April 20th, 2009

In two recent articles, the Wall Street Journal describes two major upcoming changes to Medicare.

The first change concerns private health plans offered to Medicare enrollees.  Writes the WSJ:

Seniors covered by the so-called Medicare Advantage plans will likely see higher premiums or fewer benefits. And a small number of them will find that their plans no longer exist. Advantage plans wrap physician and hospital services in one, often with additional benefits such as vision and drug coverage.

Advantage plans may become more consumer-friendly, however, since they will have to abide by new government rules, such as stricter marketing standards and caps for out-of-pocket costs. Also, plans will be required to explain in clear language what they cover in things like the “doughnut hole,” a coverage gap where consumers generally must pay the full cost of their medicines up to a given amount. The aim is to make it easier for consumers to compare options and costs.

The new measures come as Washington has shifted gears on Medicare Advantage. The program grew rapidly under former President George W. Bush. And Republicans see it as a better alternative to traditional Medicare. Instead of paying doctors and hospitals directly, the government pays private insurers to manage care.

But President Barack Obama has made clear his intention to rein in Medicare Advantage, saying the program costs the government more but doesn’t do enough to manage patient care.

The second change is that starting in 2011, Medicare will use competitive bidding to buy wheelchairs, walkers and other medical equipment.  Writes the WSJ:

Currently, the government pays set fees for such equipment used at beneficiaries’ homes. The Centers for Medicare and Medicaid Services, the agency that manages the federal insurance program for the elderly and disabled, has said the prices it pays are too high. It sometimes pays several thousand dollars more than prices charged by Web vendors.

Under the new plan, companies will bid to provide the equipment and Medicare will select several low bidders in a particular geographic area. The government will only pay for equipment from approved suppliers.

Officials said the program, when implemented on Jan. 1, 2011, could save the government $1 billion a year. They said it will also reduce the incidence of fraud.

Follow the links above each article excerpt to read more about each of the Medicare changes.