Any person (or parent of a young person) with special needs who receives Medicare or Medicaid benefits (as well as seniors or other individuals who currently or will soon receive these benefits) should be aware of how decisions made during this year could affect the medical services they receive and their out-of-pocket medical costs.
In December of 2010, the House of Representatives and the Senate voted to pass H.R. 4994, the Medicare and Medicaid Extenders Act of 2010. President Obama signed it into law on December 15. Had it not become law, the amount physicians receive for Medicare claims would have been reduced by 25percent, and ultimately, it would have affected Medicare beneficiaries. Other aspects of medical care and cost are also affected by this law.
How this extension affects physicians and other health care providers
When a bill for medical services is sent to Medicare for payment, it's for an amount the provider feels is a fair price for the services. However, Medicare uses a formula to determine the reimbursement level for the services and makes an adjustment to the fee charged. Many people commonly refer to the adjusted fee as the allowable or approved amount.
Medicare pays 80% of this allowable amount. The balance is paid by the patient and/or a supplemental health insurance plan the patient has purchased.
Many physicians believe Medicare's process has not kept pace with the cost of providing services to patients. Yet without this one-year extension, their payments would have been reduced, a move in the opposite direction of what they would like to see. And if nothing is done to change the system in the coming year, the reduction will take effect on January 1, 2012,
How it could affect Medicare beneficiaries
Physicians have three options.* They may continue to be a Medicare participant (offer services to Medicare beneficiaries) regardless of any changes that are or are not made to the Medicare system, OR serve Medicare beneficiaries on a case-by-case basis (select which Medicare beneficiaries they'll accept as patients), OR become a private contractor (have no patients who are Medicare beneficiaries).
Obviously, if fewer physicians accept Medicare beneficiaries as patients, it will be more difficult for them to find doctors to take care of their needs--doctors who have the skills they're looking for and who are located within a reasonable distance from their home. Out-of-pocket expenses (doctor bills, gas/travel, etc.) might increase, and premiums paid for a supplemental insurance policy may rise to offset the insurance providers' higher cost of doing business.
During 2011, the American Medical Association, health care providers, and other medical associations, along with politically active individuals who receive Medicare benefits or want to improve the system for all Americans, will be working to encourage Congress to find a long-term solution to the current situation.
Managing the effects
Consider how your financial situation may be affected by changes in Medicare coverage. "Managing your finances is more important now than ever before." says Chris Collier, CLU, a Special Care Planner with The Paragon Financial Group (www.chriscollierclu.com) in Cincinnati, Ohio, a general agency of Massachusetts Mutual Life Insurance Company (MassMutual). "In recent years, more and more responsibility has been shifted to individuals and families. They must take active roles in managing their financial wellness. It's important to understand all of your options and to know--or at least try to anticipate--what changes may come about, then make decisions based on that knowledge."
The Medicare issue is just one example of how changes in our society can affect us. How will this be resolved? What other changes will the future hold? What can we do to try to manage the impact these changes will have on us? …