Age: No bipartisan consensus here.   

"Provider Cuts: When Congress needs to reduce Medicare spending, it often lowers reimbursements to the hospitals and other providers that care for Medicare beneficiaries. Obama’s fiscal 2014 plan calls for additional Medicare cuts, including amounts paid to hospitals for “bad debt” and graduate medical education. Negotiators will also be looking for ways to avoid a scheduled 25 percent cut in Medicare physician payments scheduled for Jan. 1 unless Congress intervenes. This annual battle over the “doc fix” stems from a1997 payment formula lawmakers now agree is broken beyond repair.

"Drug Rebates: The biggest chunk of savings in the president’s budget -- $123 billionover a decade – will probably never survive the discussions. The proposal would alter drug costs for approximately 11 million low-income Medicare beneficiaries, about 9 million of whom are known as “dual eligibles” because they qualify for both Medicare and Medicaid.

"Duals used to get drug coverage from Medicaid, the shared federal-state health insurance program for the poor and disabled. And drug makers returned part of the cost of drugs for those beneficiaries to Medicaid as rebates, just they do now for current Medicaid beneficiaries.

"The administration's proposal would require drug makers to pay the difference between rebate levels they now provide to Part D plans and the Medicaid rebate levels. Read the story."

 

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