Of Interest...
KEY HEALTHCARE PROVISIONS OF HOUSE RECOVERY ACT
-
Provides $20 billion to accelerate adoption of health information technology (HIT) systems by doctors and hospitals, including significant financial incentives through Medicare and Medicaid.
-
Gives the federal government a leadership role in developing HIT standards by 2010 to allow for nationwide electronic exchange.
-
Strengthens federal privacy and security laws to protect personally identifiable health information from misuse as the healthcare sector increases the use of HIT.
-
Provides $87 billion in additional federal Medicaid matching funds to states over a two-year period. Medicaid is the primary payer of nursing home costs.
-
Helps maintain health coverage for workers laid off in the last 12 months by providing a 65 percent subsidy for COBRA premiums.
-
Gives states the temporary option of offering coverage to unemployed workers through their Medicaid programs, with the federal government matching 100 percent of the costs of benefits and administration.
-
Allows COBRA-eligible workers who are 55 or older, or have worked for an employer for 10 years or more, to extend their COBRA coverage, at their own expense until they become Medicare-eligible at age 65 or secure coverage through a subsequent employer.
-
Provides $1.1 billion for comparative effectiveness research to help patients and doctors determine the effectiveness of different medical treatments.
-
Provides $600 million for the training of doctors, dentists and nurses to address the shortage of primary care providers.
LCAO Makes Recommendations on Obama Executive Order for Seniors
The Leadership Council of Aging Organizations (LCAO) recently sent its recommendations to the Obama Administration regarding legislative policies that will improve the lives of America’s seniors. The LCAO is a consortium of prominent national aging advocacy organizations that represents millions of older Americans, and the Alliance has been and will be the chair of the organization for the twelve-month period that began on July 1, 2008. In documents available at http://www.lcao.org/docs/121008letter.pdf and http://www.lcao.org/docs/121508letter.pdf , LCAO lays out the top issues facing America’s seniors and provides specific recommendations on how to best tackle these tough challenges through a proposed Executive Order. “As the first wave of 79 million baby boomers heads to retirement with less economic security than previous generations, we face the alarming prospect that many of our seniors will not have enough income to retire securely – if they can even retire at all,” said Edward F. Coyle, Chair of LCAO and Executive Director of the Alliance. Among LCAO’s recommendations is that the Obama Administration create a White House Office on Older Adults (or the position of Domestic Policy Council Advisor on Older Adults) to develop, lead and coordinate the Administration’s policy agenda on crosscutting issues that assist and empower older Americans. LCAO also recommends giving the Secretary of Health and Human Services the authority to use Medicare’s bulk purchasing power to negotiate prescription drug prices, and halting the so-called “premium support” demonstration project in 2010 that would require traditional fee-for-service Medicare to compete, based on cost, with heavily subsidized private plans in certain areas. The coalition also wishes to allow early retirees to buy into Medicare, along with several other steps.
Medicare Part D "Doughnut Hole" Remains Confusing to Enrollees
A recent survey by Medco Health Solutions of Medicare Part D enrollees shows that most of them do not understand the "doughnut hole" coverage gap under which they must pay the full cost for their prescription drugs. The Seattle Post-Intelligencer reports that 62% of enrollees do not fully understand the concept, and 28% do not know what it is or do not understand it at all. Two-thirds of respondents in the coverage gap are unable to identify what spending counts toward the gap. For the year 2008, once a patient's drug costs reach $2,510, they must pay full cost for their medications on their own until their out of pocket spending reaches $3,850. At that point, their coverage resumes. What many people do not understand is that the spending of both the patient and the health plan count towards the gap, causing many to fall into the hole months before they expect to. "Be sure to review all of your materials during this open enrollment season for Part D, and if you are unsure, ask questions," said Edward F. Coyle, Executive Director of the Alliance.
New Law Will Aid Grandparents Raising Their Grandchildren
President Bush recently signed into law the "Fostering Connections to Success and Increasing Adoptions Act" (H.R. 6893). Brigitte Castellano, Executive Director of The National Committee of Grandparents for Children's Rights (NCGCR) and an Alliance board member, was instrumental in passing this bill, which will support grandparents raising grandchildren. Under this law, the federal government will offer support for states to assist with subsidized guardianship payments to grandparents and other relatives who have children placed with them and will allow states to choose to continue benefits until the child reaches age 21. This program will also ensure relatives get notice when children are removed from their parents' care, and allow states to waive non-safety related standards for relatives who want to care for these children. The law also guarantees that funding will be available for Kinship Navigator programs, which help caregivers access community assistance and support services. The act will help hundreds of thousands of children and youth in foster care by promoting permanent families for them through relative guardianship and adoption. For more information, visit www.grandparentsforchildren.org or call 866-624-9900.
SOCIAL SECURITY ANNOUNCES 5.8 PERCENT COLA FOR 2009
Monthly Social Security and Supplemental Security Income benefits for more than 55 million Americans will increase 5.8 percent in 2009, the Social Security Administration announced Oct. 16. The 5.8 percent increase is the largest since 1982. Social Security and Supplemental Security Income benefits increase automatically each year based on the rise in the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the prior year to the corresponding period of the current year. The 5.8 percent cost-of-living adjustment (COLA) will begin with benefits that over 50 million Social Security beneficiaries receive in January 2009. In addition, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $106,800 from $102,000. Eleven million of the estimated 164 million workers who will pay Social Security taxes in 2009 will pay higher taxes as a result of the increase in the taxable maximum.
NEW WRINKLE IN COLLECTING SOCIAL SECURITY BENEFITS
Seldom in life is it possible to change your mind about a major financial decision. That’s not true about Social Security retirement benefits, according to a recent New York Times article. Under a longstanding but little-known part of the law, retirees who decide to start collecting benefits are permitted to change their minds and start over, reaping the progressively higher payments brought by deferral until age 70. In other words, an individual can start collecting at age 62, saving and investing that money, and then at age 70 file a withdrawal application and still get the maximum benefits accorded to those who wait to start collecting. The big caveat is that the recipient has to repay an amount equal to the benefits collected up to that point (plus any money withheld for Medicare premiums). The repayment can either be deducted from federal income tax returns or taken as an income tax credit for taxes paid on benefits. But for obvious reasons, very few have exercised this option—only 164 people of full retirement age in the first months of the current government fiscal year. A major risk is that a retiree could die after repaying many tens of thousands of dollars. “I’ve heard of cases of people paying $100,000 or more back to do this,” said Mark Lassiter, a Social Security spokesman. “The risk that they are taking, of course, is that they walk out the door on the way back home and get hit by a bus.” The Social Security system allows workers to begin collecting reduced benefits at age 62, the option chosen by about half of applicants. Those who wait until full retirement age, now 66 for retirees born after 1942, get some 30 percent higher monthly benefits than they would have at 62; those who wait until 70 get about 60 percent more. By actuarial projections, lifetime benefits are about equal, whether taken early or late. But by waiting to collect a higher benefit, individuals acquire more longevity insurance—something experts increasingly recommend. Although calculating whether it’s worthwhile for a recipient to repay involves many interrelated considerations, the process itself is simple. Just go to the Social Security Web site, and download Social Security Form 521, Request for Withdrawal of Application. The form asks the reason for applying, but approval is almost assured, according to the Times.
FALTERING ECONOMY CAUSING MORE TO SKIMP ON MEDICAL CARE
Many Americans are now skipping doctor visits, skimping on medications and putting off mammograms, Pap smears and other tests, according to a survey released Oct. 21 by the Kaiser Family Foundation. The report found that 36 percent of U.S. residents have delayed medical care in the past year because of cost, up from 29 percent in April. About three in 10 say they have skipped a recommended test or treatment. In addition, a July survey conducted by the National Association of Insurance Commissioners found that 11 percent of residents have reduced the number of medications they take or have decreased the dosage because of cost. According to an analysis conducted recently by IMS Health, a healthcare research and consulting firm, U.S. prescription drug sales decreased by 0.4 percent in the second quarter of 2008, the first time that sales have not increased in at least the past 12 years. Dick Clarke, president of the Healthcare Financial Management Association, said that elective surgeries, diagnostic tests and outpatient procedures in recent months have decreased by about 1 percent to 2 percent at many hospitals, compared with the 2 percent to 4 percent annual increase expected as the population ages. At the same time, hospitals have reported an increased number of patients--many of whom lack health insurance-- who seek care in emergency departments, Clarke said.
Purported Merck Vioxx Medical Study Was Actually a Marketing Campaign
A report in the Annals of Internal Medicine has found that the drug company Merck & Co. used a clinical study ostensibly aimed at testing side effects to market the drug Vioxx to primary-care physicians and the public before it was released. According to The Wall Street Journal, a Yale research team released the report on Merck’s practices after a long legal battle over Vioxx’s side effects was settled for $4.85 billion. Vioxx users sued Merck because the drug increases the risk of heart attack and stroke. The report’s findings are based on Merck records released during litigation, which say that the 1999 study was “designed and executed in the spirit of Merck marketing principles.” Merck’s practices raise important ethical and scientific questions, from whether the study’s participants were needlessly put at risk to whether Merck’s side effect testing was reliable at all. The latter issue raises a legal question as well, because the increased risk of heart attack and stroke that caused the lawsuit are side effects that could have been found in the testing that Merck was purportedly doing. Alarmingly, the study suggests that Merck’s practice of using studies for early marketing is most likely a common industry practice.
Women at a Disadvantage in Preparing for Retirement
A study by the firm Hewitt Associates has examined the projected retirement levels of nearly 2 million employees at 72 U.S. companies. According to BusinessWeek, the study found that both men and women are on track to replace 85% of their pay at retirement. However, the average woman will need to save 2% of pay more per year than the average man, over 30 years, to achieve the same standard of living. Reasons listed include lower salaries, conservative investing, longer life expectancies, and higher retiree medical needs. In addition, care-giving demands mean that women spend less time in the labor force and are more likely to work part-time.
CBO Says Social Security Healthy and Viable for Decades to Come
The Congressional Budget Office (CBO) has released a report stating that Social Security is in good financial shape and will continue to be so for decades to come. The report, which forecasts out 75 years, finds that while the accumulating surpluses in the Social Security trust fund will be exhausted in 2049, ongoing revenues will still be sufficient to fund about 81% of promised benefits at the end of the 75-year period (in 2082). The reason given is that wages and Social Security revenues will continue to grow as the economy grows. The trust fund will cushion the large baby boom retirement, as it was designed to do, but most benefits will continue to be funded by direct transfers from workers to retirees, as they are now. In a policy memo outlining the CBO’s findings, the Economic Policy Institute (EPI) think tank noted the report’s finding that “future Social Security beneficiaries will receive larger benefits in retirement...than current beneficiaries do, even after adjustments have been made for inflation.” According to the CBO projections, Social Security is in decent shape, because - without any changes at all - the projected long-term Social Security shortfall equals a mere 1% of taxable payroll. EPI further states that the biggest problem facing Social Security is not the boomer retirement, but growing income inequality, which increases the share of untaxed earnings above the taxable earnings cap (currently set at $102,000). “Social Security has been a great success for 73 years, and it will be a great success for the next seventy-five,” said Ruben Burks, Secretary-Treasurer of the Alliance for Retired Americans. “Of course, that is provided no one alters the core principles on which it is based by privatizing it.”
U.S. Healthcare System First in Cost, Last in Mortality
According to a report released July 17 by the Commonwealth Fund Commission on a High Performance Health System, a nonprofit research group in New York, U.S. healthcare is the most expensive in the world, but does not meet critical benchmarks for quality, access, and other major performance measures. While America spends twice as much per capita on healthcare, it ranks lower than most other industrialized nations on numerous indicators of overall care; the U.S. score averaged 65 out of 100 over 37 categories, and fell to last for preventing deaths through use of timely and effective medical care. As healthcare costs increase and even the insured face medical bills they cannot afford, Americans also have less access to care than they did a year earlier—an estimated 75 million people in the U.S. have either no or inadequate health insurance.
GAO Report Spotlights Medicare Advantage Waste
A Government Accountability Office (GAO) report by House Ways and Means Health Subcommittee Chair Pete Stark (D-Calif.) has found that the private insurance companies administering these plans have spent less than projected on beneficiaries, while raking in an extra $1.4 billion on top of their $35 billion in profits. The GAO examined plans representing 78 percent of MA enrollees and found the programs only spent 85.7 percent of their total revenue on medical expenses in 2005, significantly below their projection of 90.2 percent. Under the rules of the program, insurers recording higher profits than expected are required to spend the additional funds on extra health services for beneficiaries.
