Medicare Reform

NASW Position

The Medicare program has been protecting the vulnerable since 1965, and at present provides 40 million Americans with health insurance and by 2031, is expected to grow to 77 million. Unequivocally, NASW believes in universal health care coverage. However, until universal coverage is achieved in the United States, NASW strongly supports the current fee-for-service Medicare program. NASW will work to protect the program integrity, financial stability, and entitlement status, in addition to the prominent role professional social workers play in Medicare, including long term care.

The priorities of NASW include protecting the role of professional social workers as providers in Medicare, as well as the right of clients to be served by social workers. Moreover, NASW holds that federal managed care standards should enable consumers to feel confident that quality health care will be available when it is needed as well as reassure providers that appropriate clinical and preventive care is economical and feasible. NASW also will work to protect the confidentiality of medical records and patient information under the Medicare program.

NASW also believes that, at least, any Medicare reform initiatives should:

NASW will continue its advocacy efforts to those ends. Please visit the Advocacy portion of the NASW website for current activities on this and other issues: https://www.socialworkers.org/advocacy/grassroots/default.asp.

Summary of the President's Plan

President Bush first announced his intentions to reform Medicare in the State of the Union speech on January 28, 2003. In the following months, the President and the Administration have shared some details about his proposed Medicare reform plan, which would include prescription benefit provisions. The White House only released the most specific information on this effort in early March 2003 and this effort is based on that material.

Medicare beneficiaries will have three choices under this plan: Traditional Medicare, Enhanced Medicare, or Medicare Advantage. No beneficiary would be forced to switch from his or her current Medicare coverage; any shift would be voluntary.

Traditional Medicare

Traditional Medicare, also known as fee-for-service, will remain the same as it is now. However, current fee-for-service beneficiaries will also be able to receive a prescription drug discount card, without any premium increases, as well as protection against high out-of-pocket prescription drug expenses. Assurances have been made that Part B premiums will not be affected by the implementation of Enhanced Medicare.

Those Medicare beneficiaries who receive supplemental coverage through Medigap plans or Medicaid will not be affected. Furthermore, the President’s proposal will add two more Medigap plans, extending the choice from ten to twelve standardized plans. The new plans will offer among their benefits reduced deductibles and copayments, prescription drug coverage, and supplemental protection against high out-of-pocket costs.

Enhanced Medicare

Enhanced Medicare is modeled after the Federal Employee Health Benefit Plan and will offer beneficiaries a range of health plans from which to choose. Enhanced Medicare includes the following benefits: prescription drugs, full coverage of preventive benefits, protection against high out-of-pocket drug costs, and cost sharing. Medicare beneficiaries under this option still will be able to choose any doctor or any hospital they want for the treatment and care they need. Like traditional Medicare, in Enhanced Medicare the federal government will pay for most of the coverage costs with beneficiaries paying a smaller share. Beneficiaries will have only a single deductible for medical services, replacing the separate Part A and Part B deductibles. Furthermore, the lifetime limit for inpatient hospital care will be eliminated. Beneficiaries under this option would pay nothing for the first two inpatient hospital admissions in a year, with a copay implemented for all subsequent admissions. Low-income elder Americans who do not qualify for Medicaid but are enrolled in Enhanced Medicare will receive additional financial assistance for prescription drugs, as determined on a state-by-state basis.

Enhanced Medicare will be administered by a new unit of the U.S. Department of Health and Human Services, the Medicare Center for Beneficiary Choices (MCBC). Like traditional Medicare, the country will be divided into regions for administrative purposes, and the selection of plans offered will vary by region.

Medicare Advantage

Medicare Advantage will provide beneficiaries with access to managed care plans that may offer broader coverage at a lower cost as compared to a combination of traditional Medicare and Medigap plans. These plans will offer an enhanced version of the Medicare basic benefit package.

These plans will limit the choice of providers for beneficiaries in exchange for lower cost sharing and additional benefits. Medicare Advantage also will be able to offer health insurance plans without prescription drug coverage, widening the range of options for beneficiaries. However, if prescription drug coverage is desired, like Enhanced Medicare, low-income seniors will pay no additional cost for a drug benefit offered through Medicare Advantage plans. Other enrollees will pay a monthly premium to pay for their share of the prescription drug benefit costs under Medicare Advantage.

The President has outlined a timeline for implementation of this initiative, assuming that Congress will pass legislation that he will sign into law during 2003. If that happens, most of the changes will take effect in 2006. However, beginning in 2004, Medicare beneficiaries will receive Medicare-endorsed prescription drug cards that will provide discounts of ranging from 10-25%.

All low-income beneficiaries will receive an additional $600 per year to assist in the purchase of prescription drugs.