Annual announcement updating Medicare beneficary payments reminds us how antiquated Medicare fee-for-service (FFS) really is. It is on life support.
The Centers for Medicare and Medicaid Services (CMS) released its annual updates for traditional Medicare Part A and B premiums deductibles, and cost-sharing. There was a huge surge in Part B premiums monthly by 10%. The Social Security cost-of-living increase was just 2.8% or about $56 per month on average. The Part B premium increase will eat up $18 of that.
When this comes out, I reflect on a few things.
How antiquated traditional Medicare fee-for-service (FFS) really is.
It is stuck back in the 1950s/1960s and the 80-20 indemnity world. While CMS champions how many providers are now in a value-based reimbursement program, there is nothing stunning there — true savings (if any) is a rounding error in the $1 trillion plus behemoth. Traditional Medicare is on life support. It is a place of high costs, poor quality, fraud, waste, abuse, and inefficiency.
There is a huge hole in the inpatient hospital benefit that bankrupts seniors each year.
Trying to figure out what a senior will pay in FFS for each “hospital benefit period” is no easy task. In some ways, it doesn’t matter as one long hospital stay could bankrupt someone anyway.
The deductible covers up to the first 60 days of each visit ($1,736), a whopping $434 per day co-pay is paid for each day from 61 to 90, and each lifetime reserve day has an even more outlandish $868 per day. There are just 60 of these days over your lifetime, so you can never be too sick.
Our dottering Aunt IRMAA comes to town around this time of year.
IRMAA stands for Income-Related Monthly Adjustment Amount and is my number 1 healthcare acronym in a world that is filled with acronyms. As familiar as I am with healthcare lingo, I always have to look this one up!
In effect, it is an extra tax on “wealthier” people. It impacts anyone with modified adjusted gross income over $109,000. There is one for Part B and one for Part D. Your monthly premiums in both programs rise very progressively as your income rises over that amount. Of course, these days it is not hard to have income over $109,000. Yet another reminder of the twisted approach to funding healthcare in the U.S.
Summing it up
So, the announcement shows us how behind the times traditional Medicare really is. In lieu of instituting real reform in healthcare generally or in Medicare specifically, Medicare trods on — using its walker to crush Aunt IRMAA and other seniors each day, updating the premium, deductible, co-pay, co-insurance numbers each year as we amass in rough measure about $100 billion more in spending each year.
#medicare #medicareadvantage
— Marc S. Ryan
