Get past the spin from left and right, from Fox and MSNBC, from Romney and Obama, from HHS and CMS press releases, and read it for yourself. Here are key pieces of wording from the October 2010 memo from the assistant Medicare actuary explaining how the Patient Protection and Affodable Care Act "as amended" affects you on Medicare
"For individuals enrolled in the traditional (FFS)Medicare program, the expenditure reductions under (PPACA such as actions taken by Payment Advisory Board and legislated cuts in hospital reimbursements) are expected to cause a reduction in the average coinsurance amounts… For Part A, the savings under (PPACA) would result in lower beneficiary coinsurance payments for inpatient hospital and skilled nursing care. These effects are the result of the application of the productivity adjustments to the Medicare “market basket” payment updates.
"For Part B, the average reduction in beneficiary coinsurance is significantly larger than for Part A, since almost all Medicare enrollees have physician or other Part B services in a year, versus a minority with Part A services.
"The estimated (PP)ACA savings result in an associated reduction in average annual coinsurance payments that are estimated to reach $47 for Part A and $160 for Part B by 2019.
"(The analysis) shows the estimated impact on Part B… standard premiums resulting from PPACA on a monthly and annual basis. Expenditure reductions under Part B translate directly to lower financing requirements from general revenues and beneficiary premiums, since financing is re-established annually to match program costs. In addition, Part B will receive revenues from the fees on manufacturers and importers of brand-name prescription drugs. Since no changes were made in the existing statutory provisions for Part B beneficiary premiums and general revenue matching amounts, which by law are set each year at a level adequate to finance Part B expenditures, these additional revenues would result in an excessive level of financing for Part B and an unnecessary accumulation of account assets. To maintain Part B assets at an appropriate contingency level, it would be reasonable to establish a negative “premium margin,” which would reduce beneficiary premium rates and matching general revenues by an amount equal to the new revenues from prescription drug fees.
"The estimated Part B premium impacts shown below reflect such reductions.
CY Monthly Annual
2010 $0.00 $0
2011 $1.60 $19
2012 $4.40 $53
2013 $6.00 $72
2014 $7.50 $90
2015 $9.40 $113
2016 $11.60 $139
2017 $14.10 $169
2018 $16.00 $192
2019 $18.20 $218
"The standard premium impacts shown above are for a typical beneficiary. Beginning in 2007, beneficiaries with incomes that exceeded a certain threshold were required to pay higher premiums to receive Part B. PPACA froze the thresholds at the 2010 level through 2019. The result is that there will be steady, incremental increases in the number of individuals subject to the higher premium rates through 2019. By 2019, it is estimated that 10 percent of Part B beneficiaries will be subject to the higher Part B premium…
-- Dennis Byron
NOTES:
- I am posting the highlights of the assistant actuary's analysis in three parts for length reasons. This Part 1 post looks at just Fee for Service beneficiaries (about 75% of us) and the second post looks just at Medicare Part C beneficiaries (about 25% of us). That is the way the assistant actuary's analysis is organized. The third post combines the analysis.
- I have lightly edited the analysis' wording for flow and for consistency with terminology on this blog; all such edits are in parenthesis (for this reason, I have deleted the rare uses of parenthesis by the assistant actuary). I am not including the assistant actuary's analysis of Part D because that has been covered extensively on this blog (for example, here and here, using this and other sources). I am underlining the key information in my opinion.
