Medicare Funding Warning

Mar 25, 2008

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  1. MedSuppPro
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  2. midwestbroker
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    I am sure the hospitals are all over this plan...

    They will be absorbing 68% of the cost savings (ie cuts in pay).

    Interesting that in this they are not touching MA plans. I was under the impression that they were reducing the capitation fees over the next 5 years.

    My question is that they average 13% more then it costs to insure a member then on original Medicare, but overall, does it save Medicare money with the transfer of risk (they are not subject to fraud by providers since Medicare is not paying the bill)?
     
  3. midwestbroker
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    I was thinking about this...

    Medicare has approx $33 Billion a year in fraud (I read that somewhere, anyone have any facts please post).

    If MA plans are over funded but can offset their over payments by reducing the fraud, then the seniors benefit by having richer benefits and lower out of pocket costs.

    That means by using the estimate above and the #'s of the attachment on the first post, MA plans would have to save Medicare $15.7 Billion a year in fraud and other admin fees to offset their overpayment.

    I need a hobby.
     
  4. sman
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    You guys do realize that these are PROPOSED changes don't you? They had some of the same proposed changes for the 2008 budget that weren't adopted. We're likely to see much of the same for the 2009 budget.

    I'm sure we'll eventually see some of these changes. Just don't know when. The one that just seems like a nightmare to me is the higher premium for Part D based on income. Can you imagine the nightmare this would be to administer from a carrier standpoint? Or an agent selling standpoint? For $50-$70 commission, it's just not worth it. I consider it a loss leader now. It definitely would be a loss leader in the future if we have to have 4-5 premium structures for the same plan.

    Midwest, good point on the fraud issue. If you find the numbers, let us know.

    MedSuppPro, thanks for posting the link.
     
    sman, Mar 26, 2008
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  5. midwestbroker
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    The problem with MA plans is that they are an easy target for media.

    I have looked around online for a bit and found a bunch of people complaining about it. There was an article that said MA plans will never offset the overfunding of them.

    BUT...

    If they ever go down, maybe the finance department will give them the same deal as Bear Stearns.
     
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