[Under Medicare Part C] Most beneficiaries have the option to enroll in private health insurance plans that contract with Medicare to provide Part A and Part B medical services. The share of Medicare beneficiaries in such plans has risen rapidly in recent years, reaching 25.0 percent in 2010 from 12.4 percent in 2004. Plan costs for the standard benefit package can be significantly lower or higher than the corresponding cost for beneficiaries in the “traditional” or “fee-for-service” Medicare program, but prior to the Affordable Care Act [ACA, a.k.a. Obamacare], private plans were generally paid a higher average amount, and the additional payments were used to reduce enrollee cost-sharing requirements, provide extra benefits, and/or reduce Part B and Part D premiums. These benefit enhancements were valuable to enrollees but also resulted in higher Medicare costs overall and higher premiums for all Part B beneficiaries, not just those who were enrolled in MA plans. Under the ACA, payments to plans will be based on “benchmarks” in a range of 95 to 115 percent of fee-for-service Medicare costs, with bonus amounts payable for plans meeting high quality-of-care standards. (Prior to the ACA, the benchmark range was generally 100 to 140 percent of fee-for-service costs.) As these changes phase in during 2012-2017, the overall participation rate for private health plans is expected to decline from 25 percent in 2010 to about 15 percent in 2020.
Medicare.gov: the official U.S. government site for Medicare
Federal Budget in Pictures
In 2016 the national debt exceeded $19 trillion. Now, more than ever it’s critical that we understand the nation’s spending, taxes and debt. These powerful charts enable all Americans to better understand the federal budget and identify important areas of reform.
Obama’s Medicare Plan: Seniors Will Pay More
Centers for Medicare and Medicaid Services, 2012 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplemental Medical Insurance Trust Funds, April 23, 2012, http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/Downloads/TR2012.pdf (accessed October 19, 2012). It should be noted that there is a “hold harmless” provision that applies to Part B premium increases. As the trustees’ report explains, “Part B premiums may also vary from standard rate because a ‘hold-harmless’ provision can lower the premium rate for individuals who have their premiums deducted from their Social Security benefits. On an individual basis, this provision limits the dollar increase in the Part B premium to the dollar increase in the individual’s Social Security benefit. As a result, the person affected pays a lower Part B premium, and the net amount of the individual’s Social Security benefit does not decrease despite the greater increase in the premium.”