Medicare Changes Could Save Money For Taxpayers, Enrollees But Seniors Fret

Health reform legislation could change key aspects of Medicare policy, such as the amount seniors pay for drug coverage, a prospect that leaves many beneficiaries wary of the overhaul amid reassurance from the administration and harsh warnings from critics.

For instance, "Medicare beneficiaries would often have to pay higher premiums for prescription drug coverage, but many would see their total drug spending decline, so they would save money as a result of health legislation moving through the House, the Congressional Budget Office said in a recent report," the New York Times reports.

Premiums for drugs could rise as much as 20 percent over the next decade, according the projections based on the House version of the bill. But the CBO added that "beneficiaries' spending on prescription drugs apart from those premiums would fall, on average, as would their overall prescription drug spending (including both premiums and cost-sharing)." And, The Times reports, "the drug-related provisions of the House bill would save the federal government $30 billion from 2010 to 2019" and eventually eliminate the so-called "doughnut hole" (Pear, 8/30).

"Currently, about a quarter of Medicare patients with prescription drug coverage fall into the so-called "doughnut hole" coverage gap, and they are the ones who would be most helped by the House bill," the Associated Press/BusinessWeek reports.

The 50-percent discount for doughnut hole purchases was included in a deal between the White House and drug makers, as well, the Philadelphia Inquirer reports. However, Rep Henry Waxman, D-Calif., has said that agreement lets the pharmaceutical industry off the hook too easily (Hill, 8/30).

Medicare payments to hospitals are also under discussion: "One proposal could lead to [Massachusetts General Hospital] annually losing about $50 million in Medicare dollars, or about 2 percent of the Harvard-affiliated hospital's operating budget. A loss of $50 million could cost the hospital about 1,000 jobs," the Boston Herald reports (Fitzgerald, 8/31). 

Meanwhile, some seniors feel caught in the middle: 

The Denver Post: "Politicians are finding out just how tricky it is to seek seniors' support for health reform when those on Medicare are precisely the Americans happiest with an insurance stalemate. ... 'Obama's going to change it. He'll make it bad. He's got to make up a deficit, so they'll be cutting back Medicare and making people pay more monthly dues,'" said Michael Henderson, 88, a view shared by some other seniors (Booth and Crummy, 8/30).

KCBD (NBC Affiliate, Texas): "I think everybody is who is on Medicare, and we're all very concerned about the increased cost of medical care, very much so," Darleen West, a senior, said (Pieper, 8/30).

Though the AARP, the nation's largest senior group, hasn't endorsed a proposal, it has been broadly supportive of reform, NPR reports, and specifically backed provisions it says will strengthen Medicare. "I think in recent weeks we've seen that the scare tactics do work in a lot of cases," a group spokesman said (Leslie, 8/30).

This is part of Kaiser Health News' Daily Report - a summary of health policy coverage from more than 300 news organizations. The full summary of the day's news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.