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Medicare Brochure to Seniors is Misleading

Starting this week, a one-time $250 tax free check will be mailed to all Medicare Part D drug plan members who’ve fallen into the coverage gap known as the “doughnut hole.”  In addition, next year, brand name drugs will cost 50% less for people in this situation with reductions in costs continuing until 2020 when both brand name and generic drug will cost these members just 75% of actual.  These are the first tangible benefits of the health care legislation for seniors.

Nevertheless, seniors are wary about the new health reform plans. An Associated Press-GfK poll conducted after the law was signed found 49 percent of seniors were strongly opposed, compared with 37 percent of those 64 and younger.  They’ve been told that $500 billion dollars is being taken out of Medicare, $136 billion out of Medicare Advantage, and $40 billion out of home health care to pay for the new plan and that’s got them worried.  To allay their fears, a brochure was sent recently to seniors from Kathleen Sebelius, Secretary of Health & Human Services titled: “Medicare and the New Health Care Law – What it Means for You” to address their concerns.

It begins by promising that the recently passed health care reform bill will provide seniors with greater savings and better health care.  However, Richard Foster, The Chief Actuary at the Center for Medicare and Medicaid Services (CMS) contradicts this when he says the new law’s Medicare payment cuts could end the participation of some providers and jeopardize the access of seniors to health care.

The brochure also promises Medicare Advantage members they’ll keep their Medicare benefits. The Wall Street Journal challenged this statement in an editorial dated May 28th labeling it dishonest.  Actually, it wasn’t dishonest, but it was misleading.  Here’s the deal:  Medicare Advantage is very popular with seniors.  One in four of them subscribe to it instead of Medicare and they’re very happy with it. For each person enrolled in a Medicare Advantage plan, Medicare pays a private health plan chosen by the member a set amount every month while the members make monthly payments to Medicare.  The private plans are required to offer a benefit “package” that is at least as good as Medicare’s and cover everything Medicare covers, but they do not have to cover every benefit in the same way.  As a result, they can offer dental and vision plans that Medicare doesn’t.

Clearly, if $136 billion is being taken out of Medicare Advantage, it means the participating private insurance providers are going to be paid less.  However, they’ve committed by law to providing benefits at least as good as Medicare’s so either they have to eliminate the extras or charge seniors more for what they’re getting now
Bottom line: their benefits can’t possibly stay the same and it’s the private insurers who will look like the bad guys.

Besides announcing the $250 payments, the brochure states that starting in 2011, Part B coverage will include free annual physicals and many preventive services like colorectal cancer screening and mammograms.   It then goes on to promise that if you’ve been  hospitalized the new legislation provides for a speedier recovery at home with additional services and support.  But there’s a ‘yes, but’ here as well.  The concern is how this can happen when $40 billion is being specifically taken out of home health care.

My guess is that this brochure and its promises for Medicare and Medicare Advantage will not convince seniors to check the ‘approve’ box on the next poll.  Seniors aren’t stupid.  $676  billion total being taken out of their health care plans and savings and new benefits coming in just doesn’t add up.

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