Update on the Fiscal Year 2017 federal budget...federally-funded programs, like the Older Americans Act, are still in operation thanks to a Continuing Resolution (CR) that was due to expire on December 9.  Recently, House Republicans decided to pass another short-term Continuing Resolution in the lame duck session, authorizing funding through March 31.  President-elect Donald Trump asked for this four-month delay in final budget-making, so he can place some of his top priorities into this year's spending plan. 

 

It's common knowledge that repealing Obamacare is on the new President's to-do list, although after a meeting with President Obama, Trump said he may keep some parts of it.  In his "Contract with the American Voter," Trump talks about replacing Obamacare with Health Savings Accounts, ability to buy insurance in other states, giving states control of Medicaid, and cutting red tape at the Food and Drug Administration.  Obamacare includes several provisions affecting older Americans, such as -- closing the Part D donut hole, expanding Medicare coverage for preventive services, reducing the size of provider increases to extend Medicare solvency, and numerous innovation programs - and it remains to be seen if these elements will be kept.

 

One little-noticed June report has the eye of the fledgling Trump administration - the U.S. House Task Force on Health Care Reform.  The four-member group appointed by House Speaker Paul Ryan included Michigan Congressman Fred Upton (R-St. Joseph) and its 37-page report, chock-full of data and research citations, can be found at www.better.gop.  Numerous changes in Medicare and Medicaid are described, along with many other modifications in the health care world.

 

The report points out that Medicare is unsustainable and uses outdated payment systems (fee-for-service) that encourage the overuse of services.  Medicare Advantage, Part D drug benefits and paying-for-value initiatives are three successful Republican-initiated reforms which need to be continued or expanded. 

 

Here are some of the Medicare changes:

• Beginning 2020, gradually increase the Medicare eligibility age to match Social Security eligibility.
• Beginning 2024, offer a new Premium Support Payment allowing beneficiaries to choose from private plans on a Medicare Exchange.  Payments would be adjusted for low-income and sick individuals.  Insurers on the Exchange must sell to all customers.  Those in or near retirement would be able to keep traditional Medicare (fee-for-service).
• Invest in Medicare Advantage plans - repeal Obamacare's cuts in reimbursements.
• Allow Medicare Advantage plans to provide personalized benefit packages to fit individual needs (known as value-based insurance design or VBID).
• Put limits on Medigap insurance coverage of out-of-pocket costs.
• Combine Parts A and B, create a combined deductible, and create an annual out-of-pocket cost cap.  Institute a 20% uniform cost-sharing requirement for all services.
• Allow patients to obtain items and services outside of traditional Medicare with physician approval.

Medicaid is also unsustainable, says the House Task Force, suffers from significant waste, fraud and abuse, and offers poor access to physicians.  Medicaid's open-ended funding creates the wrong incentives and states have used creative mechanisms to maximize funding.  States' hands are tied by a myriad of federal requirements that prevent innovation and change.

*Published with permission of Area Agencies on Aging Association of Michigan.