Medicare’s Sustainability and Disproportionate Impact on Women

In light of the recent election and the number of monumental decisions elected officials, government agencies, policymakers and health care providers have to make around health care reform, the Medicare program hasn’t been receiving much attention. However, given the sheer number of Americans covered by the program and the fiscal disaster looming for aging citizens, it is important to examine the state of the country’s care for the elderly and disabled.

In the United States, older women rely on the Medicare program disproportionality and significantly more than men. Not only do women make up more than half of the Medicare beneficiaries, they comprise about 70 percent of the oldest (over 85 years old) beneficiaries and are more likely to have multiple chronic conditions as they age. In 2010, the program, which is administered by the Centers for Medicare & Medicaid Services (CMS), covered 47 million elderly (age 65 and over) and disabled beneficiaries. Unfortunately for beneficiaries, the US Government Accountability Office (GAO) has designated Medicare a high-risk program due to its fiscally unsustainable path.

Because women have a greater likelihood of living longer than men, more health care conditions will accumulate and more health care costs accrue. This means that as women age increased cost sharing and out-of-pocket expenses directly impact them more. Therefore, given the importance of Medicare’s cost sharing with seniors, and its quickly dwindling resources, it is important to revisit how vital the program is to the elderly, especially older women.

Facts about older women on Medicare:

• In 2010, the average American woman over the age of 65 had an annual income of less than $15,072 (compared to male counterparts at $25,704)
• Women over the age of 80 made up 62% of all individuals with Medicare in 2010
• In 2011, older women paid an average of $115 for the Medicare Part B premium, plus deductibles that range from $162 to $1132 before their benefits kicked in
• In 2007, the average American women spent an estimated 18.7 percent of her income on out-of-pocket health care costs, with percentages increasing throughout the recession
• Nationally, 49% of women with Medicare report having three or more chronic conditions (compared to just 38% of men)
• Despite cost sharing measures, Medicare does not cover many common and costly health care needs such as eyeglasses, hearing aids and long-term care

Current approaches to prolonging the Medicare program include:

• Capping provider, hospital, devise and pharmaceutical reimbursement payments at 2012 levels
• Reducing Medicare reimbursement rates for health care providers to previous levels
• Raising the age of Medicare eligibility progressively from 65 to 67, or even higher, as people are living and working longer
• Replace Medicare as it currently functions with a Voucher system (also known as a Premium Support Model)
• Restructuring beneficiaries cost-sharing

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Why ObamaCare Surcharges Are Bogus

You may have seen in the news recently that the owners of several businesses or restaurant franchises, including Papa John’s, Denny’s, and Applebees, have announced that the Affordable Care Act has imposed new costs on their businesses, which they will be passing on to the consumer in the form of higher prices, and in some cases an explicit “ObamaCare surcharge.” Of course, it is totally within their rights to do so, just as it is the consumer’s right to decide whether to continue purchasing products from these companies. The problem is that these efforts are nothing more than a publicity stunt. I can’t do any better than Matthew Yglesias in describing why that is the case. So read his article here, and realize that I echo everything he writes in his piece. Then you decide. If Papa John’s wants to tack an extra dime onto the price of your pizza, is it worth it to you, knowing that that provides jobs and health insurance to low-wage employees? Or would you rather buy your pizza elsewhere, or go without altogether?

 

GOP Governors and the Health Insurance Exchanges

In conservative states, especially those with Republican governors, the pushback against implementation of the Affordable Care Act (ACA), perhaps better known as “ObamaCare,” has been quite notable. In fact, these were the states that joined with Florida in challenging the law before the Supreme Court. Unfortunately for them, they lost their case, at least for the most part. The Court did say that they don’t have to participate in the Medicaid expansion, and most of the GOP governors have declared that that is precisely the path they will take. On another issue, however, the federal government can act if the states do not.

The issue at hand is the establishing of the so-called “health insurance exchanges”–a marketplace for consumers to shop for health insurance coverage on the basis of more transparent premium cost and benefit design. The ACA was written to provide states with flexibility to design their exchanges within broad federal guidelines, with the assumption that state policymakers are more familiar with the specific needs of their state’s residents. This, in fact, is precisely the way that the Medicaid program operates.

However, unlike Medicaid, the ACA put in place a “stop-gap” measure. In the event that states failed to establish their own exchanges, the federal government would establish one for them. In other words, states can design their own exchanges however they would like, provided they meet federal guidelines with respect to minimal acceptable coverage and tiered plan levels. But, if a state says no, Uncle Sam says “Fine. We’ll do it ourselves.” And the state gets no say in the design of that exchange.

And therein lies the irony: Democratic governors in liberal states have gone ahead and established–or are in the process of establishing–their own, state-designed health insurance exchanges. They’ve been able to set up a system that will work best for their residents, and they have been in charge of the entire process. Meanwhile, the Republican governors in conservative states have been defiantly refusing to set up their own exchanges as best they see fit, which, in turn, is an open invitation for the federal government to impose its will on those states. That, of course, is the very thing that they opposed from the outset. You just can’t make this stuff up.

For more on this story, I recommend this article in Politico, as well as this one from USA Today.

 

Four More Years of Health Reform

While the last news I saw this morning before leaving the house still had Florida as “too close to call,” the outcome in that state has become irrelevant, with Obama securing enough votes in the electoral college (303 at last count) and claim another term as President of the United States. Importantly, Obama also won the popular vote by about 2.5 million votes. While the contest was close until the end, and our nation clearly remains divided, I am thankful that we do not find ourselves confronting the legitimacy question that can arise when the winner of the electoral college loses the popular vote. (Think Bush v. Gore.)

So, what awaits us in Obama’s second term? Well, I think it’s clear what needs to be done: More action needs to be taken to improve the nation’s economy. The Obama administration has made some gains in this area with the stimulus and the auto bailout, but there is more work to be done. For me, the question is: Will the Republicans in Congress work with him at all? For four years they’ve played obstructionist politics, with the goal, one would assume, of creating a one-term president and capturing the White House in 2012. That’s why none of them voted for the Affordable Care Act, why they refused to vote on the President’s jobs bill, and why they pushed our country to the brink of default by playing games with the debt ceiling. All of these things were done not because they were the best for our country, but because they were the worst for the President. And, in spite of that, Obama was able to prevail.

This morning, we now know that the Affordable Care Act, better known as “Obamacare,” will have the opportunity to be fully implemented in 2014. We know that tens of millions of Americans without health insurance will soon have affordable coverage. We know that there will soon be an option for individuals to shop for health insurance in a more transparent and competitive system of health insurance exchanges, with a government-sponsored option among the available choices. And we know that our nation’s elderly and disabled will continue to depend on Medicare, rather than facing the possibility of being given a voucher to go out and shop for coverage on their own.

This election has given us four more years of health reform. In that time, perhaps the public will warm to the program the way they have grown to love Medicare and Social Security. Perhaps we’ll see some real improvements in health and health care. Perhaps this will be the impetus for additional reform efforts in the future. But we’re not out of the woods yet. Republicans still control the House, while Democrats cling to a narrow majority in the Senate. It is possible that, through the budget process, Republicans can interfere with the implementation of the Affordable Care Act. It is even possible that, if they make large gains during the 2014 mid-term elections, they could find themselves in the position to repeal the ACA by overriding President Obama’s veto. And, while I hesitate to bring it up so soon, there’s 2016, when we will once again elect our President. Obamacare will only have been fully implemented for a couple of years, and if the economy hasn’t fully recovered, you can bet that the rhetoric of repeal and replace will be on full display. But, for the moment, we can breathe a little bit easier, knowing that we just bought Obama–and Obamacare–a little more time.