(Patrick/Flickr)

New research finds that many seniors who switch from their HMO-style Medicare Advantage plan to traditional Medicare have higher levels of significant health problems, fueling concerns that the private plans cater to more profitable, healthy beneficiaries but don’t provide the most attractive care for the very ill.

More than 13 million people, a quarter of all Medicare beneficiaries, are enrolled in these private plans. Enrollment has been growing, in part because the plans often offer lower premiums than does traditional Medicare, as well as special perks such as free gym memberships.  Many Republicans want to build on them while capping the amount of money each Medicare beneficiary gets toward insurance. Democrats are disturbed the plans are more expensive than traditional Medicare and cut payments in the 2010 health law.

The federal government pays the plans a set fee for each enrollee. That has drawn concerns from some senior advocates that the plans have incentives to skim off the lowest-maintenance customers and leave the expensive patients to traditional Medicare.

A study released Thursday, by Gerald Riley, a researcher at the Centers for Medicare & Medicaid Services (CMS), adds to those concerns. The study looked at more than 240,000 people who dropped out of Medicare Advantage plans in 2007, and compared them with beneficiaries who remained in traditional Medicare the entire time. In the six months after leaving the private plans, the former Medicare Advantage patients used an average of $1,021 in medical services each month, while the patients in the control group cost Medicare $710 a month, the study found.

Another study in the December issue of the journal Health Affairs found that people “disenrolling were much more likely than other beneficiaries to report health declines.” Those researchers, led by J. Michael McWilliams, a Harvard Medical School professor, surmised that beneficiaries who developed serious ailments might leave the plans to get unfettered access to physicians and treatments through traditional Medicare, but neither that study nor Riley’s determined what motivated the changes.

“It may just be a benign motivation, that patients, when they’re sick, want the freedom to go where they want,” said Robert Berenson, a senior fellow at the Urban Institute.

McWilliams’ study, along with other analyses in the same issue of Health Affairs, found that generally, Medicare has succeeded in reducing cherry-picking by Medicare Advantage plans by changes in how the program worked, including restrictions in the time periods that people could switch from a private plan back to traditional Medicare. In 2006, Medicare tried to crack down on switches by limiting them to once a year rather than monthly.

Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, a trade group, said the government has protections in place to ensure these plans provide satisfactory care for the sick. “CMS reviews these plans every single year specifically to make sure they are not discriminating against any kind of beneficiaries,” he said.

He also noted that other independent studies have found Medicare Advantage plans do a superior job in caring for enrollees. For instance, another study in the December Health Affairs found that people in the private plans were less likely to end up in the emergency room and get elective surgeries, and more likely to get certain recommended types of care.

Also, an analysis of patients in three big states—California, New York and Florida — by researchers at the federal Agency for Healthcare Research and Quality determined people in private managed care plans were less likely to end up in the hospital.

Riley’s study noted the health law’s reduction in payments to Medicare Advantage plans. “This may intensify pressure on plans to encourage selective disenrollment,” he wrote. “Chronically ill enrollees may be more inclined to disenroll if access to care deteriorates or if plans cover a smaller portion of the costs of their care.”

Judith Stein, executive director of the Center for Medicare Advocacy, a watchdog group based in Connecticut, said the conclusions echo anecdotal experiences her group has seen as it assists the elderly trying to obtain services.

“Private Medicare Advantage plans work for people when they are relatively well, but fall short of traditional Medicare when they are sick or disabled,” she said. “This is particularly true for our clients with long-term and chronic conditions, many of whom also have low incomes. They are often denied coverage for necessary skilled care, or it is terminated before it should be, while the same coverage would be available in traditional Medicare.”

Embedded in these wonky charts is an illustration of disparity:

And that disparity plays out in people not getting health care because of cost. Another snapshot of disparity:

This data was compiled before the Affordable Care Act was passed. We’ll have to wait and see how coverage and access change once the ACA is fully implemented in 2014.

(Patrick/Flickr)

It seems seductively easy: people are living longer, so why not raise the Medicare eligibility age from 65 to 67? This kind of entitlement reform is key to Republican strategies to pull the federal government back from the so-called Fiscal Cliff.

The problem is that while raising the Medicare eligibility age looks great in the short run, longterm it could actually cost money.

First, the short run: the non-partisan Kaiser Family Foundation says the federal government would save an estimated $5.7 billion in 2014 if the eligibility age were raised. Using a slightly different analysis, the nonpartisan Congressional Budget Office says savings could total $113 billion over the next decade.

But, those 65 and 66-year-olds are the youngest and presumably healthiest people in the Medicare program — meaning that if they leave Medicare, they would then be the oldest and presumably sickest people in any other insurance pool.

What would happen to those people?

Some or many might stay in the workforce, and their presence would likely drive up costs to their employers or the new health insurance exchanges.

Some might find themselves eligible for Medicaid, the government sponsored health plan for the poor.

In its analysis, the Kaiser Family Foundation estimates that two-thirds of the five million affected 65 and 66-year-olds “would pay an average of $2,200 more for their health care in 2014 than they would have paid if covered under Medicare.”

And what about those still in Medicare? Without those younger, healthier 65 and 66-year-olds, Medicare premiums for the people left would rise by 3 percent, according to the Kaiser Family Foundation analysis.

A recent Associated Press-GfK poll found that many Americans — 40 percent — are willing to consider raising Medicare’s eligibility age, but 48 percent are opposed. The poll showed a pretty big division by age, as the AP indicated in its report:

Those under age 30 were most supportive, while a clear majority of those between the ages of 30 and 64 were opposed. Seniors were split. Surprisingly, there were no significant differences by political party. Overall, foes of the idea were more adamant, with strong opponents outnumbering strong supporters by 2-1.

U.S. life expectancy has risen by about eight years since Medicare was created in 1965. During the 1980s, Republican President Ronald Reagan and Democratic congressional leaders agreed to gradually increase the age for receiving full Social Security benefits from 65 to 67. But they didn’t touch Medicare eligibility.

Since then, some policy experts have advocated aligning the Medicare and Social Security eligibility ages through a gradual phase-in that would spare those close to retirement.

(Graphic: Kaiser Health News)

The so-called “fiscal cliff” is a package of automatic spending cuts and tax hikes set to kick in next month unless President Obama and Capitol Hill agree on a way to stop them.

Negotiations to avert the cuts are ongoing and both sides have exchanged offers. On one side, the president and congressional Democrats have said they will reduce spending on entitlements, including Medicare, if Republicans will agree to increase tax rates on the highest earners.

And on the other side, Republicans have agreed to more revenue — but by closing loopholes and eliminating some deductions. They oppose raising tax rates.

Here are answers to six questions about what could happen in health care before the end-of-year deadline.

Q: If no deal is struck, how would that affect Medicare patients as well as the hospitals and physicians and other providers who care for them?

A: Under the series of automatic spending cuts called “sequestration,” Medicare providers would be subject to an across-the-board 2 percent payment cut in fiscal 2013. That’s $11 billion. According to a September report from the Office of Management and Budget, hospitals would bear the largest share of the cuts, with payments reduced by about $5.8 billion.

Seniors would see no changes in their benefits.

Q:  How does that 2 percent cut in payments to physicians affect the 27 percent cut in Medicare payments to doctors already scheduled to occur in January? 

A: Physicians who accept Medicare patients would face the 2 percent cut on top of an already scheduled 27 percent reduction in January unless Congress steps in to stop it.

That payment formula was created in a 1997 deficit reduction law that called for setting Medicare physician payment rates through a formula based on economic growth. It’s known as the “sustainable growth rate” (SGR).

For the first few years, Medicare expenditures did not exceed the target and doctors received modest pay increases. But in 2002, doctors reacted with fury when they came in for a 4.8 percent pay cut. Every year since, Congress has staved off the scheduled cuts. But each deferral just increased the size – and price tag – of the fix needed the next time.

A deal on the SGR could be part of a “grand bargain,” if congressional fiscal cliff negotiators decide to include it. To that point, Obama’s offer to Republicans included $25 billion to stop the scheduled cut. Congress could also pass separate legislation to stop the cuts. Some doctors say that if Medicare reimbursements are further reduced they may stop accepting Medicare patients.

Q: If negotiators do reach a deal, what could that mean for Medicare?

A: It depends on how large a role Medicare plays in a broader deal. Some of the proposals include raising Medicare’s eligibility age to 67, asking wealthier Medicare beneficiaries to pay more for their coverage and paying Medicare providers less. All are complicated and many Democrats have said that they do not want to make changes that harm beneficiaries or shift costs from the government onto seniors.  Republicans are insisting that entitlement savings play a large role in any deficit reduction deal.

Q: How is Medicaid affected, either way?

A: Medicaid does not face any automatic cuts starting Jan. 1. The Supreme Court’s ruling in June made the health law’s Medicaid expansion optional for states, so there’s concern that any reductions in federal Medicaid spending might make governors even more reluctant to expand the federal-state program.

Many Republicans, including GOP presidential nominee Mitt Romney and his running mate, Rep. Paul Ryan, R-Wis., favor changing Medicaid into a block grant, where states are given a set amount of money and more freedom to decide who is covered and what benefits they would receive. But the block grant concept is a non-starter with Obama and Democrats.

Q: If no deal is reached by Jan. 1, what happens to federal funding for medical research?

A:  The National Institutes of Health would see a $2.5 billion reduction in 2013, which means that the agency would “have to halt or curtail scientific research,” according to the OMB analysis. Other agencies would see cuts, too. For example, the Centers for Disease Control and Prevention would face cuts of $490 million, and the Food and Drug administration would see reductions of about $318 million.

Q:  If no deal is reached, what happens to health care for members of the military and veterans?

A: The TRICARE program for active members of the military system would also face an across-the-board 2 percent cut. The Veterans Affairs health system, however, is exempt from sequestration.

Alvin Tran contributed to this report.

(Su-Lin: Flickr)

Whatever the outcome on November 6th, officials in Washington will still have to deal with a looming “fiscal cliff” before the end of the year.

What’s coming is a perfect storm of expiring tax cuts, scheduled budget cuts, and various other spending changes scheduled to take place Jan. 1 unless Congress and President Obama (who, no matter what, will still be president until next Jan. 20) agree on a way to avert them.

As two of the largest spending items in the federal budget, the Medicare and Medicaid health programs are expected to play a role in how the deal gets done. Under the provisions of the law that created the budget deal Congress will attempt to undo, Medicare is subject to a two percent cut in provider payments, while Medicaid is exempt.

But two new studies and a proposed class action lawsuit settlement suggest a lot of dollar signs could change as lawmakers start to think about how to address the impending mess.

A proposed settlement in a long-running dispute between advocates for Medicare patients and the federal government is actually likely to increase Medicare spending — although how much remains unclear.

The suit was brought by the Center for Medicare Advocacy on behalf of a class of patients with chronic conditions. these patients had been denied Medicare coverage for home care, nursing home care or other services on the grounds that the patients’ conditions were not expected to “improve” with care.

The settlement – assuming it is approved by the judge in the case — means that “the Medicare Benefit Policy Manual will be revised to correct any suggestion that continued coverage is dependent on the beneficiary improving,” said the organization in a statement. The change is expected to affect as many as tens of thousands of beneficiaries with conditions ranging from multiple sclerosis to Parkinson’s to diabetes, arthritis, and heart disease.

But while it will boost spending for Medicare by preventing many of those patients from spending themselves into poverty, it could well end up saving money for Medicaid, which is jointly financed by the federal government and the states.

A new survey from the Kaiser Family Foundation finds that after one of the fastest growing years for that program, Medicaid spending growth slowed dramatically in 2012.

Total state Medicaid spending grew by an average of two percent in fiscal 2012, “among the lowest rates of growth ever recorded,” according to the study. By contrast, spending in fiscal 2011 rose by 9.7 percent.

Part of the slowdown was due to a recovering economy, which made fewer additional people eligible for the program, the survey found. Part was also due to states imposing their own cost controls on the program, in part stemming from the end of additional temporary federal funding that came as part of the 2009 stimulus law.

That spending could go down more – a lot more – if Mitt Romney is elected and implements his plan for Medicaid, according to yet another study out this week.

This one, commissioned by the Kaiser Family Foundation and done by researchers for the Urban Institute, looked at the potential impact of implementing the plan approved by the Republican-led House. That’s similar to the one Romney is proposing.

The study found that the combination of repealing the Affordable Care Act (which calls for a major expansion of Medicaid) and limiting federal payments for Medicaid could together reduce federal Medicaid spending by $1.7 trillion from 2013 to 2022. That represents a 38 percent cut in federal funding for the program.

The study estimated a range of how many people would lose coverage, depending on how states react. The estimates, however, range from a low of 31.3 million fewer people being covered to 37.5 fewer million people being covered.

Even when the questions aren’t about health care, many of the responses are. Here’s what President Barack Obama and his Republican opponent, former Mass. Gov. Mitt Romney had to say Tuesday night about contraception, Medicare and the health law. A transcript follows.

BARACK OBAMA: Katherine, I just want to point out that when Gov. Romney’s campaign was asked about the Lilly Ledbetter bill, whether he supported it, he said, “I’ll get back to you.” And that’s not the kind of advocacy that women need in any economy.

Now, there are some other issues that have a bearing on how women succeed in the workplace: for example, their health care. A major difference in this campaign is that Gov. Romney feels comfortable having politicians in Washington decide the health care choices that women are making. I think that’s a mistake. In my health care bill, I said insurance companies need to provide contraceptive coverage to everybody who is insured, because this is not just a health issue. It’s an economic issue for women. It makes a difference. This is money out of that family’s pocket.

Gov. Romney not only opposed it — he suggested that, in fact, employers should be able to make the decision as to whether or not a woman gets contraception through her insurance coverage. That’s not the kind of advocacy that women need. When Gov. Romney says that we should eliminate funding for Planned Parenthood, there are millions of women all across the country who rely on Planned Parenthood for not just contraceptive care. They rely on it for mammograms, for cervical cancer screenings. That’s a pocketbook issue for women and families all across the country.

…

MITT ROMNEY: I’d just note that I don’t believe that bureaucrats in Washington should tell someone whether they can use contraceptives or not, and I don’t believe employers should tell someone whether they could have contraceptive care or not. Every woman in America should have access to contraceptives. And the president’s statement of my policy is completely and totally wrong.

…

And then let’s take the last one, championing small business. Our party has been focused on big business too long. I came through small business. I understand how hard it is to start a small business. That’s why everything I’ll do is designed to help small businesses grow and add jobs. I want to keep their taxes down on small business. I want regulators to see their job as encouraging small enterprise, not crushing it.

And the thing I find most troubling about Obamacare — well, it’s a long list — but one of the things I find most troubling is that when you go out and talk to small businesses and ask them what they think about it, they tell you it keeps them from hiring more people.

…

BARACK OBAMA: You know, there are some things where Gov. Romney is different from George Bush. George Bush didn’t propose turning Medicare into a voucher. George Bush embraced comprehensive immigration reform. He didn’t call for self-deportation. George Bush never suggested that we eliminate funding for Planned Parenthood.

…

But you should pay attention to this campaign, because Gov. Romney’s made some commitments as well, and I suspect he’ll keep those, too. You know, when members of the Republican Congress say, we’re going to sign a no tax pledge so that we don’t ask a dime from millionaires and billionaires to reduce our deficit so we can still invest in education and helping kids go to college, he said: me, too. When they said, we’re going to cut Planned Parenthood funding, he said: me, too. When he said, we’re going to repeal Obamacare, first thing I’m going to do — despite the fact that it’s the same health care plan that he passed in Massachusetts and is working well — he said: me, too. That is not the kind of leadership that you need, but you should expect that those are promises he’s going to keep.

And the choice in this election is going to be whose promises are going to be more likely to help you in your life, make sure your kids can go to college, make sure that you are getting a good-paying job, making sure that Medicare and Social Security will be there for you.

…

MITT ROMNEY: I want to make sure that regulators see their job as encouraging small business , not crushing it. And there’s no question but that Obamacare has been an extraordinary deterrent to enterprises of all kinds hiring people. My priority is making sure that we get more people hired. If we have more people hired, if we get back manufacturing jobs, if we get back all kinds of jobs into this country, then you’re going to see rising incomes again.

By Jordan Rau, Kaiser Health News

The type of proposal championed by Republicans to overhaul Medicare by giving beneficiaries a fixed amount of money to purchase insurance could lead to significant increases in premium costs in some parts of the country, according to a new study.

If the plan had been in place in 2010, six in 10 Medicare beneficiaries—about 25 million people both in traditional Medicare and in private Medicare Advantage plans —would have faced higher premiums if they didn’t switch to a cheaper plan, according to researchers at the Kaiser Family Foundation. (The foundation is not affiliated with Kaiser Permanente).

The study modeled the impact of a generic version of premium support, under which beneficiaries would receive a defined subsidy, or voucher, to buy health insurance in a competitive market instead of getting a guaranteed set of benefits as Medicare has traditionally provided. That payment would be tied to the second lowest cost plan offered in an area or traditional Medicare, whichever is lower. This kind of a change is a central part of the House Republican budget written by Rep. Paul Ryan of Wisconsin, now the GOP’s vice-presidential candidate, and it has also been embraced by GOP presidential nominee Mitt Romney. Even a few Democrats have flirted with such a plan as a way to leverage market efficiency to rein in the spiraling cost of Medicare.

The new study estimated how the plan would have worked in 2010 by looking at the cost of traditional Medicare and private Medicare Advantage plans around the country. The study’s authors emphasized that their model was not an exact replica of any existing proposal for a variety of reasons, including that most plans, among them Ryan’s, wouldn’t phase in for a decade and even then would affect only new Medicare beneficiaries.

The study found that 59 percent of Medicare beneficiaries would have paid higher premiums in 2010 unless they shifted into a cheaper plan. In California, Michigan, New Jersey, Nevada and New York, average extra premiums would exceed $100 a month, and in Florida they would exceed $200 a month, the study calculated.

Medicare spends vastly different amounts per beneficiary around the country, ranging from less than $500 a month per beneficiary in some places to more than $900 a month per beneficiary elsewhere. That’s often because people in some areas of the country are sicker and need more care; it’s also because providers in some places favor more interventions and more expensive ones. In those high-cost areas, beneficiaries would see significant monthly increases in premiums if they remained in traditional Medicare. The study found people in Los Angeles would have paid $260 more and people in Miami would have paid $492 more, for instance.

In other regions where Medicare costs were low—such as Alaska, Delaware, Hawaii, Wyoming and Washington, D.C.— people in traditional Medicare would not pay more, but people in many private Medicare Advantage plans would face higher premiums if they didn’t want to change to traditional Medicare. People in Portland, Ore., for instance, would have paid $211 more a month and people in Honolulu would have paid $254 a month to stay in their preferred private plan. About one in every four Medicare beneficiaries are now enrolled in these private plans, some of which are preferred provider organizations while others are HMOs.

Although the fight over premium support often has been characterized as a battle between defenders of traditional Medicare and proponents of private health plans, the study found that it could have a substantial impact on people who enrolled in Medicare Advantage plans. Nationwide, 88 percent of those beneficiaries would have paid more to stay in their plans, averaging $87 more per month, if it had been in place in 2010.

Of course, getting many beneficiaries to switch to less expensive plans is how the architects of premium support envision saving money. They say it will bring pressure on insurers, doctors and hospitals to offer lower prices. The study noted, however, that such shifts might mean significant changes in the type and quality of care for beneficiaries.

In some regions, the low cost plans might be HMOs, which have tightly controlled networks of doctors and hospitals. If beneficiaries switched from traditional Medicare to HMOs, they might not be able to keep seeing their regular doctors or go to their preferred hospital. In other areas, beneficiaries –perhaps people in private plans that coordinate care – might not like shifting into less costly traditional Medicare.

“Beneficiaries’ preferences and plan choices are not purely driven by premiums, and some beneficiaries may not view the low-cost plan, whether a private plan or traditional Medicare, as optimal for meeting their individual needs and circumstances,” wrote the authors, led by analyst Gretchen Jacobson.

Other studies have found that only a small portion of Medicare beneficiaries switch their Part D prescription drug or Medicare Advantage plans each year, even when doing so could save them money. “There are tradeoffs involved in making changes and we know from Part D and Medicare Advantage that people don’t really change very often,” said Tricia Neuman, who oversees the foundation’s Medicare analyses.

In addition, the new study noted that some low-cost plans might not be able to handle an influx of new beneficiaries. A particularly glaring example is in Los Angeles County, where fewer than 10,000 beneficiaries are enrolled in one of the two lowest-cost plans, while more than 900,000 beneficiaries are enrolled in traditional Medicare or other plans

The study did not estimate how much money the plan would have saved Medicare. In a statement, the Romney campaign said: “As the authors stress, this is not a study of the Romney-Ryan plan. Our plan would always provide future beneficiaries guaranteed coverage options with no increase in out-of-pocket costs from today’s Medicare.” The Obama campaign trumpeted the study, saying it “demonstrates how hollow” is Romney’s claim that the elderly would retain the option of enrolling in traditional Medicare under their plan.

Joe Antos, a health care expert at the American Enterprise Institute, said that the study is “the best technical study so far of this sort,” although he expected a premium support market would be much more competitive than the current Medicare Advantage market is, since the latter is guaranteed a certain payment by the federal government.

“The competition would be even more intense,” he said, especially since most Medicare beneficiaries would not be able to afford anything more expensive than the benchmark plan, and thus insurers would compete to meet those prices. “You just can’t have high costs if people can’t pay it,” he said.

(Image: Kaiser Health News)

Bruce Osterweil is a lucky man to live just a short walk from where San Francisco’s Golden Gate meets the cold, rough waters of the Pacific Ocean. He is also a lucky man to have married his wife, Patricia Furlong, who has long provided the family’s health insurance through her job at a small financial consulting firm.

But last month, Osterweil’s wife turned 65 and decided to retire, and although she may walk away with a crystal bowl or a golden watch for all those years of service, she will also walk away from her company’s generous health insurance benefits. That means Osterweil, who is 59 and a self-employed benefits consultant, is shopping for his own health insurance.

“I’m really surprised at how hard it could be for just the average person who isn’t an actuary or benefits consultant to figure any of this out. It’s astonishing,” he says.

When a spouse or parent signs up for Medicare, it is often perplexing – and unnerving – for the rest of the family who may have grown used to cushy employer-sponsored coverage. For example, young adults up to age 26, who were covered under their parent’s insurance, are no longer covered when their parent moves to Medicare.

“Medicare doesn’t cover dependents,” according to Joe Baker, president of the Medicare Rights Center, a patient education group with a busy hotline for those with Medicare questions. “However, if you’re a dependent of someone who is losing coverage because they’re retiring and going into Medicare, you can continue your coverage for 3 years under COBRA.”

COBRA is a federal law that allows someone to pay full price to stay on their employer’s group plan. They can also shop around for an individual plan. For healthy young adults, Baker says families should look to see if they can find less expensive coverage.

But buying an individual plan can be daunting for older adults in their late 50s or early 60s who are more likely to have some health problems. They are at the mercy of the private insurance market. “We do frequently get calls from folks,” says Baker, “who cannot find insurance policies in the state in which they live either because they have pre-existing conditions or the policy is so expensive they really can’t afford it.”

The younger spouses of Medicare beneficiaries who have been denied coverage – and have been uninsured for six months – can apply for coverage through their state’s so-called high risk pool. Baker notes that there should be better options for older adults starting in 2014, when a key provision of the federal health law will prohibit insurance companies from denying adults coverage because of a pre-existing condition.

Another confounding question is what to do when someone turns 65 and decides to keep working. Should they keep their insurance or sign up for Medicare coverage?

The answer hinges on just how big of a company you work for. “The [federal] rules are quite clear,” says Baker. “If you’re working at an employer with more than 20 employees and you have coverage through that employer — or through a spouse working at company with more than 20 employees — you can continue to keep that coverage. That means you don’t really need to enroll in Medicare.”

Baker says many people will still enroll in Part A of Medicare — which covers inpatient hospital care — because there is no premium, and it may pay some of the costs not covered by your group health plan. But most don’t enroll in Part B, which covers doctor’s visits, because it costs about $100 a month and is often largely redundant.

It is a different story if you work at a small company with fewer than 20 employees. In that case, Baker says, the federal rule is: You need to enroll in Medicare.

“Employers think they’re doing people a favor, saying, ‘Oh don’t worry, you can stay on our plan. Don’t worry about Medicare.’ If they’re under 20 full time employees, they risk the insurance company finding out you’re Medicare eligible and saying, ‘You’re off the plan and by the way everything we paid after you turned 65 and were eligible for Medicare, you need to pay us back.’”

To avoid any foul ups, Baker recommends that as people near their 65th birthday, they should start talking to their human resources department or call Social Security.

This story was produced in collaboration with 

Mitt Romney introduces Paul Ryan as his choice for running mate in Norfolk, Va., last Saturday. (Photo by Win McNamee/Getty Images)

Wisconsin Republican Paul Ryan, GOP presidential hopeful Mitt Romney’s choice for vice president, has provoked consternation from Democrats and anxiety among some congressional Republicans with his proposals to reshape Medicare.

The Republican-controlled House, along party lines, twice approved his proposals to overhaul the popular social insurance program for the elderly and disabled by giving beneficiaries a set amount of money every year to buy coverage from competing health plans. That is a fundamental shift from today’s program, where the federal government pays for as many services as beneficiaries use.

The proposals were never enacted because of opposition from the Democratic-controlled Senate and President Barack Obama.

This year, Democratic congressional candidates nationwide are making the protection of traditional Medicare a centerpiece of their campaigns, just as Republicans attacked them two years ago for curbing future Medicare spending as part of the 2010 health care law. Now, Democrats are hammering their GOP opponents for voting for Ryan’s proposals, which were included in the last two House budget resolutions.

Here is a guide to some of the issues and questions raised by Ryan’s plan.

Q. What is Ryan’s latest Medicare plan?

Ryan would gradually raise the eligibility age of Medicare from 65 to 67 by 2034, and cap its spending increases at half a percentage point higher than the growth rate of the economy, or the gross domestic product. Ryan’s plan would provide a set amount of money annually for future Medicare beneficiaries — those currently under age 55 — to be used to purchase either a private health plan, or the traditional government-administered program through a newly created Medicare exchange.

Under the proposal all plans, including traditional Medicare, would submit bids for how much they would charge to cover a beneficiary’s health care costs. All plans would include a minimum set of benefits equal to the value of those in the traditional program. The government would pay the full premium for the private plan with the second lowest bid, or for traditional Medicare, whichever is lower. Beneficiaries would have to pay the difference if they chose a plan that set rates higher. There could be one less expensive plan option, and beneficiaries who chose it would get a rebate for the difference.

Private health plans would have to offer coverage that is at least actuarially equivalent to that offered in the traditional, government-administered plan. That means that while the benefits could vary, the value of the plan would have to be the same.

Q. So seniors could stay in the traditional, government-run Medicare program if they like?

Ryan says that is the case, but Democrats and some critics argue that the plan would so fundamentally alter Medicare that it might no longer be a desirable – or affordable — option.

“The real question is what it would cost,” and whether seniors would pay more out of pocket than they do now, said Jonathan Gruber, an economist at the Massachusetts Institute of Technology. He cited the risk the government-run plan would attract the sickest people, driving up its costs, while private plans would lure the healthiest. In addition, medical providers could abandon the program if Medicare cut their reimbursement rates to curb costs.

Q. Would the changes apply to current seniors?

Ryan’s plan would apply only to those under age 55. Current Medicare beneficiaries and those nearing eligibility would continue to get Medicare as it exists today.

Q. Would seniors pay more under Ryan’s plan?

The Congressional Budget Office estimated that Ryan’s original proposal for 2012 would require a typical 65-year-old person to pay a lot more for Medicare by 2030. His latest plan is missing key details, however, so the CBO has been limited in its analysis of the impact.

Although Ryan would give future seniors the option of remaining in the traditional, government-run Medicare program, that program would have to compete with private plans. Critics predict that traditional Medicare could become unaffordable if it attracts the sickest people who require more health care and who, therefore, drive up the program’s costs.

Q. Ryan’s most recent plan is similar to one he co-authored with a Democrat last year. Does that mean it has bipartisan support?

No. Sen. Ron Wyden, D-Ore., did not endorse Ryan’s Medicare plan in the last House budget resolution. It is similar to a plan that the two wrote together last year, but there is an important difference. The limit on federal spending per beneficiary was not as strict in the plan they wrote together: The two had placed the cap at GDP growth rate plus 1 percent. Also, no other Democrat supported their 2011 proposal.

Q. How do Ryan’s proposals compare to Democratic plans?

President Barack Obama and many Democrats have said they agree the federal government needs to restrain the growth of Medicare spending, but they seek to do it without making direct cuts to benefits. Democrats want to preserve the program’s defined benefit basis, meaning that the government will pay whatever it takes to cover a specified set of services. During budget deficit reduction negotiations in Washington, Obama proposed holding Medicare spending to half a percentage point higher than the growth rate of the economy. Romney later adopted the same cap.

As part of last year’s budget negotiations, Obama also proposed gradually raising the Medicare eligibility age – if Republicans agreed to revenue raising proposals. But no agreement was reached.

The health law tackles Medicare spending growth, in part, by creating an expert panel, called the Independent Payment Advisory Board (IPAB), which would be responsible for finding ways to reduce spending if Medicare grows at a higher rate than the target. But the board is not allowed to recommend anything that would ration care or that would change benefits, eligibility or cost sharing for Part A (hospital services) or Part B (physician services). It also couldn’t do anything to change the percentage of premium that seniors pay for prescription drug coverage, or the subsidies that low-income individuals get. The expectation is that reductions would come from medical providers, although hospitals are protected at first.

Q. If both Obama and Ryan are proposing a target rate of GDP growth plus half a percentage point for Medicare, wouldn’t federal spending be the same under both scenarios?

There are important differences. Ryan’s plan is a hard cap on federal spending. He would automatically lower Medicare spending so that it is below the trigger level.

Obama is proposing a target that might not bring federal spending down to that level. His proposal follows an effort in the 2010 health law to curb Medicare cost growth by tying the spending target to the Consumer Price Index in early years, and later on to the rate of GDP growth plus 1 percentage point. Now Obama is proposing to lower the target to the rate of GDP plus half a percentage point. If federal spending per Medicare beneficiary rises faster than that – a determination made by the Medicare actuary – then the expert panel must recommend cuts to Congress, which would go into effect unless lawmakers passed an alternative cost-cutting plan. The cuts would come as a percent reduction in Medicare spending, and wouldn’t necessarily be sufficient to meet the target.

Moreover, the panel’s future may be in question, as Republicans – and some Democrats – have sought to kill it, arguing the board would be able to ration care and would have too much control over Medicare. Obama has yet to nominate the panel’s 15 members, who must be confirmed by the Senate.

Some health care analysts also argue that reducing payments to medical providers could drive them out of accepting Medicare patients, creating access issues for beneficiaries. Richard Foster, Medicare’s chief actuary, warned in the 2012 Medicare trustees’ report that the health law will eventually lower payments to medical providers so much that “Congress would have to intervene to prevent the withdrawal of providers from the Medicare market and the severe problems with beneficiary access to care that would result.”

Read More: Paul Ryan’s Plan For Medicare: Essential Reading

(Photo: Kaiser Health News)

Medicare provides free screening on more than a dozen primary care tests, but a new poll shows that seniors are not receiving the benefit. The poll comes from the John A. Hartford Foundation and looked at Americans age 65 and older.

The Foundation was interested in whether seniors had received seven services that would support “healthy aging” including:

• an annual medication review
• falls risk assessment
• screening for depression

Only 7 percent of seniors received all the seven of the recommended services. Just over half (52 percent) received none or just one.

It’s especially surprising that doctors aren’t engaging patients in these wellness exams, since they get paid more for them. Again, from Kaiser Health News:

Medicare pays doctors about three times their ordinary office visit rate for asking about older adults’ ability to function, evaluating their mood, recommending preventive services, and connecting them with community resources during wellness visits.

“These are low tech, low cost interventions that are easy to do and that can have a huge impact on an older person’s medical care and their quality of life and function.  But too many providers and older adults don’t realize they’re important,” said Dr. Sharon Brangman, chairwoman of the board of directors of the American Geriatrics Society.

You might think that this gap in primary care might lead to dissatisfaction. But no. A full 97 percent of seniors reported being satisfied (and 69% “completely” satisfied) with the care they received from their primary care doctor.

Meanwhile, in the comments section of the Kaiser Health News story, one person wrote that both sides need to step up: “…older persons need education on how to interact and bring these issues up,” wrote J. James Cotter, and “physicians need to make better use of health educators who could do much of this.” But how hard is it to make both of these things happen?