- 2022 Medicare Cost-Sharing Rates Released
- Increased Medicare Costs for 2022 – A Look Behind the Numbers
- New Analysis Provides More Evidence of Wasteful Medicare Advantage Overpayments
- CMS Revises Visitation Rules for Nursing Facilities
- The Center for Medicare Advocacy Is Grateful for a 3-Year Grant Award From RRF Foundation For Aging to Support Our Mission
- Our Strength is Our Community
On November 12, 2021, the Centers for Medicare & Medicaid Services (CMS) released the 2022 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs.
Each year, Medicare premiums, deductibles, and copayment rates are adjusted according to the Social Security Act. For 2022, the cost-sharing amounts for both Medicare Part A and Medicare Part B are higher than the 2021 amounts. Part B, in particular saw a surprising increase, some of the reasons for which are explained in the next article.
Since 2007, a beneficiary’s Part B monthly premium has been based on his or her income. Increased income-related monthly adjustment amounts (IRMAA) affect roughly 7 percent of people with Medicare Part B. The Part B total premiums for high income beneficiaries have also increased for 2022.
For all the 2022 numbers, see https://www.medicareadvocacy.org/medicare-cost-sharing-rates-premiums-deductibles/
With the release of the 2022 cost-sharing, premium and co-pay amounts, many noted the significant increase in the monthly Part B premium, which grew from $148.50 in 2021 to $170.10 in 2022. The Part B deductible is increasing $30, to $233. All of the 2022 figures are available in a CMS Fact Sheet posted here; and as noted above, at https://medicareadvocacy.org/medicare-cost-sharing-rates-premiums-deductibles/.
Inside Health Policy (Nov. 12, 2021) notes that senior CMS officials explained that
the 5.9% adjustment in 2022 Social Security benefits will more than cover the increase for most Medicare beneficiaries.” According to an article published by AARP (updated Nov. 15, 2021), the Social Security cost-of-living adjustment (COLA), the largest in 30 years, “is estimated to average $71.40 per recipient. So even after the increase in the Medicare Part B premium, most Social Security recipients, whose Part B premiums are typically deducted from their Social Security benefits, will still see a net increase in their monthly check.
Further, according to Inside Health Policy (Nov. 12, 2021),
CMS says half of the reason for the largest Medicare Part B premium increase in 15 years is due to building up the Part B Medicare trust fund to take into account the potential cost of the controversial drug Aduhelm — in case CMS approves its coverage — while the other half is due to usual cost growth combined with the need to make up for Congress’ move to decrease premiums in 2021.
With respect to Congress’ previous action to address premiums, in late 2020 a bipartisan spending deal included a provision aimed at keeping 2021 Part B premiums in check, which were projected to increase by as much as $50 for some beneficiaries, largely due to Medicare spending on the COVID pandemic. As noted in the above-referenced AARP article (as well as another AARP article from October 2020), “because of the pandemic, Congress took action to significantly lower the expected Part B premium increase” for 2021, and thus “the Part B premium increased only $3 a month. Congress directed CMS to pay back that reduced premium over time and that payback is starting in 2022.”
The impact of the high cost of prescription drugs on Medicare spending is clear – including anticipated costs for the potential coverage of just one drug under Part B. The day that CMS released the 2022 figures, House Energy & Commerce Chair Frank Pallone issued a statement calling on Congress to address the high cost of prescription drugs:
Today’s announcement from CMS confirms the need for Congress to finally give Medicare the ability to negotiate lower prescription drug costs and establish a rebate for drugs that increase faster than inflation. Skyrocketing drug prices not only make it harder for seniors to afford the lifesaving drugs they need, but also drive up their health care premiums for doctor’s visits and outpatient care. This double financial whammy simply cannot continue, and that’s why Congress must pass the bicameral Medicare prescription drug agreement that was included in the Build Back Better Act last week. We simply cannot wait any longer to provide real relief to seniors.
Congress is poised to pass legislation that could make an impact on the high cost of at least some drugs. But when assessing rising Medicare costs, policymakers continue to ignore the fact that overpayments to Medicare Advantage (MA) plans negatively impact Medicare’s finances. The Medicare Payment Advisory Commission (MedPAC) noted in a March 2021 report to Congress that Medicare payments to MA plans average 104% of spending in traditional Medicare. As discussed in another CMA Alert this week, MA plans receive billions of dollars in overpayments based on a flawed payment system (see article below). The Kaiser Family Foundation (KFF) released a report in August 2021 outlining how Medicare spending is higher and growing faster per person for beneficiaries in MA than in traditional Medicare. Despite most plans submitting bids below the local benchmarks, KFF notes that the MA program “has never generated savings relative to traditional Medicare” and while higher payments have led to coverage of some limited extra benefits for plan enrollees, “the higher payments have also led to higher Medicare spending than would have occurred under traditional Medicare and higher Medicare Part B premiums paid by all beneficiaries, including those in traditional Medicare.”
In short, by addressing the high cost of prescription drugs and reining in overpayments to private Medicare Advantage plans, policymakers can keep Medicare costs – including those borne by all beneficiaries – lower. They can also use such savings, as intended by the Build Back Better Act, to reinvest in Medicare by expanding benefits for all beneficiaries, which would be an important step towards leveling the playing field between traditional Medicare and Medicare Advantage. Policymakers just need to find the courage to do so.
Kaiser Health News recently published an article by Fred Schulte titled “Researcher: Medicare Advantage Plans Costing Billions More Than They Should” (Nov. 11, 2021). Schulte highlights research by Richard Kronick, U.C. San Diego, analyzing “newly released Medicare Advantage billing data estimat[ing] that Medicare overpaid the private health plans by more than $106 billion from 2010 through 2019 because of the way the private plans charge for sicker patients” [emphasis added]. Nearly $34 billion of this new spending came during 2018 and 2019, the most recent period available for analysis.
These overpayment stem from the current MA risk-adjusted payment system that incentivizes plans to record enrollees with as many medical conditions as possible in order to increase payment. As the article notes, this system “pays higher rates for sicker patients and less for those in good health” which “means the more serious medical conditions the plans diagnose the more money they get — sometimes thousands of dollars more per patient over the course of a year with little monitoring by CMS to make sure the higher fees are justified.”
Schulte notes that “critics have argued for years that Medicare Advantage costs taxpayers too much. The industry also has been the target of multiple government investigations and Department of Justice lawsuits that allege widespread billing abuse by some plans.”
The article quotes Kronick referring to MA cost growth as a “‘systemic problem across the industry,’” which CMS has failed to rein in. He said some plans saw ‘eye-popping’ revenue gains, while others had more modest increases. Giant insurer UnitedHealthcare, which in 2019 had about 6 million Medicare Advantage members, received excess payments of some $6 billion, according to Kronick.”
The article also notes that “[m]aking any cuts to Medicare Advantage payments faces stiff opposition” by many members of Congress, despite the fact that, as Kronick notes, “the rise in Medicare Advantage coding means taxpayers pay much more for similar patients who join the health plans than for those in original Medicare” and that “there is ‘little evidence’ that higher payments to Medicare Advantage are justified because their enrollees are sicker than the average senior.” As policymakers continue to do nothing to address these overpayments, things will get even worse: “Kronick said that if CMS keeps the current coding adjustment in place, spending on Medicare Advantage will increase by $600 billion from 2023 through 2031. While some of that money would provide patients with extra health benefits, Kronick estimates that as much as two-thirds of it could be going toward profits for insurance companies.”
“Visitation Is Now Allowed For All Residents At All Times”
Citing high vaccination rates for residents (86%) and staff (74%); interim final rules with comment (published at 86 Fed. Reg. 61555 (Nov. 4, 2021)) requiring staff to be vaccinated against COVID-19; federal regulations (42 C.F.R. §483.10(f)(2), confirming residents’ right to make choices about issues of importance to them, and §483.10(f)(4)(ii) and (iii), confirming residents’ right to deny or withdraw consent for visits); and the physical and emotion toll that social isolation during the pandemic has caused residents, the Centers for Medicare & Medicaid Services (CMS) has revised its visitation guidance to provide that “Visitation is now allowed for all residents at all times.” CMS, “Nursing Home Visitation – COVID019 (REVISED), QSO-20-39-NH (Revised Nov. 12, 2021). CMS explicitly states that “facilities can no longer limit the frequency and length of visits for residents, the number of visitors, or require advance scheduling of visits.”
The new visitation policy applies to all residents and in all situations, including residents on transmission-based precautions (TBP) or quarantine, unvaccinated residents, and residents in facilities that are having an outbreak investigation.
CMS confirms that residents may “leave the facility as they choose.” When they return, facilities should screen them for signs or symptoms of COVID -19; test them, if they have been in close contact with someone who had COVID-19; and, if not fully vaccinated, place them on quarantine. Residents developing signs or symptoms should be placed on TBP, regardless of vaccination status. Residents absent for 24 hours or more “should generally be managed as a new admission or readmission,” as recommended by the Centers for Disease Control and Prevention.
CMS suggests that indoor visits “be conducted in a manner that adheres to the core principles of COVID-19 infection prevention and does not increase risk to other residents.” These principles include physical distancing and avoidance of large gatherings.
“Nursing Home Visitation – COVID019 (REVISED) is available at https://www.cms.gov/files/document/qso-20-39-nh-revised.pdf and from the Center for Medicare Advocacy, on request.
The Center for Medicare Advocacy Is Grateful for a 3-Year Grant Award From RRF Foundation For Aging to Support Our Mission
RRF Foundation for Aging has awarded the Center a three-year grant to support our efforts to advance economic security, health equity, and well-being for older adults. The Center is deeply grateful for this generous grant as well as the Foundation’s ongoing support and partnership over the last 30 years.
Fair and comprehensive Medicare coverage is the key to opening doors to necessary health care for over 53 million older people. A strong Medicare program, with equitable access and coverage of necessary health care, is critical to improving the well-being of older people and to maintaining their economic security. RRF’s support will enhance the Center’s ability to continue to fight for just such a strong Medicare program, based on the needs and rights of beneficiaries. It will advance our efforts to continue to serve as a hub of Medicare expertise and analysis by providing legal assistance, outreach, education, and guidance for beneficiaries, policymakers, advocates, and organizations serving older people, their families, and caregivers.
For more than 40 years, RRF Foundation for Aging has been a steadfast supporter of programs and research that significantly improve the quality of life for older people. RRF is one of the first private foundations devoted exclusively to aging and retirement issues. The Center for Medicare Advocacy is deeply grateful to RRF for recognizing and supporting our work as part of its extraordinary efforts to address the needs of older adults.
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