The Washington Extension

November 4, 2011

Medicare News

Part B premiums will rise from $96.40 to $99.90 per month for 2012, significantly less than projected, but the first increase for most Medicare beneficiaries since 2008. Medicare law prevents Part B premiums from rising in years with no Social Security cost-of-living adjustment, for most seniors. This has been the case for the past three years due to the sluggish economy. Although HHS initially projected a larger in Part B premium increase, lower-than-expected medical utilization has kept costs down.

Quality ratings for Medicare Part D prescription drug plans are changing this year, as HHS incorporates criteria to stress clinical outcomes. In addition to measuring the length of hold time on phone calls, the quality scores will also reflect whether patients with various chronic conditions take their medications. For 2012, 24% of plans have four or five stars; about half have three stars; and 28% have only one or two stars. The Centers for Medicare and Medicaid Services recently proposed to expel Part D plans that score below three stars (out of five) for three consecutive years.

ACA Updates

The Kaiser Family Foundation released a new monthly tracking poll, showing higher rates of dissatisfaction with the Affordable Care Act (ACA), especially among Democrats. Although public opinion has shifted over time, this is the widest margin between people who have a favorable view (34%) and those with an unfavorable view (51%). A growing share of respondents (44%) also expects that the law will have no impact on their lives.

Ezra Klein summarizes health insurance exchange progress in terms of gubernatorial executive action, despite legislative stalemates or outright opposition. After exchange implementation action failed in more than a dozen state legislatures, five states’ governors are taking action on their own, with even more pursuing grant money from the Federal government despite legislative opposition. The National Conference of State Legislatures tracks exchange implementation action across the country.

On the Hill

Capitol Hill is dominated by Supercommittee stalemate, with little to no agreement on a path forward and less than three weeks until mandatory and automatic across-the-board spending cuts take effect. Medicare reform proposals will be instrumental in reaching a $4 trillion deficit reduction goal, but disagreements abound as members consider policies both large and small.

Reports/Other News

Reuters reports on the growing number of employers using “sticks”, with or instead of “carrots”, to incentivize healthier lifestyles among their employees. Many employers initially offered free weight loss or tobacco cessation programs; however, few employees participated. Employers are now turning to penalties in the form of premium increases, sometimes coupled with free programs to improve health. Most recently, Wal-Mart announced it would require smokers to pay an extra $260-$2,340 per year for health care coverage, but continue to offer free smoking cessation programs. A Thomson Reuters/NPR poll recently found that 85% of respondents believe individuals with healthy behavior should pay lower premiums; 59% say smokers should pay more for health insurance; and 31% say overweight or obese people should pay more than normal weight individuals.

As consumers become responsible for more out-of-pocket health care costs, the Government Accountability Office (GAO) found a challenging environment for consumers trying to compare providers’ prices. This is due to the difficulty in predicting health care services ahead of time, myriad insurance benefit structures, billing from multiple providers, and contractual obligations that prohibit sharing of negotiated billing rates. The agency reviewed various price transparency initiatives, and found that two insurers worried that consumers might associate high prices with better quality. Generally, the price transparency initiatives—offered by states, insurers and providers—struggled to provide price estimates that truly reflected what consumers would pay out-of-pocket.

Visit Extend Health — the nation’s largest private Medicare exchange.

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