Medicare threatened

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Health-care bill or no, Medicare Advantage premiums will rise

WASHINGTON -- In Miami next year, seniors once again won't have to pay any monthly premiums for a Medicare health plan sold by HMO giant Humana Inc.

Meanwhile, in Philadelphia, seniors will pay premiums of $52 up from zero for the least expensive HMO plan from Independence Blue Cross.

The new information underscores the drastic differences in how federal funding cuts next year to the private Medicare health plans known as Medicare Advantage will affect seniors, depending on where they live.

A bipartisan way to cut Medicare costs

Medicare is the federal health insurance plan that covers persons age 65 and over. The plan is primarily tax financed, but beneficiaries pay premiums, co-pays and deductibles. Some have private insurance that covers out-of-pocket costs. Medicare also insures persons who are permanently disabled and those with end-stage renal disease, regardless of age. Medicare pays private doctors and hospitals for the care of 45 million Americans.

The cost of Medicare has risen rapidly since 1965 as new technology has been developed, resulting in improved health for beneficiaries. The rate of cost growth in Medicare has been less than that for private health insurance, but projected costs are unsustainable and will contribute greatly to future deficits if nothing is done.

Medicare is expensive because of the people it covers: very ill disabled persons and the elderly. Medicare pays for the health care of 8 in 10 Americans who die each year. Costs are extremely high just before death, and our health-care system is set

GOP attacks plans for Medicare cuts

Democrats are pushing for Medicare cuts on a scale not seen in years to underwrite health care for all. Many seniors now covered under the program don't like that one bit.

Seeing a political opportunity, Republicans have accused President Barack Obama of trying to use Medicare as a piggy bank to finance his top domestic priority -- putting the president on the defensive on a highly sensitive issue.

At an AARP town hall meeting earlier this week, Obama went out of his way to address "a misperception" that the Democratic bills in Congress would cut medical benefits for the elderly.

Medicare+Choice = insurance boon

The latest argument against the Baucus bill, and health-care reform generally, is that it is illegitimate to finance insurance subsidies for the uninsured via reductions in the amount of money that will go to Medicare if no change is enacted. The flashpoint of this discussion is the proposed reduction in payments by Medicare to private insurance companies under Medicare Advantage.

Medicare Advantage is the latest reincarnation of an experiment started in the 1970s in which elderly individuals were allowed to enroll in private insurance (mostly HMOs), with Medicare paying their premiums. The original goal of this policy was to save the Medicare program money, but such savings never materialized.

Until 2006, the premiums paid by Medicare were based on how much Medicare spent caring for the average beneficiary in a given county. In the 1980s and 1990s, Medicare paid insurance companies 95 percent of this county-based average as a premium.

Scrutiny pays on health plans

Beware of stickiness - the tendency to stick with what you've got regardless of the benefits of change.

So goes the advice from experts on private Medicare health plans, called Medicare Advantage, and prescription drug coverage, or Medicare Part D. Many plans make annual changes in what is covered and how much it costs, with savings of hundreds or thousands of dollars available for many who take the time to explore alternatives.

"The word is stickiness; that's people who don't do anything, they just stay," says Gina Upchurch, director of Senior PharmAssist, a Durham nonprofit agency that helps people with prescription drug plans.