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Midterm 2 Review

Plan payments increased from 95 to encourage entry

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Plan payments increased from 95% to encourage entry, especially in rural areas Regional PPOs and Special Needs Plans Currently Plans submit bids for Parts A&B services (estimated cost), which are compared to county benchmark If bid below benchmark: they receive bid and 75% of difference between bid and benchmark to enhance benefits and/or lower premium; 25% stays with Medicare program Medicare Improvements for Patients and Providers Act 2008 Private FFS plans must establish networks by 2011 in regions with 2+ network plans Medicare Advantage popular amongst middle class because it is cheaper compared with buying separate supplement package May have few more copayments If HMO, reduces choice of which doctors you can see Health Reform to MA Payments Benchmarks with change as follows: For counties with high FFS costs, benchmark will be 95% of FFS Counties with low FFS costs, will be 115% of costs Counties with middle FFS, will be 100& 0r 107.5% of costs Plans will be able to receive additional payments for receiving high quality marks Plans will be able to retain more or less of the rebate (difference between bid and benchmark) Part D
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Est. by Medicare Modernization Act Medicare Outpatient Drug Benefit began Jan 1, 2006 Drug benefit offered through private plans Stand-along prescription plans on outpatient basis Medicare Advantage plans- includes drug coverage Standard Coverage, 2012 (there are low income subsidies) Premium ~$30/month, higher for higher income people $320 deductible 25% co-insurance rate until $2,930 in total drug costs ($1,025 OOP) Coverage gap from $2,930-$4,700 in beneficiary out-of-pocket spending 5% co-insurance after $4,700 ACA will shrink the donut hole over time, most seniors won’t hit it Starting 2011, beneficiaries receive 50% off their (brand name ) drug costs in the gap By 2020, beneficiary spending in the gap will be 25% copay Reforms within Current Structure ACA’s provider centered initiatives ACO Episode-based payment (bundled, rather than separate for hospital, doc, follow-up, etc) Pay-for-performance metrics Patient Centered Outcomes Research Initiatives (comparative effectiveness research) Increase premiums and/or reduce coverage for high income retirees Move towards global payments and basing coverage on comparative effectiveness and cost effectiveness analysis Restructuring Medicare make a risk and income adjusted annual contribution, person decided to be a part of traditional Medicare, or purchase a private coverage plan that is at least as comprehensive MA Total contribution growth limited and thus sustainable Not automatically enrolled in Part A and B Consumers will be more price conscious and make price conscious efficient decisions Choose tighter managed care (supply side) or control own use on open market side with higher deductible From HMOs to ACOs Risk contracting Allocating responsibility to entities best able to control outcomes
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