Health Care Reform Memo: August 6, 2012
Deloitte Center for Health Solutions publication
The health care reform memos are issued on a weekly basis, highlighting news from the previous week's activities in the administration and implications for the C-suite and various stakeholder groups.
My take: Medicare: the past, the future, and the most pressing problems
From Paul Keckley, Executive Director, Deloitte Center for Health Solutions
My mom, Mimi, died at the good age of 84 on October 31, 2010. I miss her. We talked often—she enjoyed politics and religion, and we talked a lot about health care. Go figure.
On occasion, she’d assemble the Red Hatters at the Martin Center to play cards, eat, and hear more about health care from her son, Paul Jr. I’d stand in front of the group—women in their late 70s, 80s, and some 90s and try to answer as best I could. Their questions were always simple but challenging: —is Medicare going to be there for me? For my kids? Why do the doctors complain about it so much? And what’s going on in Washington? It always seemed to boil down to a discussion about Medicare—a program that, for many, was introduced in their adulthood, having grown up prior to its creation as part of LBJ’s Great Society program in 1965. Last week marked the 47th anniversary of its signing by President Johnson.
The idea for Medicare had been around for 30 years. FDR considered it along with Social Security in his New Deal in 1935, but was not sure he could get both passed as the economy was still recovering from the Great Depression. Johnson deemed it workable for the time, as now the majority in the civilian workforce had coverage through their employers but many seniors (retirees) went without.
In 1965, the conditions were different. National health expenditures were not a major part of the federal budget nor was health care a high profile industry. Incentives for doctors and hospitals were to do what’s necessary based on their judgment, and insurance companies collected premiums from working folks and their employers to pay for health care. It was simple in those days. Those eligible for Medicare represented only 10 percent of the population and lived about five years after they turned 65. The costs of the program were readily absorbed in a robust economy wherein most workers were covered by some form of coverage. By design, seniors were to pay half through their premiums and the government would pay the rest through payroll tax collections that would sustain the program for future retirees. And along the way, people with disabilities, end-stage renal disease (ESRD), and Lou Gehrig’s disease were added.
Times have changed: our economy is weak, 15 percent of the U.S. population is enrolled today—increasing 7,600/day as 76 million Boomers will hit their 65th birthdays over the next 20 years. And new enrollees now live longer—on average, 13 years after enrollment—and the costs for their medicines, technologies, and services are increasing faster than the overall economy. Then v. now: the facts are compelling:
|Median household income (family households)||$6,8821
($50,135 in 2012 dollars)
|Number of families (in thousands)||48,2791||78,6132|
|U.S. population3||200 million||309 million|
Medicare eligible population4
|19.1 million||48.5 million|
|Life expectancy at birth, all races, both genders||70.2 years6||78.5 years7|
All races, females
All races, males
|66.8 years6||76.0 years7|
|National health expenditures3||$42 billion||$2,594 billion|
|National health expenditures share of gross domestic product (GDP)3||5.8%||17.9%|
|Medicare spending percent of GDP||0.6%4||3.6%|
|Percent reporting having any health insurance8||52%8||98%9|
|Total Medicare benefits payments||$2 billion5||$523 billion|
Inpatient and outpatient hospital care
Physician and clinical services
Skilled nursing facilities
Dental services, durable medical equipment, and other medical products
1 U.S. Census Bureau, "Income in 1965 of Families and Persons in the United States," 1967
2 U.S. Census Bureau, “Income, Poverty, and Health Insurance Coverage in the United States: 2010,” September 2011
3 CMS, Office of the Actuary, National Health Statistics Group; U.S. Department of Commerce, Bureau of Economic Analysis; and U.S. Bureau of the Census, http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical.html
4 Health Affairs, “Three Decades Of Health Care Use By The Elderly, 1965–1998”
5 Kaiser Family Foundation, “Medicare Chartbook, Fourth Edition,” 2010
6 Congressional Research Service, “Life Expectancy in the United States,” 2006
7 Centers for Disease Control and Prevention, “Health, United States,” 2011
8 Social Security Bulletin, “Health Insurance Coverage of the Aged and Their Hospital Utilization in 1962: Findings of the 1963 Survey of the Aged,” 1964
9 U.S. Administration on Aging, “A Profile of Older Americans: 2011”
The Red Hatters don’t care too much about these numbers. They worry about their health. It is central to their quality of life. They readily share results of their latest diagnostic tests seemingly oblivious to Health Insurance Portability and Accountability Act (HIPAA) privacy and security concerns. They share impressions of hospital emergency rooms (ERs), specialists, and which nurses are kind and understanding. They are generally happy about their care, but fearful about losing coverage:
|Views held as percentage of generational cohort||Millennials
|Ratings on various aspects of the health care system: those who graded the system as favorable (“A” or “B” on a typical report card scale:|
|Getting the best value for the money spent on health care||29%||21%||20%||39%|
|Overall performance of the U.S. health care system||38%||28%||32%||51%|
|Meeting the health care needs of me and my family||50%||47%||49%||75%|
|Motivating and supporting people to improve their health||39%||32%||32%||43%|
|Satisfaction with various components of the health care system: those who rated the system 8, 9, or 10 on a 10-point scale of satisfaction:|
|Overall performance of the U.S. health care system||22%||19%||18%||41%|
|Primary health insurance policy/health plan||42%||38%||42%||66%|
|Current primary care provider||67%||69%||79%||89%|
|The U.S. health care system currently spends about $2.7 trillion on health care, almost $9,000 per person per year: percent individuals feel is wasted in the health care system:|
|Between 50 – 100% spending is wasted||63%||66%||62%||54%|
|Waste in the health care system: percentage who believe money spent on health care is wasted:|
|Fraud and abuse in the health care payment/ reimbursement system||57%||67%||74%||78%|
|Individuals not taking enough responsibility for their own health and leading unhealthy lifestyles||50%||49%||44%||57%|
|Duplication of tests and procedures because physicians don't share patient health information with each other||43%||38%||37%||33%|
|Doctors providing more services than necessary and/or refusing to treat high risk patients to avoid possibly being sued||37%||34%||34%||28%|
|Financial security and health care costs: to what extent do you feel your household is financially prepared to handle future health care costs?|
|Not prepared (1, 2, or 3 on a 10-point scale)||28%||36%||38%||17%|
|Prepared (8, 9, or 10 on a 10-point scale)||16%||13%||15%||36%|
|Personal health information: percent who indicated using various methods to maintain records personally:|
|Keep paper copies of health/medical records in a file||41%||38%||38%||55%|
|Use a computer software program or website to maintain a personal health/medical record||13%||9%||9%||10%|
Source: 2012 Survey of U.S. Health Care Consumers, Deloitte Center for Health Solutions.
The Red Hatters depend on Medicare and worry about its fate. They are our system’s most satisfied users, and the security of Medicare is the basis for much of their contentment.
Today, Medicare enrollees pay 25 percent of the costs for their health care through their premiums: including Parts A, B, and C/D, the typical enrollee will pay out more than $3,000 in out-of-pocket costs, and 10 percent have over $8,300 (Source: Kaiser Family Foundation, Medicare Chartbook. Fourth Edition, 2010). They are the health system’s heaviest users: the majority (87 percent), have at least one chronic condition and nearly half have three or more, compared to 21 percent and 7 percent of the general population, respectively. And 30 percent will visit a hospital ER this year, 21 percent will have one or more inpatient stays, and two-thirds will require long-term care services in their lifetimes. And complicating matters, 47 percent have physical limitations, 31 percent have some cognitive impairment, and 29 percent have literacy challenges.
In 2011, Medicare spending was 15 percent of the federal budget; in 2020, it will be 17 percent and exceed $1 trillion in outlays. From 2010 to 2030, enrollment will increase from 47 million to 79 million, while the ratio of workers to enrollees will decrease from 3.7 to 2.4. The Affordable Care Act (ACA) included cuts to the program’s annual growth rate to accommodate more enrollees and fewer wage earners to fund the program through payroll taxes, but its costs will continue to increase as a percent of federal spending simply because demand will continue to soar.
Proposals to save Medicare are wide-ranging: raising eligibility to 67, increasing the payroll contribution from 2.9 percent to 3.9 percent, allowing seniors to purchase private coverage with a voucher augmented by subsidies for those unable, raising premiums from 25 percent to 35 percent of program costs, and increasing co-payments for previously exempt services like home health and the first 20 days of skilled nursing are on the table. Each has a constituency promoting its solution as the best. Meanwhile, economists and policy analysts are busy crunching numbers to gauge a path to Medicare solvency at an inconvenient time: the dual impacts of an election year and tepid economic recovery pose serious threats to honest debate about changes to the popular program.
To the Red Hatters, the number crunching doesn’t matter. They like the program. They like the U.S. health system and do not want it changed. And they worry about the sustainability of Medicare seemingly oblivious to its root causes or solutions to its problems.
Mimi would always ask me, “When are you going to leave ‘delete’ and come home?” I’d reply, “When we have fixed the health system.” Regretfully, she’s passed, and the system’s not fixed. To fix the system, we need reasonable discussion among adults based on an objective set of facts: it can’t be done if left to the political process alone. It requires halting the blame game and recognition that the system is perfectly designed to get the results it has gotten—some good, some not so good. And it means everyone has to compromise, including the Red Hatters.
They are paying attention. Health care matters to them. Medicare is too big to fail. They’re worried not just for themselves, but for their kids and grandkids. It’s worth the effort to fix it and it’s urgent.
Paul Keckley, Ph.D., Executive Director, Deloitte Center for Health Solutions
|1965||Medicare is enacted as Title XVIII of the Social Security Act, extending health coverage to Americans age 65 or older (e.g., those receiving retirement benefits from Social Security or the Railroad Retirement Board)|
|1966||19 million individuals enroll July 1 of that year after Medicare was implemented|
|1972||Medicare eligibility extended to individuals under age 65 with long-term disabilities and to individuals with ESRD
Medicare is given the authority to conduct demonstration programs
|1980||Coverage of Medicare home health services broadened
Medicare supplemental insurance, aka "Medigap," brought under federal oversight
|1982||The Tax Equity and Fiscal Responsibility Act facilitates health maintenance organizations (HMOs) to contract with the Medicare program|
|1983||The Resource-based Relative Value Scale (RBRVS) system is implemented for inpatient acute hospital prospective payment system adopted to replace cost-based payments|
|1985||The Emergency Medical Treatment and Labor Act (EMTALA) requires hospitals participating in Medicare that operate active emergency rooms to provide appropriate medical screenings and stabilizing treatments for anyone regardless of insurance status|
|1988||The Medicare Catastrophic Coverage Act improves hospital and skilled nursing facility benefits, covers mammography, and includes an outpatient prescription drug benefit and a cap on patient liability|
|1989||The Medicare Catastrophic Coverage Act of 1988 repealed after higher-income elderly protests new premiums|
|1996||HIPAA created the Medicare Integrity Program which allows the Centers for Medicare & Medicaid Services (CMS) to contract for program integrity services with outside organizations|
|1997||Balanced Budget Act of 1997 authorizes creation of Medicare + Choice Plans (Part C ) to coordinate coverage for enrollees|
|1998||The internet site www.medicare.gov launched to provide updated information about Medicare|
|2001||Coverage extended for Lou Gehrig’s disease patients (ALS)
Crossing the Quality Chasm published by the Institute of Medicine (IOM) points to safety and quality issues; prompts Medicare to measure safety and quality via demonstrations, pilot programs
|2003||The Medicare Prescription Drug, Improvement, and Modernization Act (Medicare Modernization Act, MMA) created a prescription drug discount card effective 2006 allowing competition among private health plans
Medicare beneficiary income incorporated for first time in premium costs: beneficiaries with incomes less than 150% of the federal poverty level (FPL) eligible for subsidies for the new Part D prescription drug program; beneficiaries with higher incomes pay a greater share of the Part B premium starting in 2007
Pursuant to the MMA, "Medicare+Choice" plans allowed to add prescription drug coverage, become known as "Medicare Advantage" (MA) offered through private companies Medicare Advantage Organizations (MAO)
Source: CMS, Key Milestones in CMS Programs
Medicare hospital payments for FY2013 tied to ACA programs: inpatient hospital to increase 2.8 percent, outpatient 2.1 percent
Last week CMS released a final rule to update Medicare payment rates for acute and long-term care hospitals for fiscal year (FY) 2013 increasing the net reimbursement rate for hospitals by 2.8 percent, and total Medicare spending on inpatient services by $2 billion. Long-term care hospital (LCTH) payment rates will get a 1.8 percent increase, and payments are expected to increase by $92 million. LTCH payment rates will then be reduced to 0.5 percent due to the one-time budget neutrality adjustment for discharges on or after December 29, 2012 (the sequester).
The rule also finalized:
- Information on the agency’s hospital value-based purchasing program (ACA Section 3001)
- Methodology and the payment adjustment factors to reduce payments for hospitals with excessive readmissions for heart attack, heart failure, and pneumonia for admissions after October 1, 2012 (ACA Section 3025)
- Survey measure to the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) measures to assess the quality of care for patients
CMS also issued a proposed rule to revise the Medicare hospital outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) payment system for calendar year (CY) 2013. Under the proposed rule, rates would increase 2.1 percent ($4.6 billion above 2012 costs to $48.1 billion). The rule also proposed the following:
- Extend the 2012 Medicare Electronic Health Record (EHR) Incentive Program Electronic Reporting Pilot for Eligible Hospitals and Critical Access Hospitals (CAHs) through 2013
- Measures to reduce payments for ASCs that fail to meet program requirements beginning in CY 2014
CMS submitted a notice to update the skilled nursing facility (SNF) PPS rates for FY2013, a proposed 1.8 percent increase ($670 million). Note: per ACA Section 3401, multifactor productivity is subtracted after all adjustments have been made. Per Section 1888 of the Social Security Act, Congress is required to adjust SNF PPS rates every FY.
My take: a recent Avalere Health study predicted SNFs would lose $65 billion in Medicare reimbursement over the next decade, with providers in Florida, California, Illinois, and Texas hardest hit. Medical inflation costs are expected to be 3 percent in 2013, so the adjustment on a per capita basis will not be a breakeven proposition for most hospitals and long-term care providers. The result is expected to be substantial margin erosion and likely accelerated consolidation in these sectors.
MLR rebate checks sent last week; 14 percent of plans pay out $1.1 billion
Wednesday was the deadline for large, small, and individual plans to disburse annual rebates for the medical loss ratio (MLR) requirement to eligible plan participants per Section 2718 of ACA. According to the U.S. Department of Health and Human Services (HHS), 14 percent of insurers will pay out $1.1 billion to consumers averaging $151 per household. The highest average rebates will be disbursed Vermont ($807 per family), Alaska ($622), and Alabama ($518). No rebates will be issued in New Mexico or Rhode Island, because insurers there met the 80/20 requirement. Those exempt from the law include self-insured employers, Medicare, and Medicaid. Of the 75 million individuals in plans that are subject to the rule, about 17 percent (12.8 million) will receive rebates this year.
Congress reaches agreement to avoid government shutdown
Last Tuesday, Senate Majority Leader Harry Reid (D-NV), House Speaker John Boehner (R-OH), and the White House accepted a budget resolution to keep the government funded for the first six months of FY 2013 (October 2012-March 2013). The House and Senate will vote in September on the continuing resolution that will use $1 trillion of the discretionary spending limit agreed to in last year’s deficit reduction law. The agreement referred to as a “stopgap measure” will prevent federal government shutdowns while Congress continues negotiations over deficit reduction, the debt ceiling, and tax policies.
My take: the deal also pushes budget talks into the next session of Congress and reduces sensitivities of both parties to a budget debate during the Campaign season and lame duck session of Congress later this year.
DOJ: Supreme Court should not take on Medicare secondary payer case
Background: in June, CMS released an advance notice of proposed rulemaking to clarify Medicare policies and obligations with respect to Medicare Secondary Payer (MSP) (Source: Federal Register, Medicare Program; Medicare Secondary Payer and ‘‘Future Medicals,” June 15, 2012). MSP applies to situations when Medicare is not responsible for paying first. It is sometimes confused with Medicare supplement/Medigap—a policy obtained through a private health insurance company that fills “gaps” in Medicare’s coverage when Medicare is the primary payer. Federal law takes precedence over state law and private contracts.
Last week, the Department of Justice (DOJ) released a brief providing its overview of a MSP case, which may end up in the hands of the U.S. Supreme Court. The case, Vernon Hadden v. United States, was brought on by a victim of a car accident who was required by the 6th District Circuit Court to pay back the entire $62,300 conditionally paid by Medicare from a $125,000 private settlement, which covered a portion of his medical expenses. The DOJ brief agreed with the findings of the lower court and stated that there is no conflict between the court ruling and similar cases; therefore it is not necessary for the Supreme Court to take on the issue.
Fraud efforts in spotlight: Senate Finance inquiry into the CMS FPS; GAO analysis of Medicaid payments
Background: the CMS Fraud Prevention System (FPS) began operating June 30, 2011 with a goal of detecting fraud, waste, and abuse in the Medicare program through predictive modeling technology.
Last Tuesday, Senate Finance Committee Members Orrin Hatch (R-UT) and Tom Coburn (R-OK) sent a letter to CMS for information about FPS’ implementation, targeting for claims review, and transparency in accounting for results. They also asked for additional information about the new public-private partnership with private insurers to promote best practices and to prevent and detect fraudulent practices, announced July 26, 2012. The letter requested a response by August 31, 2012.
Related: White House officials met with health insurance executives last week to discuss their anti-fraud efforts. Insurers do not want their costs for anti-fraud prevention to be included in profit limits (MLR) required in ACA noting that the current rule discourages investigating suspicious billing claims, and investment in innovative fraud programs that could be unsuccessful.
Related: Thursday, the Government Accountability Office (GAO) released its analysis of payments made by Medicaid to providers who are delinquent on taxes owed the federal government. The assessment, based on data from 7,000 providers in Texas, New York, and Florida, showed that Medicaid paid $6.6 billion to providers who owed $791 million in unpaid taxes (representing 6 percent of Medicaid providers in these states) (Source: GAO, “Providers in Three States with Unpaid Federal Taxes Received over $6 Billion in Medicaid Reimbursements,” July 2012).
Massachusetts passes sweeping health reforms aimed at capping costs, changing delivery system
Tuesday, the Massachusetts House passed (132-20) a 349-page bill to contain its health care costs by capping spending at no greater than the growth in the state’s overall economy (gross domestic product, GDP) through 2022. (The state’s GDP growth has averaged 3.7 percent whereas medical costs have averaged 6 percent.) Projected to save the state up to $200 billion over the next 15 years, the legislation also:
- Commits $60 million over the next four years for community-based prevention and public health efforts
- Authorizes Medicaid rate increases of up to $20 million for providers that transition from fee-for-service (FFS) to performance-based methodologies
- Establishes a wellness tax credit of up to $10,000 per employer for businesses that implement recognized workplace wellness programs
- Expands the role of physician assistants (PAs) and NPs to operate "limited service clinics"
- Requires providers to use standardized forms for electronic use with all payers,
- Establishes a 182-day cooling off period before a plaintiff can bring a malpractice lawsuit against a provider (and precludes admission of provider error as an admission of liability)
- Requires insurance companies to disclose to consumers their anticipated out-of-pocket costs
- Strengthens the state’s oversight of insurance company operations and premium requests
- Raises the minimum premium savings for "tiered" or "selective" network health products from 12 percent to 14 percent
- Dedicates $135 million over the next four years to financially distressed community hospitals
- Reorganizes the existing Division of Health Care Finance and Policy into a new independent agency, the Center for Health Information and Analysis, that will collect, analyze, and report health data about the impact of the Commonwealth’s policies on cost trends
- Prohibits mandatory overtime for hospital nurses unless there is an emergency situation
- Establishes a centralized drug procurement process for the state
- Requires an attending practitioner for a patient with a terminal illness or condition to offer to provide counseling regarding palliative care and end-of-life options; an attending unwilling must arrange for another physician or NP to do so
- Requires the Department of Public Health to educate patients, hospitals, SNFs, health centers, or assisted living facilities about the availability of palliative care and end-of-life options
The Senate passed it unanimously on Tuesday, and Governor Deval Patrick (D) is expected to sign the bill.
Maine seeks Medicaid waiver
Wednesday, Maine submitted a state plan amendment to HHS seeking approval to reduce coverage for certain populations currently covered under its Medicaid program and challenging the Maintenance of Effort requirement in ACA. Governor Paul LePage (R) will seek administrative remedies if the Secretary does not approve the state plan amendment by September 1, 2012. Note: per ACA Section 2001, states cannot make eligibility standards, methodologies, or procedures for determination of eligibility more restrictive than those in effect under the state plan or waiver from the date ACA was enacted. Certain exceptions exist for states with current or projected budget deficits.
States: child abuse gets attention, connecting health and human services
Twenty-two states explicitly require clergy to report suspected child abuse or neglect to the state. In 2010, 3.3 million cases involving 5.9 million children (0.9 percent of all children) were filed with child protective services (CPS) agencies—78 percent were substantiated for neglect, 18 percent for physical abuse, 9 percent for sexual abuse, 1,560 died from maltreatment (Source: U.S. HHS Administration on Children, Youth and Families, Child Maltreatment 2010, February 1, 2012).
ONC seeking mobile application developers for Million Hearts Risk Check Challenge
The HHS Office of the National Coordinator for Health Information Technology (ONC) is seeking applications to create a mobile application to help consumers reduce their risk for heart disease by controlling their blood pressure and managing their cholesterol as part of its Million Hearts initiative. After the Challenge winner is selected, the application will be part of a broader national education campaign promoting cholesterol and blood pressure screenings will be launched in Baltimore, Chicago, San Diego, and Tulsa. The winning application developer will receive $100,000 and up to five finalists will receive $5,000. The winners will be announced in December. A webinar is scheduled for August 13, 5:00 p.m. ET for more information.
“Future growth in spending per beneficiary for Medicare and Medicaid—the federal government’s major health care programs—will be the most important determinant of long-term trends in federal spending. Changing those programs in ways that reduce the growth of costs—which will be difficult, in part because of the complexity of health policy choices—is ultimately the nation’s central long-term challenge in setting federal fiscal policy.”
—Congressional Budget Office (CBO)
“Insurers said current versions of old approaches are driven by better information, which helps them focus on improving care, not just saving money. The doctors and hospitals in the narrow networks are selected based on quality measures as well as cost…while data help them to ensure they use prior authorization only where it is headed.”
—Anna Wilde Matthews, “Medical Care Time Warp: Remember Managed Care? It’s Quietly Coming Back,” The Wall Street Journal, Thursday, August 2, 2012
- Medicare fast facts:
- Current enrollment: 48.3 million (including 8 million with disability) (Source: Medicare.gov)
- Enrollment growth: 7,600 new enrollees/day through 2030 (79 million) (Source: Medicare.gov)
- Annual Medicare spending: $536 billion in 2012 increasing to $932 billion in 2020 (Sources: HHS and CMS, “The Boards of Trustees of the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund,” 2012)
- Program solvency: through 2016 (Source: CMS Office of the Actuary)
- Medicare spending cuts in ACA: $530 billion (Source: CBO)
- Unfunded liability to Medicare trust fund: $36.8 trillion (Source: MedPAC)
- Medicare coverage:
|Part A||Part B||Part C||Part D|
|Covers||Helps cover inpatient care in hospitals
Helps cover SNF, hospice, and home health care
|Helps cover doctors’ and other health care providers’ services, outpatient care, durable medical equipment (DME), and home health care
Helps cover some preventive services to help maintain your health and to keep certain illnesses from getting worse
|Offers health plan options run by Medicare-approved private insurance companies
MA Plans are a way to get the benefits and services covered under Part A and Part B
Most MA Plans cover Medicare prescription drug coverage (Part D)
Some MA Plans may include extra benefits for an extra cost
|Helps cover the cost of prescription drugs
May help lower your prescription drug costs and help protect against higher costs in the future
Run by Medicare-approved private insurance companies
|Participation||47.1 million||43.8 million||13.1 million (27% of Medicare enrollees)—up from 11.9 million in 2011||34.5 million in 1,041 private plans (2012)|
Note: 90 percent of Medicare enrollees have a form of supplemental coverage (Source: Medicare.gov)
- Medicare per capita costs: increasing above employer-sponsored coverage costs, especially in past decade
(Source: Kaiser Family Foundation)
- Medicare premium costs 2012: premiums vary by modified adjusted gross income (MAGI) of individuals/households with the majority paying the lowest
|Type of Monthly Premium||Amount of Monthly Premium|
|Part A monthly premium
(for people who pay a premium)
|Part A Late Enrollment Penalty||+10%|
|Part B monthly premium||$99.90 (MAGI income $85K individual/$170K joint or less) to $319.70 (MAGI above $214K individual/$428K joint)|
|Part B Late Enrollment Penalty||+10% for each full 12-month period that you could have had Part B, but didn't sign up for it|
|Part C monthly premium||Varies by plan|
|Part D monthly premium||Varies by plan from baseline set at MAGI less than $85K individual/$170K joint to $66.40 plus baseline for MAGI $214K individual/$428K joint);
higher-income consumers may pay more
|Part D Late Enrollment Penalty||Depends on how long you went without creditable prescription drug coverage|
- Per enrollee utilization of hospitals: Medicare enrollees use the system more frequently and with higher intensity than younger individuals
Percent of individuals with one overnight hospital stay, by insurance type and age:
(Source: Centers for Disease Control and Prevention, Summary Health Statistics for the U.S. Population: National Health Interview Survey, 2010)
|Under 15 years||15 - 44 years||45 - 64 years||65 years and older|
|Average length of stay in days (2009)1||4.5||3.7||5.1||5.7|
|Emergency department visits (per 100 persons, 2008)2||37.9||45.5||34.0||51.7|
1 Number, rate and average length of stay for discharges from short-stay hospitals by age, region, and sex: United States, 2009
2 CDC, Emergency department visits, by patient age, sex, and residence: United States, 2008
- Per enrollee prescription drug use: 2 in 5 Medicare enrollees are taking 5 or more prescription drugs, increases with age
|1 drug||2 drugs||3 - 4 drugs||5 + drugs|
|0 - 11 years||14.1%||4.6%||2.7%||0.9%|
|12 - 19 years||17.3%||6.9%||4.8%||0.9%|
|20 - 59 years||19.6%||11.4%||9.4%||7.9%|
|60 and over||12.0%||12.4%||27.3%||36.7%|
Source: CDC, Prescription Drug Use Continues to Increase: U.S. Prescription Drug Data for 2007–2008
- Medicare voting preferences: enrollees slightly more Republican than younger voters (based on 2010 election results)
|18 - 29 years||54%||39%|
|30 - 49 years||44%||47%|
|50 - 64 years||45%||48%|
|65 and older||43%||48%|
Source: Gallup, “Obama, Age, and the 2010 Vote,” June 22, 2010
National health reform: What now?
At Deloitte, we continue to explore and debate the key questions facing
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