Sunday, November 18, 2012

Weekend update

As we head into the second week of the Federal Benefits Open Season, Congress begins to buckle down to work on avoiding the fiscal cliff created by the end of the Bush tax cuts on December 31, 2012 and the default sequestrations created by last year's deficit reduction law. The Federal Times reports that leaders are upbeat.  Govexec.com reports that retiring Sen. Daniel Akaka (an alumni of the FEHBlog's law school George Washington) is warning Congress against adopting the Simpson Bowles proposal to place the FEHB Program on a voucher system. This squib caught the FEHBlog's eye:
Walton Francis, an independent consultant and author of Consumer's Checkbook  Guide to Health Plans for Federal Employees, said the federal government currently pays 70 percent of its employees’ health care premiums, which is “right square in the middle” of what large, private sector employers pay their for their employees’ care.
“It would be an arbitrary cut,” Francis said. “There’s no reason per se to make that reduction.”
Francis added that while some may favor such a cut, it could have the unintended consequence of motivating lower income federal workers to opt out of FEHBP in favor of the open-market exchange, which could in turn increase costs to the government. 
The FEHBlog agree but notes that federal employees who opt out in favor of the exchanges would not receive the government contribution unless Congress allowed the voucher to be used for exchange coverage. However, Congress in 2011 repealed an ACA provision that created such a free choice voucher for all employees in limited circumstances as a destabilizing measure.

On Friday, the Centers for Medicare and Medicaid Services released notices in the Federal Register (no press release) about Medicare Parts A and B premiums and beneficiary cost sharing for 2013. Oddly the announcements were made one month after the Medicare open season began on October 15. In a blog post, the CMS Acting Administrator explained that the monthly Medicare Part B premium will increase $5 to $104.90 for most beneficiaries.  Boston.com explains that for higher income beneficiaries (income over $85,000) the laddered premium (which already is substantially higher) will increase by "$42 to $230.80 a month, depending on income." The Acting CMS administrator also announced that

  • Medicare Part A Premium: Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. Only about 1 percent of people with Medicare pay a premium for Part A services—you need to have paid Medicare payroll taxes for 40 quarters of employment or be married to someone who did. For those few affected, the 2013 Part A premium is decreasing to $441, down from $451 in 2012.
  • Medicare Part A Deductible: This deductible is the cost to people with Medicare for up to 60 days of Medicare-covered inpatient services in the hospitals for each benefit period (a benefit period starts the day a patient is admitted and ends when the patient has been out of the hospital for 60 days in a row.)  This will increase to $1,184 in 2013, up from $1156 this year (an increase of 2.4%).
  • Medicare Part B Deductible: The deductible will increase to $147 in 2013, from $140. This is still $15 below the deductible in 2011.
  • HHS did issue a press release about a new consolidated government anti-tobacco website called betobaccofree.gov 

    Business Insurance reports "Aided by the move of more employees into lower-cost consumer-driven health care plans, group plan costs increased by just over 4% in 2012, the smallest increase in 15 years, according to a survey of more than 2,800 employers released Wednesday by Mercer L.L.C. in New York."  This is in line with the recent FEHBP increases which also are driven in part by enrollees moving to lower premium plans.

    Standard & Poors released its latest healthcare cost indices late last week:

    All nine S&P Healthcare Economic Indices posted a deceleration in their annual growth rates in September 2012. Professional Service Medicare and the Hospital Index posted their lowest annual rates since January 2005; additionally, the Hospital Commercial Index hit a new recent low with an annual growth rate of +5.12% - its lowest since May 2010. As measured by the S&P Healthcare Economic Commercial Index, healthcare costs covered by commercial insurance plans increased by 7.05% over the year ending September 2012, down from the +7.81% reported for August 2012. Annual growth rates in Medicare claim costs rose by 2.04%, according to the S&P Healthcare Economic Medicare Index, down from the +2.48% recorded in August 2012. The Professional Services Index annual growth rate was +6.13% in September 2012, down from the +6.67% August 2012 print. The Hospital Index’s growth rate fell to its seven-and-a-half year historic low of +3.84% in September from +4.54% recorded in August 2012.


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