Wednesday March 14th, 2012

8-9am: Continental Breakfast (North 2nd floor mezzanine)

9-noon: Old Supreme Court Chambers (2nd floor)

Noon-2pm: Lunch & PM program

@ Central Presbyterian Church,

1660 Sherman St. (2 blocks North of the Capitol)

Meet your legislators and elected officials!

Senior Day is an opportunity for seniors to learn

more about current legislation. We urge all participants

to contact their legislators and invite

them to participate in the program.

Let your legislator know your concerns!

That you are interested! That you vote!

All State legislators and elected officials have been

invited to attend this event and briefly discuss issues

of importance to seniors.

A box lunch will be available for approximately

$10.00 at Central Presbyterian Church (1660

Sherman St. (2 blocks North of the Capitol) This

gives you an opportunity to get to meet with seniors

from around the state in a comfortable and informal

basis.

Questions or concerns, please call:

Colorado Senior Lobby at: 303-832-4535

To view the entire article, click here.

By Charles Fiegl, amednews staff. Posted Dec. 20, 2011.

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Washington — Congress is in a standoff over legislation that would prevent a 27.4% cut to Medicare physician payments in 2012.

House and Senate lawmakers are at odds with each other over temporary measures to stabilize Medicare pay rates and payroll tax cuts next year, part of a package of legislative priorities. After a bipartisan Senate agreement on the issue was rejected by House Republicans, the Obama administration said it would instruct Medicare contractors to hold off on processing physician claims starting Jan. 1 with the hope that Congress will reach an agreement soon after the new year.

The promised administrative delay offered little comfort to physicians and other advocates for Medicare beneficiaries who have been pushing all year for Congress to act. Physician organizations and patient advocacy groups expressed deep disappointment after the House blocked the Senate deal.

The impasse was cemented when the House voted 229-193 on Dec. 20 to disapprove of a Senate-approved, two-month freeze of current Medicare pay rates included in a two-month payroll tax extension package. Republicans in the House said they withheld their support because the length of the Senate agreement was too short and would require lawmakers to come back in the next congressional session and hash out yet another extension package by the end of February.

“A two-month patch is not what will give families, employers, doctors and the American people the long-term stability our country needs,” said Rep. Michael Burgess, MD (R, Texas). “America needs jobs and long-term solutions. I am committed to staying in Washington until the job is done, and I encourage the Senate to do the same.”

A week earlier, the House had passed a one-year payroll tax extension package that includes a two-year Medicare physician payment patch. That bill would increase Medicare rates by 1% in 2012 and by another 1% in 2013. But Democrats in the Senate would not support the House bill, objecting to budgetary offsets that would charge higher premiums to more higher-income seniors and cut funding for programs created by the health system reform law. Senate leaders said the two-month consensus, which passed overwhelmingly in the upper chamber, was needed to give lawmakers more time to come to an agreement about how to pay for a longer-term solution.

But enacting a bill with anything less than a one-year extension of the items included in the package would be irresponsible, said House Speaker John Boehner (R, Ohio). “It’s time to stop the nonsense.”

By rejecting the Senate two-month deal, Boehner and his fellow House Republicans called for the House and Senate to return to Washington between Christmas and New Year’s Day to hold a conference committee that could iron out the differences between the competing measures. After the Dec. 20 vote, the GOP leader said he planned to recess the House at the end of the day’s proceedings until after Christmas.

Senate Majority Leader Harry Reid (D, Nev.), however, said he would not recall any senators or appoint conferees until the House first adopted the two-month stopgap.

“I will not reopen negotiations until the House follows through and passes this agreement that was negotiated by Republican leaders and supported by 90% of the Senate,” Reid said. The showdown means the Jan. 1 Medicare cut officially will take effect unless one of the leaders substantially changes his position. The Senate is not scheduled to reconvene until late January.

The American Medical Association does not support either of the short-term remedies being debated by lawmakers. After passage of the two-month Senate package on Dec. 17, AMA President Peter W. Carmel, MD, criticized Congress for waiting until the last week of the legislative session, only to consider a temporary bill addressing Medicare’s flawed pay formula.

“Seniors and disabled citizens in Medicare, military families served by Tricare, and the physicians who care for them deserve better from our elected officials,” he said. “Patients and physicians legitimately fear that Congress will repeat the failure of 2010, when they missed multiple deadlines and Medicare bills went unpaid.”

Internists also sharply criticized Congress for jeopardizing access to medical care for seniors and prolonging the “recurring SGR nightmare” for doctors.

“Instead of replaying the tired old script of arguing over whether the cut should be delayed for two months or two years, or something in between, Congress must do the right thing and enact a permanent solution,” said Dr. Virginia Hood, president of the American College of Physicians.

Meanwhile, the Centers for Medicare & Medicaid Services announced it will hold physician claims for 10 business days starting Jan. 1. The Medicare agency, which similarly has held up processing in the past, would do so to avoid paying out claims at reduced rates and to give Congress more time to agree on legislation. If lawmakers cannot agree on a retroactive pay patch by the time claims processing starts up after Jan. 17, CMS will be forced to apply the 27.4% cut and then must automatically reprocess any paid claims at the higher rate if and when a solution is approved.

“The [Obama] administration is disappointed that Congress has failed to pass a solution to eliminate the sustainable growth rate formula-driven cuts and has put payments for health care for Medicare beneficiaries at risk,” CMS said in a statement. “We continue to urge Congress to take action to ensure these cuts do not take effect.”

The agency said the claims hold probably would have minimal effects on the operations of physician practices — assuming Congress acts fast after the new year — because contractors normally hold doctor payments for at least 14 calendar days.

There are many difficult legislative issues facing seniors in today’s rapidly changing world and highly charged political environment. This complex world and the often time sensitive nature of the local, state and federal legislative processes present challenges to any organization, especially a volunteer organization like the Colorado Senior Lobby. Recognizing this, the Senior Lobby recently decided to develop an organizational policy statement to serve as a guidepost for decision making as the organization considers positions on specific legislative proposals.  A Policy Committee has been formed and assigned the task of preparing the statement.  The policy statement is intended to inform public officials and others of the Senior Lobby’s general policy positions on a variety of issues of concern to seniors. The policy statement also will guide Senior Lobby decisions on which legislation and proposed legislation are appropriate for the lobby to consider for a position and will provide a framework for positions and actions on specific proposals.  The policy statement further is intended to be a tool to facilitate timely and effective discussion and decision making, while retaining the Lobby’s independence and flexibility.

With this understanding in mind, the Policy Committee has been making good progress.  As a first step, the committee prepared a new mission statement that expresses the core values and mission of Senior Lobby.  Based upon existing language in the bylaws, the mission statement is designed to serve as a basis for the policy statement.  It emphasizes Senior Lobby’s role of speaking out for seniors but also recognizes seniors are integral members of the whole community and are affected by that community.  Consequently, at times the Senior Lobby must remain cognizant of issues,  for example education and land use, that might not at first seem like they should be considered but affect other community members that may in turn also affect seniors.  The mission statement was recently presented to the Senior Lobby’s Board of Directors for approval.

The Policy Committee is continuing its work to develop an effective policy statement for the Senior Lobby.  The committee is now considering specific areas and issues of concern to the senior community and how they should be addressed in the policy statement.  Input from Senior Lobby members is welcome and appreciated.

Dwight Roinestad is a Colorado Senior Lobby At-Large board member and retired from the Social Security Administration.

17,000 Coloradoans Will Lose LEAP Benefits

Eileen Doherty

As part of the budget and government shut down negotiations, 17,000 Coloradoans will lose their Low Income Energy Assistance (LEAP) benefits.  The State of Colorado is receiving a 35% cut in federal funding for the LEAP program which starts November 1, 2011 and ends April 30, 2012.

This year the maximum gross income is based on 150% of poverty for this season. Previously individuals whose income was 185% of poverty were eligible. The Colorado Department of Human Services has started to notify households that will not be eligible for LEAP benefits starting November 1.  Applications were also sent to households that received assistance last season and who may still qualify.

To qualify, an individual must be a U.S. citizen and a resident of Colorado with a gross monthly income of less than $1361 (couple must make less than $1839).  There are no resource requirements.  Individuals must also pay heating fuel costs directly to an energy provider or pay the cost of heating their dwelling as part of the rent or in addition to the rent.

LEAP provides cash assistance to help Colorado families and individuals pay winter home heating costs.

To apply for LEAP, individuals must complete the LEAP application form and submit it to the County Department of Human Services.  Individuals must complete an Affidavit as proof of lawful presence in the United States.  Along with application, individuals must submit a copy of a valid picture ID; copies of proof of income for all members of the household; copy of a recent heating (not lighting) bill showing the company name, address and account numbers; and a copy of the recent rent receipt if heat is included in the rent.

Some counties are only accepting LEAP applications by mail or fax and will not accept walk-ins.  LEAP benefits are paid directly to the heating company, unless the individual pays heating costs as part of the rent.

Other benefits provided by LEAP through  the weatherization program can include repair or replacement of a home’s primary heating system such as furnace or wood-burning stove; refrigerator replacement, insulation in attics and walls, sealing air leaks, compact fluorescent light bulbs, energy audits, and storm windows and doors. The goal of weatherization is to reduce energy usage.

To qualify for weatherization, individuals must be receiving benefits from one of the following programs:  Temporary Assistance to Needy Families, Aid to the Needy Disabled, Old Age Pension, Supplemental Security Income, Medicaid and/or LEAP.  Call the Governor’s Energy Office at 1-888-206-2122 to locate a weatherization office near you.

Individuals needing assistance with either LEAP applications or more information for weatherization can call 303-333-3482.

Eileen Doherty, M.S. is the Executive Director of Senior Answers and Services and the Colorado Gerontological Society.  She has more than 35 years of experience in gerontology in administration, research, training and education, and clinical practice.  She can be reached at 303-333-3482 or at doherty001@att.net.

Do Not Forget to Mark Your Calendar

Senior Day at the Capitol

Planning is underway for the annual Senior Day at the Capitol March 14, 2012.  The coming 2012 legislative session promises to be one with much debate.  As legislative issues affecting seniors become known program phases of the event will be adjusted to include those issues and personalities.  A luncheon is being planned but has not been finalized at this time.  More details regarding the luncheon and program will be available later.

Relocating the State Unit on Aging

In a joint effort to meet the Governor’s call to serve Coloradans in a more efficient, effective and elegant way the Colorado Department of Public Health and Environment (CDPHE), Colorado Department of Health Care Policy & Financing (HCPF), and the Colorado Department of Human Services (DHS) have been working closely together to align the agencies’ infrastructure to decrease fragmentation and make the system easier to navigate for their clients and their families, especially those who need long-term services supports.

The goals of the realignment are to:

• Ensure that appropriate and necessary services are provided to clients:
• Ensure that services will be provided safely, timely, and with respect and dignity;
• Strengthen consumer choices in service provision;
• Create incentives to encourage best practice in service delivery;
• Create incentives for the use of less restrictive settings; and
• Ensure that taxpayer dollars are being used effectively and efficiently.

In August, 2011 the three departments met to discuss collaborative projects the three departments might undertake to make the delivery of services more effective, efficient and elegant for consumers.  A re-design of the long-term care system was selected as a priority project.

Initially, the departments focused on the Division for Developmental Disabilities (DDD) system based on a request from the Joint Budget Committee to examine the relocation of the DDD from the Colorado Department of Human Services (DHS) to the Colorado Department of Health Care Policy and Financing (HCPF).  Since many discussions occurred in recent years about the advantages and disadvantages of moving DDD from CDHS to HCPF the departments actually examined the system more broadly and decided to consider the impacts of relocation other long-term services and support programs as well.  Based on this review, and in response to the Joint Budget Committee’s request, HCPF and DHS submitted a report outlining a proposal to relocate the DDD, the State Unit on Aging (SUA) and the Children’s Habilitation Residential Program (CHRP) waiver from DHS to HCPF.

The SUA administers the Older Americans Act (OAA) and Older Coloradans Fund (OCF) monies that are allocated to the state’s 16 Area Agencies on Aging (AAAs).

The departments state that moving DDD, the SUA and the CHRP waiver to HCPF will not cause any services at the local level to change.  This recommendation is part of a larger effort to improve long-term services and support for persons who are disabled or aging in Colorado.

The departments have stated stakeholders will be involved in the design and development of this proposal, including individuals receiving services and their families, providers, advocates, the Legislature, and the Governor’s Office.  Over the next six to twelve months the departments will hold community forums to gather input from stakeholders and communities on outcomes and benefits they would like to see out of a combined department and programs.  The first forum was conducted November 16^th at the Fort Logan Mental Institution auditorium.

At the November 16 forum the auditorium was nearly filled to capacity.  Many attendees expressed dismay that they were not notified of the planned relocation until just days before the proposal was released.  A common comment concerned the plan being prepared before public comment.  Was this backwards?  Should public comment be invited first then a plan prepared?  Was this move a “done deal” arranged in secret and the public hearing just a formality?

The meeting time was rescheduled at least twice if not three times.  The Executive Directors scheduled their time to speak for only one hour and then left to attend another meeting.  The remainder of the meeting was handled by staff.  Participants were invited to call in on the telephone.  It was very difficult to hear those on the telephone and their comments or questions were not repeated fully.

Participants in attendance were invited to ask questions on a shared microphone.  Many questions were not heard by many in the audience due to low speaker volume.

Concerns were expressed that HCPF does not respond in a timely manner to questions and concerns directed to them by service providers and the community at large.  Among other concerns were that HCPF would decide to shift the $9 million in the Older Coloradans Fund to Medicaid to draw down federal match and that the OCF/OAA programs could get lost in the massive Medicaid system.  OCF/OAA programs are focused on funding services, advocacy, coordination and planning for the senior population.  Medicaid is an insurance company that reimburses providers, processes claims, and is focused more on accounting than advocacy.  Replacing OAA/OCF services with Medicaid would take the program in an opposite direction of the long supported concept of increasing flexibility in the use of the funds so the Area Agencies on Aging can better meet the needs in Colorado.  Not addressed in the proposal is the issue of livability and how the state will redesign the long term care system to recognize the impact of the environment on peoples’ ability to access services.

Need Help?

If you live in the Denver area and need help check out the Denver Regional Council of Governments (DRCOG) Network of Care website.  You will find information for providers, abuse prevention, fall prevention, announcements, Medicare information, a local calendar, publication and a host of other informational services.  Legislative information may also be found on the site.  Go to DRCOG.networkofcare.org and be in for a pleasant surprise.

Proposed Cuts to Medicare and Medicaid[1]

President Obama, has recently proposed $320,000,000,000.00 ($320 billion) in cuts to Medicare and Medicaid, in order to reduce the federal debt over the next ten years.  $248 billion of the reductions come from Medicare and $73 billion from Medicaid.  These cuts will be realized primarily by changing how the federal government pays health care providers, reducing payments to drug companies and by changing the way the government splits the costs of Medicaid with the states.  Currently, states and the federal government share the cost of Medicaid.  Typically, the federal government pays about two-thirds and the states one-third of the total.  One of the biggest proposed changes in the Plan is how the federal government will split Medicaid spending with the states resulting in a savings over the next ten years of approximately $15,000,000,000.00 ($15billion).

The proposals are part of a package to reduce deficits by more than $3,000,000,000,000.00 ($3 trillion) over 10 years.  Medicare and Medicaid insure more than 100 million people. The proposal would require new beneficiaries to pay higher deductibles before Medicare coverage of doctors’ services and other outpatient care kicks in.  In addition, the proposal increases Medicare premiums by about 30 percent for new beneficiaries who buy generous private insure to help fill gaps in Medicare.  Other provisions of the proposal increases premiums to higher-income beneficiaries, requiring certain new beneficiaries to pay co-payments of $100 per episode, defined as a series of five or more health visits not preceded by a stay in a hospital or nursing home, for home health care visits.  Other provisions affect payments to nursing homes, require doctors to get approval from Medicare for the most expensive imaging services, and require drug companies to provide additional discounts or rebates,

How Does the Governor Develop His budget?

The Governor’s State Budget, which is presented on November 1, is developed with all the different state agencies and cabinet members, the Office of State Planning and Budget (OSPB), using forecasting information on the different revenue streams and taxes coming into the General Fund, and focusing on campaign promises and increases in caseload.

The following information is based upon the workings of the various state agencies and the Governor’s budget office called the Office of State Planning and Budgets (OSPB).  The Legislature has their own economic and budgeting staff members, who work for the Joint Budget Committee (JBC).  This article is only addressing the planning which goes into the Governor’s annual budget.  In addition, this is focusing on a healthy fiscal analysis where a program may potentially request additional funds.

At the end of the legislative session in May of each year, the budget process for each state agency begins; but it is forecasting the budgetary needs for each line item and program in the Governor’s budget request two fiscal years in the future.  Example, at the end of the 2010-2011 legislative session, each state agency began working on revising their budget request for fiscal years 2012-2013 and any additional funding increases for fiscal year 2013-2014.  In the State agencies, the budget process never ends.

To visualize how the budgets get prepared the Colorado Department of Human Services (CDHS) will be used as an example.  Keep in mind that each state agency goes through a similar process as described.  An example of requesting an increase in the State Funding for Senior Services (SFSS) line that is housed within the Division of Aging and Adult Services will be used.

Towards the end of May or early June of each year, OSPB provides each state agency an approximate target figure or percentage that can be expected or projected for allocation in the future fiscal year.  In other words, each state agency is giving a ball-park figure for the final allocation projected for the fiscal year two years in advance of the current fiscal year.  This means in June of 2011, the State is developing the budget for the fiscal year beginning July 2013.  Typically the budget for each state agency is developed with program staff, upper management, and the agency’s budget office staff.

Program staff works with the internal agency budget staff and OSPB on the projection of the monetary needs for the program based upon historical data, previous expenditures, and requirements for Federal matching dollars, and caseload increases.  In the example of the SFSS, the Division of Aging and Adult Services would submit a proposal for the projection of additional dollars that will be needed in fiscal year 2013-2014.  This information is then shared with CDHS’s upper management and the internal agency’s budget office staff, who must weigh all the requests from each of the different Divisions against the target number/budget received from OSPB.  This is where it gets difficult, as each program has written up a document detailing why that program needs the additional dollars that may have been allocated to CDHS.  Upper management reviews the requests and prioritizes them based upon various needs, such as which ones are required by the Federal government to stay within their guidelines; which ones are a matter of  preservation of life and safety; which ones are based on caseload increases; and which ones are required due to previous state legislation or constitutional requirements.  This is typically when the programs are pitted against each other.  In the example of the Department of Human Services, it covers a very large array of programs for children, seniors, mental health, developmental disabilities, child protection, adult protection, child support, youth corrections, food assistance, job training, child care services, the mental health institutions, the group homes for developmentally delayed, vocational rehabilitation services, veterans nursing homes and refugee services, just to name a few.  As you can see if the state agency is only allowed to increase its overall budget by one percent, this is difficult to do with all the current needs for each program.  At this time CDHS management determines the most pressing needs for the different constituents and programs and develops a recommendation for OSPB.

Once each state agency develops their budget request, it is sent to OSPB by August.  At this time, OSPB reviews the budget documents from each state agency and tries to combine the requests while trying to maintain a balanced budget based upon the forecasts/projections.   The Governor presents his budget in early November to the Legislature’s budget committee and staff called the Joint Budget Committee.  You must remember, all this is happening before any of the fiscal projections are in for the next fiscal year.  Then in late November until early January the JBC will hear from each State Agency and ask questions regarding the nature of the requests. (This is called the JBC briefing and the Department’s hearing).    During November through April, the JBC staff is working on determining the legislature’s proposed budget.  It is in Colorado’s constitution that the budget be balanced each fiscal year.

So what happens if something changes within the programs that require additional funding after the fiscal year budget has been approved by the legislature and the Governor?  The program staff must request a “Decision Item” that may be an emergency, meaning it must be applied to the current fiscal year to maintain health and safety of citizens, or applied to the next fiscal year due to “new information” which can be an unexpected increase in caseload or additional federal dollars that the state must match at a specified percentage rate for the state to access or “pull-down” the federal money.

To get back to the example of the State Funding for Senior Services (SFSS) budget to request an increase, there are many levels in which the request can be denied in the process.  It can be denied at the CDHS office level, at CDHS management team level, at OSPB, or by the Governor, or during the JBC process.  This is not to say that the request is not needed or important, it is just that often, higher priorities “bump” the SFSS increased funding request out of the final budget request.

As you can see, it is not an easy process to get additional funding requests through the entire process and funded.  This same process is required if any programs are recommended to be reduced or cut by the Governor’s budget.

Homestead Exemption at Risk, Again

Governor John Hickenlooper has recommended a $18.7 billion 2012-12 budget that puts him in direct opposition with House Republicans over a property-tax break for seniors that costs the state nearly $100 million a year.  In addition to marking the fourth year in a row without salary increases for state workers the governor is recommending that the state suspend for one year the Senior Homestead Exemption.  Lawmakers have suspended the tax exemption for the past two years.

The governor’s budget also calls for some relief to poor seniors by adding $9.5 million to an existing program that rebates property taxes paid, either directly or through rent, and for heating costs paid by low-income Coloradans ages 65 and older.  The new money for the program would more than double its current funding.  Unlike the Senior Homestead Exemption which rewards rich and poor alike, the property-tax and rent rebate program helps the poorest seniors.

The governor also is proposing a long term fix for the Senior Homestead Exemption that would allow it to be triggered only in years in which growth in the state’s personal income exceeds that of fiscal year 2007-08, the most recent high-water mark for state revenue.

2012 General Assembly To Convene January 11

The General Assembly convenes Wednesday, January 11, 2012.   Before the General Assembly  convenes members must be aware of an important deadline.  Members may not introduce more than five bills.  Of the five bills, excluding appropriations and interim bills, not more than two bills may be requested after December 1, 2011.

Throughout the session are deadlines for the introduction of bills, final passage of Senate bills in the Senate and final passage of House bills in the House, introduction of the Long Bill in the House, and a list of other deadlines too long to list here.  For additional deadline information visit the Colorado General Assembly home page at www.leg.state.co.us.  From there it tests one’s skill at clicking.  Under Service Agencies click on Legislative Council.  Once on the Legislative Council page and about one-half down under “Quick Links” click on “Legislative Schedules.”  At that point you are on the home stretch.  On the Schedules page click on the link to “2012 Deadline Schedule” and if everything worked okay you will see the 2012 legislative calendar.

.

The General Assembly is slated to adjourn May 9, 2012.

Colorado Senior Lobby

655 North Broadway, Suite 580

Denver, Co 80203

Colorado Senior Lobby, Inc.

A nonprofit, non-partisan, all volunteer organization

I will support responsible legislation:

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Email Address___________________________    Preference to Receive Newsletter  Email______  or  Regular Mail ________

Address____________________________________________________________________________________________

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Make check payable to Colorado Senior Lobby

655 Broadway, Suite 580, Denver, CO 80203   Telephone: 303 832-4535

That will take you to Step 1 of 4: Enter Information.

Under “How do you get your Medicare Coverage?” click on the appropriate box.  For most people, that is “Original Medicare.”  Under “Do you get help from Medicare or you state to pay your Medicare Prescription Drug Costs?” you will probably click on the next to last box (“I don’t get any Extra Help”).

Step 2 of 4: Enter Your Drugs

Under the heading Name of Drug:  you will then begin typing the names of your prescriptions.  As you are typing a list should appear with possible matches.  If you don’t see the list, then you should double check the spelling.  Once you have a match, then a tab will come up that requires you to enter your dosage and quantities.

After you have entered your first drug, you may then enter the rest.  However, after entering your first prescription, on the right side of the page, you will see a Drug List ID.  It is a good idea to write this number down, as well as the date and zip code.  If you have to come back at a later time, you will not have to repopulate your drug list.

Once you have entered all of your drugs, click on My Drug List is Complete, at the bottom of the page.

Step 3 of 4:  Select Your Pharmacies

You may select as many as you wish, or just Continue to Plan Results.

Step 4 of 4:  Refine Your Plan Results

Under the Summary of Your Search Results, if you are just searching for a Prescription Drug Plan, click on the first box.

Then Continue to Plan Results.

You are almost done.

On this page, you will see Your Plan Results.

Scroll down to Prescription Drug Plans.

These plans are listed in order of which one will give you the least out of pocket expense, including premiums, deductibles and co-pays.

If you click on one of the plans, it will bring up Your Plan Details.  This is a really good page that breaks down the plans costs throughout the year.   If you feel this is the plan for you, you can immediately enroll on line or call the 800 number listed.

Now that wasn’t so hard, was it?

Remember, this is a projection based on the drugs you are currently using.  If you add a prescription or eliminate one, then your picture can and will change.  That is why you should go through this process every year.  Even if your prescriptions don’t change, there are new plans and changes to existing ones every year.

If you have gone through this process and still need assistance (or just don’t feel like doing it on your own), feel free to call me (or email me a list of your prescriptions), and I will do it for you.  I don’t plan to have too many appointments this week, so I can take care of last minute questions.

My cell phone number is 303-489-3732, and my email is: george@coloradomedicareclassroom.com

The news comes on the heels of GOP Presidential candidate Mitt Romney’s recent call for creation of a “premium support” option that would let seniors choose between traditional fee-for-service Medicare or a defined amount of money that they could use to shop for a private plan in a federally-sponsored Medicare exchange marketplace. Romney’s proposal is a cousin of the privatization plan proposed by Rep. Paul Ryan, and endorsed by the House of Representatives earlier this year.

Even if the Super Committee process stalls, the future of Medicare will be a key issue in the 2012 Presidential race, and any restructuring of the program would impact billions of dollars of healthcare spending and tens of millions of beneficiaries. How would privatization impact seniors? How would benefits change, and what would it mean for seniors’ cost of healthcare? Here are answers to five key issues.

1. What are Medicare premium supports and vouchers, and how would they change the current Medicare program?

Proposals for Medicare premium supports and vouchers all have one thing in common: They would transform Medicare from a program of defined benefits to one of defined contribution. Much like the transition from defined benefit pensions to defined contribution 401(k) plans, the change would shift risk from an institution (the federal government) to individuals (seniors). Medicare today promises to deliver a specific set of benefits to seniors; premium supports and vouchers would provide a defined government contribution toward whatever healthcare cost they incur in the private market.

But there’s a significant difference between premium supports and vouchers. Vouchers could be set purely on the basis of meeting federal budget-cutting goals. Premium supports usually take into account some measure of the cost of purchasing private coverage.

Romney hasn’t released details on his Medicare proposal, but it appears to most closely resemble the proposal of the Bipartisan Policy Center’s Debt Reduction Task Force, which was chaired by Alice Rivlin, the Clinton Administration’s budget director, and former Republican Sen. Pete Domenici.

The Rivlin-Domenici plan would limit the government’s per-beneficiary financial contribution to a formula tied to Gross Domestic Product plus a percentage point. In this sense, Rivlin-Domenici really is more a voucher than a premium support.

2. Would privatization cut healthcare costs and shrink the budget deficit?

Vouchers would reduce federal Medicare spending by capping benefit payments. But the assertion that privatization can reduce overall healthcare costs is ideological; the argument here is that unleashing competitive marketplace forces will lead to innovation and cost savings.

Yet traditional Medicare has a much stronger record of controlling costs than the private insurance market. As the largest U.S. purchaser and regulator of healthcare, Medicare has purchasing clout far beyond what any single private insurance plan could exert.

An analysis of federal data by the Center on Budget and Policy Priorities (CBPP) found that between 1970 and 2009, Medicare spending per enrollee grew by an average of 1 percentage point less than private health insurance premiums, or one-third less during that period.

Private Medicare Advantage plans have been gaining marketshare, but they don’t reduce federal health spending. In fact, Advantage plans currently are reimbursed by the federal government at 114 percent of traditional Medicare rates — a payment scheme that was put in place to encourage private insurers to participate in the market and to help them compete with traditional Medicare. (The Obama Administration’s health reform law freezes those payments Advantage calls for gradually reducing those payments over a period of years, ultimately equalizing reimbursements with traditional Medicare.) Medicare Advantage plans also have benefited by marketing to healthier seniors who are less costly to serve.

“Premium support is just another approach to privatizing Medicare and moving away from the traditional fee-for-service plan,” says Edwin Park, vice president for health policy at CBPP. “A lot of the arguments about lower cost and efficiency in private plans just don’t hold up.”

3. Would seniors have to pay more out of pocket?

Yes. The Congressional Budget Office (CBO) estimates that under the House-endorsed Ryan plan, the total cost of providing benefits to a typical 65-year-old in 2022 would be $20,500. The government would contribute $8,000 of that amount, with beneficiaries paying the remaining $12,500 — more than twice what they would pay under traditional Medicare ($5,630).

The Rivlin-Domenici proposal hasn’t been scored by CBO, but if its voucher didn’t keep pace with rising healthcare costs, beneficiaries who want to stay in traditional Medicare would have to cover the difference.

The alternative would be to enroll in a private plan with lower premiums. But those plans might be allowed to keep costs down by offering less generous benefits, restricting provider networks or requiring higher cost-sharing via co-pays or higher deductibles. Much would depend on the specifics of how new rules and regulations would be drafted that govern the private plans.

4. How are these proposals different from the current Medicare Advantage program?

Medicare Advantage lets seniors opt for an all-in-one private plan that covers hospitalization, doctors’ visits, drugs and other benefits. But the private plans must commit to provide services at least equal to those provided under traditional Medicare. Many of the new privatization plans would permit variation in benefits and premiums.

5. Wouldn’t these Medicare exchanges resemble the exchanges being created under Obama’s healthcare reform?

While there are some similarities, the exchanges under the Affordable Care Act (ACA) would provide support designed to keep up with health insurance inflation. Also, the ACA exchanges are designed to cover millions of uninsured Americans, while proposals like Rep. Ryan’s actually eliminate traditional Medicare over time, and force seniors to enroll in private plans.

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The author is a Reuters columnist. The opinions expressed are his own.

• You can no longer be arbitrarily dropped from coverage by your insurance company simply because you get sick – protecting the 165 million Americans with private health insurance.
• Your insurance company can no longer place a lifetime limit on your coverage – protecting the 165 million privately-insured Americans.
• Your insurance company can no longer place low annual limits on your coverage – also protecting the 165 million privately-insured Americans.
• If you are under 65 and in a new plan, you are now receiving free key preventive health services – benefiting up to 88 million Americans by 2013.
• Your insurance company must now spend at least 80 percent of your premium covering medical services – rather than CEO pay, profits, and administrative costs. 165 million privately-insured Americans are now receiving the benefits of protecting the value of their premium dollar as a result.
• Your insurance company must now publish on the Internet justifications for any premium increases they are seeking that are more than 10 percent and outside experts will publicly evaluate whether the increases are justified – protecting the 165 million privately-insured Americans.

IF YOU ARE A SENIOR

• You are now receiving a 50 percent discount on brand-name drugs when you are in the Medicare Part D ‘donut hole’ coverage gap. Nearly 1.3 million seniors have already received the discount.
• You are now receiving free key preventive health services, such as mammograms and colonoscopies, under Medicare. Nearly 19 million seniors have already received one or more free preventive services.
• You are now receiving a free Annual Wellness Visit under Medicare. 1.3 million seniors have already taken advantage of the new free Annual Wellness Visit.

IF YOU ARE A YOUNG ADULT

• You can now stay on your parents’ health plan until your 26th birthday, if you do not have coverage of your own. Because of this provision, 1 million additional young people have gained insurance over the last year.

IF YOU HAVE A CHILD

• If you have a child under age 19, they can no longer be denied coverage by an insurance company for having a “pre-existing condition.” Up to 17 million children with pre-existing conditions are now protected from discrimination.

IF YOU OWN A SMALL BUSINESSES

• If you are among 4 million eligible small businesses, you can receive tax credits if you choose to offer coverage to your employees – covering 35 percent of the cost of coverage.

IN 2014, YOU ALSO GAIN ADDITIONAL PROTECTIONS

• For all adults and children, you can no longer be denied coverage by an insurance company for having a “pre-existing condition.”
• If you are a woman, you can no longer be charged a higher premium simply on the basis of gender.
• Your insurance company can only vary premiums based on age by a maximum of a 3-to-1 ratio.
• You are protected by a cap on your out-of-pocket costs in your private health plan.

[See 10 Ways to Boost Your Social Security Checks.]

There are complex links between annual changes in Social Security and Medicare insurance premiums. Depending on your annual income and when you began Medicare, much or all of your COLA gains could be eaten up by higher Medicare premiums.

The Social Security COLA is based on a version of the U.S. Consumer Price Index tailored for people who work. It’s called the CPI for Urban Wage Earners and Clerical Workers, or the CPI-W. Every year, Social Security looks at the CPI-W average during the third quarter of the year, compares it with the average during the previous year’s third quarter, and designates any percentage increase as the following year’s COLA.

Following a big surge in oil prices in the summer of 2008, the CPI-W spiked and led to a big 5.8 percent COLA increase for 2009—the program’s largest in 25 years. Oil prices later declined and so did overall inflation. In both 2009 and 2010, the third-quarter average for the CPI-W was less than it was during 2008’s third quarter. As retirees know all too well, this meant no COLA in 2010 or 2011.

[See Zero Social Security COLA Again for 2011.]

Since last summer, however, energy and other prices have risen. At the end of July, the CPI-W was 4.1 percent higher than in July 2010, and the index stood at 222.686. This is 3.3 percent higher than the CPI-W average of 215.495 during the third quarter of 2008.

Prices for crude oil have plunged in recent weeks, so it’s possible that the CPI-W would dip during the next two months. However, food prices have been rising, and prices for imported goods are up 14 percent from a year ago, due primarily to the diminished purchasing power of a weaker U.S. dollar.

If the COLA does rise by a few percent, it would also trigger the first increase in three years for Part B Medicare premiums. Parts A and B, commonly known as traditional Medicare, cover hospitals plus physician and outpatient expenses. There is no premium for Part A coverage. The government backs Part B premiums directly out of a beneficiary’s Social Security payment.

There is a “hold harmless” clause that prohibits Social Security payments from declining from one year to the next. So, the absence of a COLA in 2009 and 2010 meant that there could be no increase in Part B premiums for existing beneficiaries. This premium has thus been frozen at $96.40 a month for about 75 percent of beneficiaries.

Another provision of the law requires Part B premiums to finance 25 percent of the costs of providing covered services. With premiums frozen for most beneficiaries but healthcare costs still rising, Medicare had to look to the new and higher-income beneficiaries to pay bigger premiums to maintain that 25 percent finance level.

[See Medicare Drug Premiums Won't Rise in 2012.]

New enrollees in 2011, for example, pay a monthly Part B premium of $115.40 if they earned less than $85,000 a year ($170,000 for couples). Rates for higher-income earners rise substantially, and the wealthiest beneficiaries pay premiums approaching 80 percent of their costs, not 25 percent.

“In most years, a significant portion of the cost-of-living increases received by most Social Security beneficiaries” is used to pay for higher Medicare premiums, Rudolph G. Penner wrote in a recent study for the Urban Institute. Social Security benefits thus are “not keeping up with inflation, and for those retired a long time, the real value of the net benefit can erode significantly.”

Looking ahead, Penner said in the study, “the rapid growth in healthcare costs is leaving the entire population with relatively less to spend on non-health goods and services, and the elderly are affected the most because so much more of their income goes to healthcare.”

One of the impacts of raising Part B premiums would be to make it more attractive for beneficiaries to seek coverage through a Medicare Advantage (MA) policy. MA policies compete with traditional Medicare. Dan Mendelson, head of Avalere Health, a Washington, D.C.-based healthcare consultancy, says he projects MA premium increases in 2012 to be modest. Open enrollment for 2012 plans begins October 15 and extends until December 7. Details on any changes to the 2012 COLA and increases in Part B premiums are expected to be announced later in October.

Mendelson says he expects lots of insurance-plan changes next year, particularly involving the use of preferred pharmacy providers. By requiring policyholders to use a certain pharmacy, he explained, an insurer can drive lower costs at that pharmacy. “Consumers are going to have to be thinking about their out of pocket liability” when they shop for 2012 coverage, he said, “and also the fact that there will be more innovative products in the marketplace.”

Twitter: @PhilMoeller

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According to the Medicare Rights Center (MRC), a non-profit consumer advocacy group, Medicare Advantage plans have major deficiencies when compared to original Medicare coupled with Medicare Supplement insurance, also known as Medigap. The MRC cites that costs for skilled nursing care, home health care and for hospitalizations run much higher in Medicare Advantage plans than they would with traditional Medicare coverage with supplemental insurance benefits provided by a private Medigap plan. In addition, The MRC reported that Medicare Advantage plans lack stable protection because many of these plans can abruptly stop coverage and restrict the use of physicians, hospitals and other providers and may make it difficult to obtain emergency or urgent care.

According to Lucas Burton a partner with Largo, Florida based, Golden Age Providers; there isn’t a day that goes by that we don’t receive a phone call from someone asking us to help get them out of a Medicare Advantage plan. The problem stated Burton; these folks don’t realize that they can’t just leave these Medicare Advantage plans because they aren’t happy with them. They may very well have to wait until the Medicare Annual Election period in the fall of each year to leave their MA plan and rejoin original Medicare. There are exceptions to this rule by which a senior may be granted a Special Election Period, but these are very rare stated Burton.

Experts across the country agree that the only way for a retiree to main control of their healthcare would be to stay in the original Medicare program and to purchase a Medicare Supplement policy from a private insurance carrier. Medicare Supplement plans, also known as “Medigap” have been standardized since the early 1990’s and are easily compared since all similarly lettered plans provide identical coverage. Medicare Supplement plans allow seniors to choose any hospital or physician and don’t require pre-approval.

Just like everything else, there is no “free lunch” and seniors need to realize that little to no premium now, might be a bad thing later.