Guest Contributors Paul Burke and Jan Kletter, MD
People know that Obamacare changed private insurance. It also changed Medicare, to save money.
Seniors with both Medicare and private health insurance need to think about dropping Medicare Part B, which covers doctors, outpatient procedures and equipment, but also imposes restrictions. This is a serious decision.
Medicare is changing the way it pays hospitals and physicians who agree to work together in alliances. These alliances are known as accountable care organizations. Essentially the alliance keeps half the savings when it cuts the care of Part B patients: it gets more money for doing less. Therefore Part B patients with complex medical problems may not get the type of care that was available in the past, and that private insurance still covers.
Additionally, hospitals can get hit with a penalty imposed by Medicare when patients have too many hospital stays. Medicare rates hospitals on the number of Part B patients admitted twice in 30 days, even if the stays are unrelated and the hospital is not at fault. Every readmission above average, in any of six categories, incurs a penalty of $30,000 to $265,000, far more than Medicare pays to treat a patient in the first place. The penalties are supposed to encourage better care; the side effect is to discourage certain hospital stays. Instead, hospitals use other resources to keep complex Part B patients, with above-average chance of readmission, out of hospital beds.
The American College of Surgeons warned Medicare on June 14 about "the potential that these hospitals will decrease their care for such patients, thereby creating an access issue." Hospitals can afford to avoid these Part B patients, because Obamacare sends them many new private patients. The question is whether or not this is going to lead to better outcomes for patients.
Part B premiums cost $1,300 to $4,000 per person per year. Dropping Part B puts that money back in the patient's pocket. It also shields patients from the new restrictions on Medicare coverage.
According to the respected Guide to Health Plans, most federal retirees will save money by dropping Part B and keeping their federal health plan. "Medicare Part B will rarely save you nearly as much money as you spend on the Part B premium... Medicare Part B is of limited value to someone already covered by a good health plan."
Patients need to be certain of their own situation, but many have already bypassed Part B. Skipping it makes sense for many more, now that Medicare restrictions are in place.
Private insurers also want to cut care; Medicare has gone further, since it has more power. To drop Part B, patients file form 1763 with Social Security. They can re-enroll online the first three months of each year, which would take effect in July, with a 10 percent higher premium for each year without Part B. As the Guide to Health Plans says, "Thus, dropping Part B is not an irrevocable decision, and later rejoining Part B need not be highly costly."
It is understandable why Medicare has these restrictions. Seniors who get less treatment and die save money for both Medicare and Social Security. These programs are under intense pressure to cut costs. Patients who can pay doctors' bills with other insurance will avoid Medicare's reductions in care by dropping Part B.
Paul Burke is a retired federal researcher who manages a watchdog site, Globe1234.com
Jan Kletter currently practices general surgery in West Virginia.