Friday, May 27, 2011


Top 5 States for Medicare Advantage Enrollment as of April 2011
The top five states for Medicare Advantage enrollment as of April 2011, which account for 43% of total MA enrollment, are as follows:
  • California - 1,750,525
  • Florida - 1,087,044
  • New York - 934,543
  • Pennsylvania - 878,185
  • Ohio - 647,603
There are eleven states and territories with over a one-third penetration rate (compared to the national overall rate of 25.6%):
  • Puerto Rico - 68.4%
  • Minnesota - 44.6%
  • Hawaii - 42.7%
  • Oregon - 41.1%
  • Pennsylvania - 38.3%
  • Arizona - 37.1%
  • California - 36.3%
  • Rhode Island - 34.9%
  • Utah - 34.6%
  • Colorado - 33.9%
  • Ohio- 33.9%
Source: Medicare Advantage State/County Penetration Report- April 2011, CMS.

CMS Announces Financial Resources, Flexibility to Help Providers Use Health IT Systems

FOR IMMEDIATE RELEASE                       Contact: CMS Office Media Affairs
May 26, 2011                                                                           (202) 690-6145

CMS Announces Financial Resources, Flexibility to Help Providers Use Health IT Systems First Medicare Electronic Health Records (EHR) Incentive Payments Total $75 Million; Providers Offered Flexibility in Adopting E-Prescribing

The Centers for Medicare & Medicaid Services (CMS) announced two steps that will help modernize America’s health care delivery system by encouraging doctors, hospitals, and other health care providers to adopt and meaningfully use health information technology.  Under the American Recovery and Reinvestment Act, providers are receiving incentive payments through both the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs for the meaningful use of certified EHR technology.  The proposed rule for the Electronic Prescribing Incentive Program released today would give more flexibility to providers who are adopting electronic prescribing systems. 

 “We can bring America’s health care system into the 21st century by adopting electronic health records and using electronic prescribing systems,” said CMS Administrator Donald M. Berwick, MD. “Today’s announcements are steps on the right path – toward the health IT system America needs, which will save lives, save money, and save time.”

These two programs give providers new options and incentives to use health IT to improve care for their patients, which can improve patient health and lower costs. 

  • On May 19, 2011, the Medicare EHR Incentive Program issued the first round of payments totaling $75 million to providers who signed up in the first two weeks of the program. 

  • Medicaid EHR Incentive Programs are being implemented on a State by State basis.  Since January 2011, fifteen States have initiated their Medicaid EHR Incentive Programs and to date, over $83 million in incentive payments has been made to qualified Medicaid providers.

“Through the EHR incentive programs, we are helping eligible providers invest in their technology infrastructure,” said Farzad Mostashari, MD, ScM., National Coordinator for Health Information Technology.  “But this isn’t just about technology. The goal is better and safer health care, and that means it’s about patients — about their health care and protection of their information.”

  • The Electronic Prescribing Incentive Program today announced proposals for new flexibilities to help providers phase in the use of electronic prescription technology.  This program provides financial incentives, including payment adjustments beginning January 1, 2012, for eligible providers to encourage electronic prescribing.  The proposals announced today would provide exemptions from the payment adjustment for providers who plan to participate in the program but who face certain barriers to using electronic prescribing systems or meeting program requirements that may be beyond their control.

“Today’s rule demonstrates that CMS is willing to work cooperatively with the medical professional community to encourage, participation in electronic prescribing,” said Patrick Conway, MD, MSc, CMS Chief Medical Officer and Director of the CMS Office of Clinical Standards and Quality.  “These proposed changes will continue to encourage adoption of electronic prescribing while acknowledging circumstances that may keep health professionals from realizing the full potential of these systems right away.”

These efforts are part of a broader effort by the Obama Administration to improve care and lower costs, including through new initiatives established by the Health Information Technology Economic and Clinical Health Act (HITECH), part of the American Recovery and Reinvestment Act of 2009.  Other HITECH initiatives have helped train workers to support the adoption and meaningful use of EHRs, and provide advice and technical assistance to providers as they switch to EHRs.  For more information about progress under the HITECH act to date, visit

For more information:
For detailed fact sheets on both the e-prescribing proposed rule and the EHR incentive payments, please visit:


Early Returns on the Affordable Care Act’s Closure of the Coverage Gap Demonstrate Program’s Success

According to the Centers for Medicare & Medicaid Services (CMS), 271,000 people with Medicare have already used the Part D coverage gap discount established by the Affordable Care Act (ACA). On average, individuals saved $613, resulting in $166 million in total drug savings so far. Those living in Florida and Texas saved nearly $30 million combined. The ACA phases out the Medicare prescription drug coverage gap, also known as “the doughnut hole.” While in the doughnut hole, people with Medicare must pay out of pocket for the full cost of their drugs. This year, Medicare consumers receive a fifty percent discount on brand name drugs and a seven percent discount on generic drugs when they enter the coverage gap. The amount of the discount will steadily increase over the next ten years until 2020 when the coverage gap is completely eliminated. At that time, individuals with Medicare will be responsible for the standard 25 percent cost-sharing for both brand name and generic drugs.

There are several other ACA provisions that take effect in 2011 that reduce out of pocket costs for people with Medicare. Beginning back in January, Medicare no longer charges cost-sharing for certain preventive benefits for qualified individuals including diabetes screening, mammograms, and smoking cessation. Also, Medicare will now cover an annual Wellness Visit during which patients and doctors can determine care plans aimed to help prevent conditions that put patients’ health at risk. 

Senate votes down House Budget Resolution


Yesterday, the United States Senate rejected the House budget resolution that would turn Medicare into a voucher program, block grant Medicaid and repeal the Affordable Care Act(ACA). The House budget resolution, introduced by Congressman Paul Ryan, Chairman of the House Budget Committee, replaces Medicare, for those under 55, with a “voucher” system, also known as a “premium support,” that supplies individuals with a fixed amount of money to purchase insurance through private companies. However, the voucher amount would not be enough to purchase coverage as good as what is currently provided under Medicare. The Congressional Budget Office (CBO) estimates that this would double out of pocket costs for people with Medicare and that the voucher’s value would diminish over time because it would not keep pace with the rate of growth of healthcare costs overall, which is a major driving force of Medicare spending.  

While Medicare has garnered much of the attention in the debate, the vote last night also symbolized a major victory for Medicaid, which supplements Medicare for many older Americans and people with disabilities.   Currently, the federal government provides ongoing financial support to state Medicaid programs, setting minimum standards of eligibility and guaranteeing coverage for all those who are eligible. Under the House budget resolution, the government would only provide a capped amount to states (a block grant), and states would determine eligibility and coverage rules. The resolution would result in reductions in Medicaid coverage and more restrictive eligibility rules, meaning optional coverage categories and programs, many of which people with Medicare rely on, would be cut. The vote to defeat block grants in the Senate is one that aligns to public opinion, according to the Kaiser Family Foundation May tracking poll. Sixty percent of those polled supported keeping Medicaid as it now stands with only 35 percent stating that they support a block grant type of program. 
However, while yesterday’s Senate vote on the House budget resolution is important for Medicare and Medicaid, it represents only one in what will likely be a series of votes that may have adverse implications on the programs and the people the programs serve. Medicare and Medicaid still face significant cuts through other proposals that could surface in Congress again in the near and long term and result in Medicare vouchers or Medicaid block grants

Seniors Try to Shop for Care

Published 5/26/2011 

Many older U.S. residents ask about the cost of medical care, but few try to ask for discounts.
Extend Health Inc., San Mateo, Calif., a Medicare plan exchange operator, commissioned a survey of 377 adults ages 65 and older.
About 41% of the survey participants said they try to estimate the out-of-pocket cost of their medical care at least some of the time; about 39% of those participants believe they come up with an accurate estimate most or all of the time.
But 22% rarely or never come up with an accurate estimate, and 48% said they rarely or never ask providers how much a medical service will cost. Only 25% ask about the cost of medical services most or all of the time.
Just 13% said they have tried to negotiate for a lower price for a medical service; 87% have never tried to negotiate with providers.
- Allison Bell

Monday, May 23, 2011

Banking on Medi-Scare

With the 2012 election approaching, you wouldn’t expect to hear one of Washington’s savviest Democratic strategists praise Rep. Paul Ryan, R-Wisc., for his budget plan on Medicare.
“Any time you hand your opponent a club, knowing full well he is going to beat you over the head with it for 18 long months, that is courageous,” the strategist says.
Democrats’ 2012 slogan will be that Ryan – and everyone else with “Republican” attached to their names – is taking Medicare from seniors.
Health and Human Services Secretary Kathleen Sebelius began late last week, saying that Ryan’s proposal will lead to early deaths among seniors.
One Republican strategist says his party can’t allow Democrats to “get away with the fundamental dishonesty” of frightening “every senior on Medicare today” because “they know darned well the program will remain unchanged for anyone 55 or older.”
Yet “Medi-scare” is a strategy that worked for Democrats before. Will it work again?
“It has to,” explains the Democratic strategist. “To win back the House, maintain the Senate and re-elect the president, Democrats have to win back the senior vote, split the independent voters, and get Obama to leverage minorities and the youth again.”
It all rests on the “Medi-scare” message.
“Seniors are upset with what they are hearing from the GOP,” said Chris Kelley, a political science professor at Miami University of Ohio. “That will help Obama as he paints the GOP as willing to throw grandpa under the train, as well as forcing people to work late in their lives.”
Yet there is a problem for Democrats: If they don't have a serious deficit-reduction plan in the next six to 12 months, our debt will be downgraded, unemployment will soar and the president will lose re-election.
Expect a battle within the Obama administration, between those political advisers inclined to demagogue Republicans on spending cuts and those pragmatists and economists who want a deficit-reduction deal that includes entitlement cuts and spending increases, according to Robert Maranto, a University of Arkansas political scientist.
“If the pragmatists and economists win, the president will get a serious deficit-reduction plan through Congress, the economy will improve and Barack Obama will be a two-termer,” Maranto predicts.
If not, then no deficit deal will occur, the economy will tank and the president will lose – unless Republicans nominate a whackadoodle.
Americans live and vote largely in real time, over what affects them at the moment.
At this moment, Democrats are losing over high gas prices and home foreclosures, a depressed real estate market, high unemployment, and declining wages and incomes.
The midterm election of 2010 proved that voters don’t buy the Democrats’ line that it’s all George Bush’s fault. While voters still don’t trust Republicans, they trust Democrats even less.
“The Ryan plan is manna from heaven for the Democrats,” said Bert Rockman, a political science professor at Indiana’s Purdue University, “except … that nobody knows what the Ryan plan is.”
Not much probably can be done about the deficit until after 2012.
The problem is, people like federal benefits; they just don’t want to pay for them. Politicians and labor unions have done a spectacular job of convincing us that we’re entitled to those expensive benefits.
Our governmental structure makes it extremely difficult to make tough decisions. And the two-party system, polarized as it is, makes it very difficult to come to agreement.
“So we have a better chance, ultimately, of looking like Greece than Germany,” said Rockman, “and that’s not a happy thought.”
Democrats have heavy arithmetic against them, from House reapportionment to their disproportionate share of Senate seats up for election in 2012.
Rockman thinks 2012 could be another 2000: “My most likely scenario for 2012, from the perspective of a year-and-a-half out, is that the Democrats eat into some of the Republican margin in the House – maybe 15 to 20 seats; the Republicans narrowly take over the Senate; and President Barack Obama scrapes by on … the weakness of the Republican candidate.”
Last week, first-time unemployment claims rose and the housing market dipped back to March 2009 numbers. Inflation concerns heighten daily, driven by gas and food prices.
It’s hard to push feel-good rhetoric unless people feel good.
Right now, they don’t – and for good reason.
Salena Zito is a political analyst, reporter and columnist.

Aetna Completes Note Offering


Friday, May 20, 2011

Medicare Trustees: Don’t Believe Our Numbers

Published 5/13/2011 
The trustees of the Medicare trust funds say the financial projections in their latest annual report are probably unrealistic.
The Medicare trustees released one report today, and the Social Security trust fund trustees issued a separate report.
The current Medicare boards of trustees are dominated by Obama administration officials such as U.S. Treasury Secretary Timothy Geithner, U.S. Labor Secretary Hilda Solis, and U.S. Health and Human Services Secretary Kathleen Sebelius.
The trustees say the Patient Protection and Affordable Care Act of 2010 (PPACA) has strengthened the finances of the Medicare hospital insurance (HI) and supplementary medical insurance trust funds.
But, despite those changes, “the HI trust fund is now estimated to be exhausted in 2024, five years earlier than was shown in last year’s report, and the fund is not adequately financed over the next 10 years,” the trustees warn in the Medicare trustees’ report. “The HI trust fund has not met the trustees’ formal test of short-range financial adequacy since 2003.”
But the trustees concede in the introduction to the report that the finances of the trust fund are looking better partly because the law required the analysts who made the projections used in the report to assume that pending changes in Medicare physician payment rules will take effect on schedule in 2012.
There is a “virtual certainty that Congress will override this reduction,” the trustees say.
The trustees have added alternative illustrations showing what might happen if Congress keeps overriding the physician fee reductions.

Elsewhere in the report, the trustees talk about the future of the Medicare Advantage program, which gives private companies an opportunity to provide Medicare coverage.

If current laws take effect as written and work as expected, the share of all Medicare plan enrollees who are in Medicare Advantage plans likely will fall to about 15% in 2020, from 25% in 2010, the trustees say.

Although Medicare Advantage plans’ share of enrollees may drop, the number of people they cover may start to rise in 2020 because of an increase in the total number of people eligible for Medicare, the trustees say.

In related news, the Social Security trustees say that program will exhaust its funds in 2036.

A year ago, the trustees were predicting that the funds would run dry in 2037.

When the funds are empty, there should be enough tax revenue coming in to pay about 77% of the benefits, the trustees estimate.

The funds need to bring in an extra $6.5 trillion over the next 75 years to cover the gap, the trustees say.

LTC Insurance Keeps Some in Homes

Published 5/13/2011 

Private long term care (LTC) insurance helps insureds with moderate disabilities stay in their homes longer and does not appear to crowd out informal caregiving.
Yong Li, a researcher at Competitive Health Analytics Inc., Humana Inc., Louisville, Ky. (NYSE:HUM), and Gail Jensen, a gerontology and economics professor at Wayne State University, have come to that conclusion in a paper published in Inquiry, an academic journal that focuses on health care organization and finance issues.
The researchers analyzed the effects of private LTC insurance on use of LTC services by analyzing survey data from 2002 to 2008 from the University of Michigan’s Health and Retirement Study
Up till now, few other researchers have conducted formal studies on that topic, Li and Jensen report.
One advantage of using the Health and Retirement Study data is that the researchers in charge of that project use follow-up question to identify survey participants who believe they have LTC insurance but do not actually have it: Li and Jensen say confused consumers make typical LTC insurance penetration figures about 50% higher than they ought to be.
Owning private LTC insurance does appear to increase that insureds who are unable to perform two more activities of daily living (ADLs) will enter a nursing home, the researchers say.

Having LTC coverage appears to increase likelihood that those seriously disabled insured will enter a nursing home by 17% to 39%, the researchers say.

But having LTC insurance seems to have a statistically insignificant effect on the use of informal care from friends, neighbors and relatives, the researchers say.

The researchers say the same is true of home care.

In the past, some LTC insurance market watchers have suggested that relatively healthy older LTC insurance insureds might view tapping home care benefits as a way to pay for maid service.

But LTC policy insureds did not seem to be any more likely to use home care than other, similar survey participants with a moderate level of disability, and the researchers add that they found know evidence of antiselection.

After accounting for variables such as income, education level and access to adult children, LTC insurance holders seemed to be no more likely to use home care than comparable consumers without LTC coverage, the researchers say.

Can Any Willing Pharmacy Really Participate in Part D Program?

By Barbra Golub - May 13, 2011
American Pharmacies, a member-owned independent pharmacy cooperative operating in Texas, Arkansas, Louisiana, Oklahoma, New Mexico, Missouri, Mississippi and Tennessee, has asked CMS to rescind regulations allowing preferred pharmacy networks in stand-alone Prescription Drug Plans (PDPs). According to the cooperative, these regulations allow Part D plans “to discriminate among pharmacies” and create “different classes of in-network pharmacies.” For example, the Humana-Walmart Preferred Rx plan “improperly provides strong financial incentives for patients to choose Walmart-owned pharmacies over other of the plan’s in-network retail pharmacies,” it asserted.
The group also contended in a letter to the agency that the plan runs contrary to the “any willing pharmacy” provision of the Part D regulations, allowing participation of any pharmacy that meets the terms and conditions of the Part D plan. Under the Humana-Walmart plan, beneficiaries pay more for prescriptions purchased at a pharmacy other than Walmart.
This is not the first time this plan has come under fire. Last year the National Community Pharmacists Association (NCPA) complained to CMS that the agency should not have approved the plan because it “violates the spirit and intent of the rules and regulations surrounding the Part D program” and specifically Part D marketing guidelines. It appeared, based on NCPA comments, that the association had concerns with some of the larger Part D plans that it sees taking up a huge market share and hurting community pharmacies.
Is this just concern on the part of American Pharmacies that their members will lose business, or do they have a valid complaint?

Today's Datapoint

Annuity Sales Keep Rising

·         By ALLISON BELL
Published 5/18/2011 

Total U.S. individual annuity sales climbed to $60 billion during the first quarter, up 16% from the total for the first quarter of 2010, according to LIMRA.

LIMRA, Windsor, Conn., says the 59 insurers that participated in its first-quarter annuity sales survey said sales of variable annuities increased 24%, to $40 billion.

Sales of fixed annuities increased 5%, to $20 billion, and sales of indexed annuities increased 1%, to $7.1 billion, LIMRA says.

Another annuity market tracker,, Pleasant Hill, Iowa, agrees that indexed annuity sales totaled $7.1 billion in the first quarter, but it says that amount represents an increase of 5% from the total for the comparable period in 2010.

Variable annuity sales “benefited from the positive equity market trend and consumers putting money back into the market,” says Joseph Montminy, a LIMRA annuity specialist.

Fixed annuity sales benefited from strong demand for fixed-rate deferred products and for book value annuities, LIMRA says.

Sheryl Moore, president of, says indexed annuity sellers are struggling with the effects of low interest rates.

Although growth in sales of indexed annuities has cooled, sales of indexed life insurance increased to $203 million in the first quarter, up 42% from the total for the first quarter of 2010, Moore says.

From Medicare Watch, by

Streamlining Transitions to Medicaid for Medicare-Eligible Individuals
Beginning in 2014, the Affordable Care Act (ACA) expands Medicaid coverage to populations that traditionally have not been eligible, and expands coverage for those who are not eligible for Medicare if they have incomes up to 138 percent of the Federal Poverty Level (FPL). In addition, the ACA eliminates the consideration of assets from eligibility determinations and applies a universal Modified Gross Adjusted Income (MAGI) calculation to determine eligibility. The ACA also streamlines enrollment for these individuals, eliminating documentation requirements to prove income and allowing states to match information provided on applications with tax information at the IRS. The ACA envisions an electronic application portal through which individuals may be determined eligible for Medicaid in real time. Together these changes will vastly improve the application, determination and enrollment processes for Medicaid and ensure individuals receive benefits and health coverage in a timely manner.

However, these improvements may not apply to individuals once they become Medicare-eligible. For this reason, the Medicare Rights Center is working to ensure that people with Medicare receive the same benefits of streamlined enrollment in low-income programs. Specifically, Medicare Rights is working in New York and other states to encourage those in charge of establishing new protocols and designing modern enrollment systems to include the Medicare population in these improvements. Although not required to do so by the ACA, states can change application and eligibility rules for Medicaid for people with Medicare to better align them with those that will be applied to the non-Medicare population. As part of this effort, this week Medicare Rights provided testimony at a New York State Insurance Department public forum on the health insurance exchange. The testimony called for the state, in building modern enrollment systems in anticipation of 2014, to include the Medicare population in such systems. This will help prevent people with Medicare from being left behind in current determination and enrollment systems that use outdated technology and lead to bureaucratic disentitlements, and it will prevent gaps in coverage that could occur as a result of the transition from Medicaid to Medicare and Medicaid.  

CMS Sticks with 10% Rate Review Trigger

Published 5/19/2011 
The Centers for Medicare and Medicaid Services (CMS) plans to use a 10% cut-off to decide whether to look more closely at individual and small group health insurance rate hikes in states.
The 10% threshold will apply both in states where CMS handles rate reviews and in states that do the reviews themselves, officials say.
CMS, an arm of the U.S. Department of Health and Human Services (HHS), will begin to apply the review program rules Sept. 1.
Starting Sept. 1, 2012, each state will get its own review threshold, officials say.
CMS has described the rate review program regulations in an early version of the 94-page Rate Increase Disclosure and Review final rule.
The final rule, set to appear Monday in the Federal Register, will implement Section 1003 of the Patient Protection and Affordable Care Act of 2010 (PPACA).
PPACA Section 1003 requires HHS and the states to develop a process for conducting annual reviews of “unreasonable increases in premiums for health insurance coverage.”
HHS is encouraging states to conduct their own rate reviews. In states where regulators cannot or will not conduct reviews, an arm of CMS will conduct the reviews.
Originally, the rules were set to take effect July 1; CMS responded to pleas for relief from industry commenters by pushing the effective date back two months.
Many state regulators and insurance industry commenters also had asked CMS to reconsider using a 10% review threshold in every state. They suggested that the 10% threshold would lead to reviewers reviewing virtually all proposed rate increases in many states.
CMS declined to change cut-off.
PPACA Section 1003 gives CMS the authority to require justification and disclosure of proposed rate increases but no direct authority to block rate increases.
“However, if an issuer fails to comply with the requirements set forth in this final rule, CMS could seek a court order against the issuer to enforce compliance,” officials say in the preamble to the final rule.
Many insurance industry commenters had asked CMS to establish safe harbors or an expedited rate review procedure.
The commenters asked, for example, for a rate increase that seemed likely to satisfy the new federal minimum medical loss ratio requirements for individual and small group health insurance.
“We have not modified the final rule to provide safe harbors or expedited rate review procedures given that many factors are relevant in determining whether a particular proposed rate increase is unreasonable, thus supporting the need for a more detailed review process,” officials say.
Also in the preamble, CMS officials say:
  • The definition of the word “state” used in the rate review program regulations includes District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa and the Northern Mariana Islands.
  • A state that reviews rates itself and excludes short-term health insurance from its definition of “individual health insurance” can keep short-term health insurance out of the rate review program.
  • The rate review program will not affect grandfathered health insurance, retiree-only health plans or self-funded health plans.
CMS officials say they have not made up their mind about how to handle individual or small group coverage provided through associations.
CMS has included a list of questions aimed at commenters with an interest in the association health plan market.
CMS may grant confidential status for some information submitted to rate reviewers on a case-by-case basis.
Today, however, “based on a review of state filing guidelines and state websites, it appears at least 12 states do not redact any information when making rate filings available to the public,” officials say.
Karen Ignagni, president of America's Health Insurance Plans (AHIP), Washington, put out a statement suggesting that focusing solely on health insurance premiums while ignoring the underlying medical cost drivers will do nothing to make coverage more affordable.
"The public policy discussion needs to be enlarged to focus on the soaring cost of medical care that threatens our economic competitiveness, our public safety net, and the affordability of health care coverage," Ignagni says. “Health plans are doing their part to restrain health care cost growth by partnering with providers across the country to change payment models to promote and reward safe, high-quality, cost-effective care. 
“Premium review must adequately factor in all of the components that determine premium rates, including geographic variation, the cost of new benefit mandates, and the impact of younger and healthier people dropping coverage.  An arbitrary threshold for review will establish a de facto presumption of unreasonableness in what should be an objective, actuarially-based evaluation."
Any reviews that are conducted should be done at the state level, because state officials have the experience, infrastructure, and local market knowledge needed to ensure that consumers are protected and that health plans are solvent, Ignagni says.

Thursday, May 19, 2011

Medicare Trustees Release 2011 Report

If not for the Affordable Care Act (ACA), the Medicare Hospital Insurance (HI) Trust Fund would run a deficit eight years earlier than currently projected, according to the Social Security and Medicare Trustees report released last week. The report states that the HI Trust Fund is expected to become insolvent in 2024, five years earlier than projected in the 2010 report. This is largely the result of the economic downturn. The HI Trust Fund is funded through payroll taxes, and if fewer individuals are paying into the system, there will be less HI funds available. The trustees also stated that Medicare costs will continue to grow from about 3.6 percent of the economy in 2010 to about 5.6 percent in 2035. However, this growth rate is influenced by the growth of cost in the health care system overall in the United States. Many proposals that would cut Medicare by shifting extra costs to consumers would not address the underlying causes of Medicare cost growth or health care cost growth overall.

The report also addresses the financial health of Medicare Part B, which covers outpatient services such as doctor visits, and Medicare Part D, which provides coverage for prescription drugs. Because these parts of the program are funded through a combination of general revenues and premiums that are adjusted each year, they are for the most part self-sustaining and are projected to remain balanced, as they have been in past years.

Medicare trustees release annual reports to Congress on the status of the Medicare programs. Four of the six trustees are appointed by virtue of their position in government: the Secretary of the Treasury, Secretary of Labor, the Secretary of Health and Human Services, and the Commissioner of Social Security. The remaining two are public representatives appointed by the president.

Statement by Medicare Rights Center President Joe Baker on the Medicare Trustees Report.

Read the CMS press release and the 2011 Medicare Trustees Report.

Wednesday, May 18, 2011

Affordable Care Act gives providers new options to better coordinate health care

Centers for Medicare & Medicaid Services
Room 352-G
200 Independence Avenue, SW
Washington, DC 20201
Office of Media Affairs

Affordable Care Act gives providers new options to better coordinate health care
New Accountable Care Organization models will improve patient care, could save Medicare up to $430 million
The Centers for Medicare & Medicaid Services (CMS) today announced three Affordable Care Act initiatives designed to help put doctors, hospitals and other health care providers on the path to becoming Accountable Care Organizations (ACO) and improve health care for Americans with Medicare.
First, the Center for Medicare and Medicaid Innovation (Innovation Center) is requesting applications for a new Pioneer ACO Model, which provides a faster path for mature ACOs that have already begun coordinating care for patients and are ready to move forward.
Second, the Innovation Center is seeking comment on the idea of an Advance Payment Initiative that give certain ACOs participating in the Medicare Shared Savings Program access to their shared savings up front, helping them make the infrastructure and staff investments crucial to successfully coordinating and improving care for patients.
Finally, providers interested in learning more about how to coordinate patient care through ACOs can attend free new Accelerated Development Learning Sessions.  The Accelerated Development Learning Sessions will teach providers interested in becoming ACOs what steps they can take to improve care delivery and how to develop an action plan for moving toward providing better coordinated care.
Together with the Medicare Shared Savings Program, the initiatives announced today give providers a broad range of options and support that reflect the varying needs of providers in embarking on delivery system reforms. 
CMS issued a proposed rule to implement the Medicare Shared Savings Program in March 2011 and is continuing to encourage and accept comments from providers and the public that will help strengthen the final rule.
These initiatives are part of a broader effort by the Obama Administration, made possible by the Affordable Care Act, to improve care and lower costs.  For more information about all of these initiatives, visit the Innovation Center website.  
To read the CMS Press release issued today (5/17) click here:

Social Security Board of Trustees: Projected Trust Fund Exhaustion


News Release

Social Security Board of Trustees: Projected Trust Fund Exhaustion
One Year Sooner

The Social Security Board of Trustees today released its annual report on the financial health of the Social Security Trust Funds. The combined assets of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds will be exhausted in 2036, one year sooner than projected last year. The DI Trust Fund, while unchanged from last year, will be exhausted in 2018 and legislative action will be needed soon. At a minimum, a reallocation of the payroll tax rate between OASI and DI would be necessary, as was done in 1994. The Trustees also project that OASDI program costs will exceed non-interest income in 2011 and will remain higher throughout the remainder of the 75-year period.
In the 2011 Annual Report to Congress, the Trustees announced:
  • The projected point at which the combined Trust Funds will be exhausted comes in 2036 -- one year sooner than projected last year. At that time, there will be sufficient non-interest income coming in to pay about 77 percent of scheduled benefits.
  • The point at which non-interest income fell below program costs was 2010. Program costs are projected to exceed non-interest income throughout the remainder of the 75-year period.
  • The projected actuarial deficit over the 75-year long-range period is 2.22 percent of taxable payroll -- 0.30 percentage point larger than in last year’s report.
  • Over the 75-year period, the Trust Funds would require additional revenue equivalent to $6.5 trillion in present value dollars to pay all scheduled benefits.
“The current Trustees Report again reflects what we have long known to be true -- we need changes to ensure the long-term solvency of Social Security and to restore younger workers' confidence in the program,” said Michael J. Astrue, Commissioner of Social Security. “The report also highlights the more near-term shortfall in the Disability Insurance Trust Fund. Our disability programs are complex, and there is a long history of well intended ‘reforms’ causing unintended consequences. The President sent to Congress our Work Incentive Simplification Proposal, which would be a good start for bipartisan debate. I urge the House and Senate to review this proposed legislation carefully and schedule hearings this year.”
Other highlights of the Trustees Report include:
  • Income including interest to the combined OASDI Trust Funds amounted to $781 billion ($637 billion in net contributions, $24 billion from taxation of benefits, $117 billion in interest, and $2 billion in reimbursements from the General Fund of the Treasury) in 2010.
  • Total expenditures from the combined OASDI Trust Funds amounted to $713 billion in 2010.
  • The assets of the combined OASDI Trust Funds increased by $69 billion in 2010 to a total of $2.6 trillion.
  • During 2010, an estimated 157 million people had earnings covered by Social Security and paid payroll taxes.
  • Social Security paid benefits of $702 billion in calendar year 2010. There were about 54 million beneficiaries at the end of the calendar year.
  • The cost of $6.5 billion to administer the program in 2010 was a very low 0.9 percent of total expenditures.
  • The combined Trust Fund assets earned interest at an effective annual rate of 4.6 percent in 2010.
The Board of Trustees is comprised of six members. Four serve by virtue of their positions with the federal government: Timothy F. Geithner, Secretary of the Treasury and Managing Trustee; Michael J. Astrue, Commissioner of Social Security; Kathleen Sebelius, Secretary of Health and Human Services; and Hilda L. Solis, Secretary of Labor. The two public trustees are Charles P. Blahous, III and Robert D. Reischauer.
The 2011 Trustees Report will be posted at by Friday afternoon.