Medicare currently overpays private plans by 14 percent on average to provide the same benefits as the traditional program – and much more in some areas of the country. The Medicare Advantage program has also done little to reward quality. Moreover, plans have gamed the payment system in ways drive up the public cost of the program. All of this is why Medicare Advantage has become a very profitable line of business for some of the nation’s largest health insurers. The Senate bill creates a bidding model for payment rates and phases in changes to limit potential disruptions for beneficiaries. The House proposal phases payments down based on local fee-for-service costs.
The President’s Proposal represents a compromise between the House and Senate bills, blending elements of both bills, while providing greater certainty of cost savings by linking to current fee-for-service costs. Specifically, the President’s Proposal creates a set of benchmark payments at different percentages of the current average fee-for-service costs in an area. It phases these benchmarks in gradually in order to avoid disruption to beneficiaries, taking into account the relative payments to fee-for-service costs in an area. It provides bonuses for quality and enrollee satisfaction. It adjusts rebates of savings between the benchmark payment and actual plan bid to take into account the transition as well as a plan’s quality rating: plans with low quality scores receive lower rebates (i.e., can keep less of any savings they generate). Finally, the President’s Proposal requires a payment adjustment for unjustified coding patterns in Medicare Advantage plans that have raised payments more rapidly than the evidence of their enrollees’ health status and costs suggests is warranted, based on actuarial analysis. This is the primary source of additional savings compared to the Senate proposal. Delay and Reform the High-Cost Plan Excise Tax.
Part of the reason for high and rising insurance costs is that insurers have little incentive to lower their premiums. The Senate bill includes a tax on high-cost health insurance plans. CBO has estimated that this policy will reduce premiums as well as contribute to long-run deficit reduction. The President’s Proposal changes the effective date of the Senate policy from 2013 to 2018 to provide additional transition time for high-cost plans to become more efficient. It also raises the amount of premiums that are exempt from the assessment from $8,500 for singles to $10,200 and from $23,000 for families to $27,500 and indexes these amounts for subsequent years at general inflation plus 1 percent. To the degree that health costs rise unexpectedly quickly between now and 2018, the initial threshold would be adjusted upwards automatically. To ensure that the tax affects firms equitably, the President’s Proposal reforms it by including an adjustment for firms whose health costs are higher due to the age or gender of their workers, and by no longer counting dental and vision benefits as potentially taxable benefits. The President’s Proposal maintains the Senate bill’s permanent adjustment in favor of high-risk occupations such as “first responders.” Broaden the Medicare Hospital Insurance (HI) Tax Base for High-Income Taxpayers.
Under current law, people who earn a salary pay the Medicare HI tax on their earned income, but those who have substantial unearned income do not, raising issues of fairness. The House bill includes a 5.4% surcharge on high-income households to improve the fairness of the tax system and to support health reform. The Senate bill includes an increase in the HI tax for high-income households for similar reasons, an increase of 0.9% on earnings above a specific threshold for a total employee assessment of 2.35% on these amounts. The President’s Proposal adopts the Senate bill approach and adds a 2.9 percent assessment (equal to the combined employer and employee share of the existing HI tax) on income from interest, dividends, annuities, royalties and rents, other than such income which is derived in the ordinary course of a trade or business which is not a passive activity (e.g., income from active participation in S corporations) on taxpayers with respect to income above $200,000 for singles and $250,000 for married couples filing jointly. The additional revenues from the tax on earned income would be credited to the HI trust fund and the revenues from the tax on unearned income would be credited to the Supplemental Medical Insurance (SMI) trust fund. Increase in Fees on Brand Name Pharmaceuticals.
As more Americans gain health insurance, more will be able to pay for prescription drugs. Moreover, the President’s plan closes the Medicare “donut hole,” ensuring that seniors do not skip or cut back on needed prescriptions. Both policies will result in new revenue for the pharmaceutical industry. The President’s Proposal increases the revenue from the assessment on this industry which is $23 billion in the Senate bill by $10 billion over 10 years. It also delays the implementation of these fees by one year, until 2011, and makes changes to facilitate administration by the IRS. Close Tax Loopholes.
Adopts two House proposals to close tax loopholes: (1) Current law provides a tax credit for the production of cellulosic biofuels. The credit was designed to promote the production and use of renewable fuels. Certain liquid byproducts derived from processing paper or pulp (known as “black liquor” when derived from the kraft process) were not intended to be covered by this credit. The President’s Proposal adopts the House bill’s policy to clarify that they are not eligible for the tax credit. (2) The President’s Proposal helps prevent unjustified tax shelters by clarifying the circumstances under which transactions have “economic substance” (as opposed to being undertaken solely to obtain tax benefits) and raises the penalties for transactions that lack economic substance. In so doing, it adopts the House’s policy, with minor technical changes.
http://www.redstate.com/moe_lane/files/2010/02/summary-presidents-proposal.pdf
Well folks this will be the end of this nation as we now it, you think things are bad now....hold on the plane is nosing over for the final spin into the ground....
GAWD! It’s a F****** SUMMARY! Good grief!
They’ve been harping on this waste,fraud and abuse thing for the last year. Why haven’t they stopped it?
I know he talks about evil insurance companies but how about evil trial lawyers?
Well it’s not often you see a US President stand there and lie. Take it in while you can ... It likely won’t end well.
CAN YOU SMELL MASSIVE TAX HIKES, MASSIVE GOVERNMENT CONTROL, MASSIVE CRAP OUT OF THESE COMMUNISTS??? I CAN!!! After defending this nation for 20 plus years during the cold war era, I KNOW a communist when I see, hear, and smell one. And I SMELL one in this mob.
It HELPS?????
The rallying cry was to care for all these uninsured people and now he's going to spend all the money with a goal of only providing them with a small discount? Oh brother!!
According to Beck it's because he wants to distance himself from his own plan so it can look like he's supporting reform. Yet, we all know that the president can't write any laws. He's expecting Reid and Pelosi to take up his plan and when it fails too, he can say, "I just made a proposal."
Dear God, save this country.
NO SOCIALIST NATIONALIZATION OF THE MEDICAL INSURANCE INDUSTRY
Oh I get it SEIU, ACORN, UAW etc. --- those tens of millions!
So he's not eliminating Nebraska's pork - he's giving it to everyone. And, that's going to cost less?
So they won't start collecting money on the "cadillac plans" till 2018...how's that supposed to help fund the plan that starts in 2013.
I’m holding out for the hope that he just completely self-destructs.
He’s become like a stalker. The US is the girl in this example, and he’s the creepy guy. The girl accepted one date (the election.) After a few more dates, she realized he was psycho and she told him to back off. However, he keeps coming at her with different ideas and she keeps turning him down, but he won’t give up.
This fall is gonna be Obama’s restraining order. The 2012 election will be when her new boyfriend beats the sh*t out of him.
“Improve Medicare Advantage Payments”
By cutting them.
LIAR! Impossible. How stupid does he think we are?
It’s time to get back on the phones, send those emails and faxes folks! Keep hammering away at them just as we have for the past year. Don’t let up!
All these lies coming out on the REAL birthday of George Washington....Happy Birthday, Mr. President...what do you think of this place now???