Arthur Laupus joined AARP because he thought the nonprofit senior-citizen-advocacy group would make his retirement years easier.

He signed up for an auto insurance policy endorsed by AARP, believing the advertising that said he would save money.

He didn’t. When Laupus, 71, compared his car insurance rate with a dozen other companies, he found he was paying twice the average.

Why? One reason, he learned, was because AARP was taking a cut out of his premium before sending the money to Hartford Financial Services Group, the provider of the coverage.

Laupus stumbled onto something that many members of the world’s largest seniors organization don’t know: The group, formerly called American Association of Retired Persons, collects hundreds of millions of dollars annually from insurers who pay for AARP’s endorsement of their policies.

The insurance companies build the cost of these so-called royalties and fees, which amounted to $497.6 million in 2007, into the premiums they charge AARP members, according to AARP’s consolidated financial statement for that year.

AARP uses the royalties and fees to fund about half the expenses that pay for activities such as publishing brochures about health care and consumer fraud — as well as for paying down the $200-million bond debt that funded the association’s marble and brass-studded Washington headquarters.

In addition, AARP holds clients’ insurance premiums for as long as a month and invests the money, which added $40.4 million to its revenue in 2007.

“At the end of the day, it’s all about fattening the coffers of the organization,” says Thomas Orecchio, who was chairman of the Arlington Heights, Ill.-based National Association of Personal Financial Advisors until September. AARP, he says, is sponsoring insurance for its members at inflated prices.

“It’s the dirty little secret,” he says.

During the past decade, royalties and fees have made up an increasing percentage of AARP’s income, rising to 43% of its $1.17 billion in revenue in 2007 from 11% in 1999, according to AARP data.

Laupus, a former teacher in Baltimore, and millions of others joined AARP in the belief it would provide discounts, services and publications. The organization ranks behind only Consumer Reports and the American Red Cross as the most trusted large group that influences U.S. politics and business, a 2007 Harris Poll found.

AARP has helped millions with tax returns, estate planning and health care advice.

With stock markets around the world plunging, savings plans in turmoil and medical costs soaring, older Americans need an advocacy organization in their corner.

“The turbulent economy puts more people in the difficult situation of being under- or uninsured,” says U.S. Sen. Charles Grassley, R-Iowa. “That’s why we need to make sure individuals aren’t taken advantage of with misleading marketing, especially by a name brand advocate who carries a high level of trust.”

Grassley sent letters to AARP CEO William Novelli and state insurance commissioners Nov. 3 inquiring into whether the AARP misrepresented what is covered by some health insurance policies it sold. Four days later, Novelli announced AARP would review its marketing and suspend sales of those policies.

AARP’s mission to help seniors has been compromised by its reliance on royalties and fees, says Marilyn Moon, who was director of AARP’s Public Policy Institute from 1986 through 1989.

“There’s an inherent conflict of interest,” she says. “A lot of people there are trying to do good, but they’re ending up becoming very dependent on sources of income.”

Moon is now vice president and director of the health program at American Institutes for Research in Washington.

Novelli, 67, has broadened AARP’s reach and increased its clout in Washington. He has expanded AARP’s marketing to include 17 types of insurance.

The association collects royalties on each of those products. Its membership rose to 40 million from 35 million, and its total revenue grew to $1.17 billion in 2007 from $520 million when Novelli took charge.

Nowhere were AARP’s conflicting roles more evident than in its lobbying in support of a 2003 bill proposed by President George W. Bush to expand Medicare, the federal health insurance program for people older than 65.

The bill, which for the first time added a prescription drug plan to Medicare, passed by a vote of 220-215 in the House of Representatives and 54-44 in the Senate. Thousands of AARP members complained that the legislation was a bad deal for seniors because it provided incomplete coverage and raised costs for seniors with low income.

After the Medicare bill was signed into law by Bush in December 2003, AARP was able to expand its contract with Minnetonka, Minn.-based UnitedHealth Group Inc., which underwrites AARP’s Medicare supplemental insurance plan.

AARP advertises that its Medicare supplemental insurance can save people thousands of dollars.

While every type of supplemental policy sold by all companies must offer the same coverage under federal rules, AARP doesn’t sell the least expensive.

The AARP/UnitedHealth basic policy costs $582 a year more than a lower-cost competitor in New York and $428 more in Los Angeles, according to data on Medicare’s Web page.

AARP’s muscle on Capitol Hill is vested in the size and geographic reach of its membership, as well as its lobbying budget. The association donated no money to candidates in 2007, federal election records show.

“They don’t even have to give any campaign contributions,” says James Thurber, director of the Center for Congressional and Presidential Studies at American University in Washington. “AARP’s enormous clout comes from the threat they could defeat people in Congress who don’t do what they want. They are the most powerful interest group in Washington.”

Tags: aarp, Medicare, medicare supplemental insurance, united healthcare aarp

The 2009 Medicare annual Open Enrollment Period for prescription drug plans runs from November 15th through December 31, 2008. Medicare beneficiaries will be able to begin making enrollment changes in their health and prescription drug coverage for 2009 if necessary during this time.

In addition, for Medicare Advantage (MA) plans only, beneficiaries can make one change in enrollment—enrolling in a new plan, changing plans or canceling a plan—between January 1 and March 31, 2009.

Now is the time for beneficiaries to prepare and compare their health and prescription drug coverage options and choose the plan that best meets their needs. Beneficiaries should take time to compare their current plan with the new plan options available in 2009. If they are satisfied with their current plan and the current plan does not intend to significantly change coverage benefits, they do not need to do anything in order to maintain that coverage.

Beneficiaries are encouraged to review their prescriptions and other health needs when assessing the plan options described in the Medicare & You handbook or on www.medicare.gov. Beneficiaries who feel they need assistance when reviewing the plan options can call Illinois Health Agents at (630) 930-9364 or any other Medicare Certified agency.

People comfortable with navigating the Internet should take advantage of the enhanced online Medicare Prescription Drug Plan Finder options available on www.medicare.gov. This feature offers information on available drug plans, including out-of-pocket costs and pharmacy networks. The enhanced online Medicare Prescription Drug Plan Finder and Medicare Options Compare tools enable beneficiaries to compare drug plan options for prescription drug plans and Medicare Advantage plans in their area.

The 2009 Medicare & You handbook, mailed to beneficiaries in October, includes tips on selecting a plan and an overview of plan options. Beneficiaries already enrolled in a Part D plan will also receive an Annual Notice of Change describing any changes in the benefits of their current drug plan.

Another focus for this year’s open enrollment period involves signing up beneficiaries eligible for extra help, known as the Low Income Subsidy (LIS), to pay for their drugs. This benefit is not only about providing affordable prescription drug coverage; it’s also about promoting better health. For millions of beneficiaries, prescription drug coverage is a critical component in maintaining a healthy lifestyle. Income and resource limits apply. If you or a loved one feels they may be eligible for the LIS, contact KIPDA or the Social Security Administration at 1-800-772-1213.

This is an important time for beneficiaries to review their current coverage and make a decision that will give them peace of mind for the rest of the year. We encourage everyone to make a decision by early December, to ensure a smoother transition into the Part D benefit.

Beware of Medicare Fraud:

Unfortunately, not everyone who contacts you about switching to a Medicare drug plan has the best intentions. To protect yourself from scam artists intent on taking advantage of your situation, here are some additional tips to avoid becoming a victim:

Beware of door-to-door sales people. Remember, agents cannot solicit business at your home without an appointment. Do not let uninvited agents into your home.

Do not give out personal information, such as Social Security numbers, bank account numbers or credit card numbers to anyone you have not verified as a licensed agent. People are not allowed to request such personal information in their marketing activities and cannot ask for payment over the Internet. They must send you a bill. Once you decide to purchase a plan and have verified that the agent is licensed, you may give the agent personal information to assist in enrollment and billing.

Tags: Medicare, Medicare Part D, medicare prescription drugs

Seniors enrolled in Medicare’s drug benefit will pay average monthly premiums of $28 next year, government officials announced today.

That’s about $3 higher than the 2008 average premium, or a 12 percent increase.

“Average plan bids have increased at roughly the same rate as drug costs,” said Paul Spitalnic, an official with the federal Centers for Medicare & Medicaid Services.

Premiums are set by the private plans that offer drug benefits under Medicare and will vary depending on the plan and location.

The average increase affects nearly 25 million Medicare beneficiaries — 7.6 million in Medicare Advantage plans with comprehensive coverage and 17.4 million plans that cover only drugs.

While officials said the premium increase was well below projections, advocates noted that it exceeds the annual cost of living increase for Social Security, which remains under 3 percent.

The problem is “the government is failing to do anything about the runaway prices that Americans pay for drugs” because it won’t negotiate price discounts directly with drug companies, said Robert Hayes of the Medicare Rights Center.

The annual enrollment period for Medicare Part D begins Nov. 15 and extends through the end of the year. This is the only time of year that seniors can elect to change their plans.

For 2009, the annual deductible for Part D plans (the amount consumers pay before coverage kicks in) will be $295. Once you pay the deductible, your Medicare Part D plan will pay 75 percent of your drug costs up to $2,700.

Then, you enter the so-called “donut hole,” and you’re responsible for 100 percent of your drug costs up to $6,153.75. After that, the government will pay 100 percent of your drug bills.

In other words, you could end up paying $4,350 in 2009 out-of-pocket for drug expenses before Medicare will take over paying for all your drugs.

In Illinois, seniors with low incomes will want to make sure they consider applying for assistance that can help cover these extra expenses. For more information about Illinois Cares Rx, one of these programs, click here. To obtain this assistance, you have to work with a Medicare drug plan that partners with Illinois Cares Rx.

If you’re very low income, you probably qualify for a program known as Extra Help. For more information about Extra Help, click here. To qualify, you’ll have to apply and be approved by the Social Security Administration.

For help figuring out how Medicare Part D works, counselors are available at the organizations listed below.

Illinois Department of Aging Senior Help Line 1-800-252-8966

Illinois Senior Health Insurance Program 1-800-548-9034

AgeOptions, suburban Cook County 1-800-699-9043

Chicago Department of Senior Services 1-312-744-4016

Tags: Medicare, Medicare drug plan, Medicare Part D

HARTFORD, Conn. – September 3, 2008. – Aetna announced today that it has made its CareEngine-powered Personal Health Record (PHR) available to current Aetna Medicare members who purchased their Medicare plans individually. This unique, interactive tool is designed to better engage Medicare members in managing their own health, as well as make it easier for members to share health information with their physicians.

Aetna’s PHR combines a wide variety of health information gathered from across the health care spectrum — such as physician offices, labs, diagnostic treatment and pharmacies — with user-entered information such as family history or allergies, and houses it in a secure, online location. This type of tool is especially important to Medicare members as more and more of them use the Internet. A May 2008 study from the Pew Internet & American Life Society estimates that 35 percent of individuals age 65 and over use the Internet, and the percentage increase for this age group has been greater than any other since 2000.

“This is a great example of the value that we provide to our Medicare members,” said Frank McCauley, head of Aetna’s Consumer Business Segment. “Instead of storing medical records in a file cabinet or a shoe box, Aetna’s PHR allows members to access their medical information any place an Internet connection is available.”

With permission from the member, the Personal Health Record can be shared online with physicians and other health care professionals. In addition, members can easily print copies to bring to office visits to help fill out forms. They also have the ability to create and print a wallet-sized Emergency Information Card that contains important information such as name, date of birth, blood type, emergency contacts, allergies, medications, and physician and insurance information.

Aetna’s PHR also uses patented CareEngine technology that continuously scans an individual’s health data and claims information and compares it to current, established medical best practices. It can then alert members and doctors about possible urgent situations and opportunities to improve care.

Recent Enhancements

Through a recent pilot program that made the PHR available to more than 750,000 members, Aetna discovered that members with an ongoing health condition were twice as likely to use their PHR as those without one. In part because of this finding, Aetna added Health Trackers to the PHR to help members better follow their health data. With this new feature, members can more effectively monitor their blood glucose levels, blood pressure, cholesterol, BMI and more.

Aetna has also made the PHR available online to treating physicians’ offices (if given access by the member) through Aetna’s secure provider website via NaviNet®.

“With age usually comes an increased need for health care services, and our Medicare members are more likely to have chronic conditions they need to monitor on an ongoing basis,” McCauley said. “These new features will give them the ability to better track their own health information and share it with their physicians. Improvements in both of these areas can help our members make better decisions concerning their health care.”

Tags: Aetna, Aetna Medicare, Medicare, monitor health, Organize medical information, Personal Health Record

Aetna Medicare is happy to announce the addition of Resurrection Healthcare to our Aetna Golden Medicare (HMO) and Aetna Golden Choice (PPO) network! Resurrection Healthcare operates nine hospital facilities throughout the city of Chicago and suburban Cook County.

The Resurrection Health Care facilities include:

* Resurrection Medical Center

* Our Lady of Resurrection

* Holy Family

* St. Elizabeth

* St. Mary

* St Joseph

* Westlake

* West Suburban

For a complete list of Resurrection Healthcare programs and services, visit Reshealth.org

Tags: Aetna, aetna illinois, hillary clinton, illinois network, Medicare, medicare network illinois

Medicare is trying to curb an opaque industry practice that inflates what some older and disabled people pay for medicines under the federal insurance program’s prescription-drug plan.

Medicare Part D, introduced in 2006 to extend drug coverage to beneficiaries, is provided through private health-insurance companies. Many insurers in turn contract with so-called pharmacy-benefit managers to administer their plans. Among other functions, these PBMs negotiate lower drug prices with pharmacies. But some companies, under a practice allowed by Medicare, then charge a higher price to health insurers and, ultimately, the government.

This approach is called “lock-in pricing” because the insurers pay the PBMs a set amount for the drugs, even if that differs from what the drugs really cost at the pharmacy. Lock-in-pricing can boost costs for Medicare beneficiaries because they pay a percentage of their drug costs. Also, the practice can more quickly drive consumers into the notorious gap in coverage known as the doughnut hole, where they generally must begin paying the full cost of their medicines. The doughnut hole kicks in when total drug expenditures by the beneficiary and the plan reach $2,510. Medicare drug plans start paying again once total expenditures reach $5,726.

Lock-in pricing “has a detrimental effect on the beneficiary because it pushes him into the coverage gap faster,” says Abby Block, director of the arm of the government’s Centers for Medicare and Medicaid Services (CMS) that runs the drug benefit. Under a current Medicare proposal, PBMs would be allowed to continue claiming the higher prices for reimbursement. But beneficiaries’ own drug costs would be calculated without the extra amounts included.

Pharmacy-benefit managers — including Express Scripts Inc., Medco Health Solutions Inc., and units of CVS Caremark Corp. and UnitedHealth Group Inc. — carry out their functions behind the scenes, including developing lists of covered drugs, maintaining networks of participating pharmacies and paying the pharmacies when beneficiaries buy drugs.

CMS figures that 19% of the hundreds of Medicare drug plans are using lock-in pricing this year, affecting 14% of the 25.8 million enrollees in the Medicare drug program. Other plans use what is known as pass-through pricing, in which PBMs charge insurers the same prices they pay the pharmacies.
CUTTING COSTS

Ways to control costs in a Medicare drug plan:
• Compare drug costs in different plans using the Prescription Drug Plan Finder at medicare.gov/mpdpf.
• Track your drug expenses and progress toward the ‘doughnut hole’ using your explanation of benefits.
• When possible, use generics, which tend to cost less than branded medicines.

Patients who take lots of drugs are most affected by lock-in pricing. For example, one female patient who last year regularly took six generics and two branded drugs had average monthly costs of about $256, according to the patient’s explanation of benefits. At that rate, the patient was on track to reach the doughnut hole in October. But without the PBM’s higher charge based on lock-in pricing, the patient would have paid $215 a month on average for the same drugs — and she wouldn’t have hit the doughnut hole until December, according to an analysis of data provided by the patient’s pharmacist.

The price spreads tend to be much greater for generics than for branded drugs. That’s because generics are much cheaper for pharmacies to acquire, making it easier for PBMs to negotiate down the prices they pay and less noticeable to patients and insurers when the extra costs are included.

PBMs that administer lock-in pricing plans argue that the method is common in the private insurance market and should be available for Medicare as well. Some PBMs say the extra money they make under the pricing method provides funds to encourage more consumers to use lower-cost generic drugs. Express Scripts, for instance, says it analyzes beneficiaries’ drug-purchasing habits and sends patients letters to explain how changes in their purchasing habits could lower their costs. And some companies, including UnitedHealth and CVS Caremark, which operate both as PBMs and insurers, have warned that if those extra amounts aren’t included in drugs’ costs, insurance plans that would be affected by any change may have to increase premiums, the monthly price that seniors pay for the plans.

To be sure, a large majority of older people are satisfied with their Medicare drug-benefit plan and say they are paying less for drugs than they were before the benefit existed, when seniors relied on a hodgepodge of private and public drug benefits, or made do without coverage. In a Wall Street Journal Online/Harris Interactive survey over the Internet of 571 U.S. adults age 65 or older, published in December, some 75% of respondents said their plan had saved them money and 83% said their plan was easy to use. Some 12% said they had to pay the full price for medicines because they had hit the doughnut hole.

The Kaiser Family Foundation projected this spring that the average premium for most Medicare Part D plans would rise nearly 17% to $31.99 a month in 2008 from $27.39 a month last year. That follows an average premium increase of 5.6% in 2007 from a year earlier.

The difference between what PBMs pay pharmacies and what they are reimbursed by insurers under lock-in pricing is generally a secret. Medicare itself doesn’t have this information and therefore doesn’t estimate the total cost of the practice.

For consumers it may be possible to determine the size of the price differences under lock-in pricing by looking at the full cost of your drug listed on your explanation of benefits, and asking your pharmacy how much it was paid. But many pharmacists are prohibited from disclosing pricing information under terms of their contracts with PBMs.

“It is absolutely unacceptable for any government benefit program to be based on questionable [numbers] or numbers that aren’t transparent or easily understood by a beneficiary,” says Michael Burgess, director of the New York State Office for the Aging, who says he was unaware of the issue until recently.

An analysis of explanation-of-benefits documents from consumers and payment data from pharmacies shows that the size of the price differences varies widely from as low as just a few dollars to well over $100. In one case, a patient filled a prescription for a 90-day supply, or 270 pills, of the generic antinausea medication prochlorperazine. The difference between what the PBM, Express Scripts, paid the pharmacy and the price that showed up on the patient’s explanation of benefits was $146.53.

Express Scripts spokesman Steve Littlejohn said it is “extremely rare” for price differences to get above $100, and it occurred in this case because the patient purchased the drug at a quantity greater than is typically prescribed. Broadly, Mr. Littlejohn said that PBM pricing on generics “is very competitive, and is generally far better than [uninsured] cash-paying customers obtain on their own.” He added that the differences on costs of branded drugs are much slimmer and that overall the company’s per-prescription profit margin is a “single digit” percentage.

Medicare has been battling lock-in pricing almost since the inception of the drug-benefit program. But efforts to curtail or stop the practice have faced numerous delays, amid intense lobbying on the subject.

“We thought we had a clear policy” barring lock-in pricing when the drug benefit was created, says Ms. Block of CMS. “We learned that there were different ways of interpreting a policy statement,” she adds.

Under Medicare’s current proposal, PBMs wouldn’t be able to hide the extra costs of drugs. Instead, they would have to declare the extra amounts as “administrative” costs that an insurance plan pays the PBM. Patients’ own drug costs would be calculated without the extra amount included, thereby easing the burden on consumers.

Although the proposal wouldn’t prohibit lock-in pricing, health-cost experts say the transparency and accounting that would be needed to include the extra costs as a separate “administrative” item could effectively curb the practice. CMS hopes to finalize its proposed regulation late this summer to go into effect in 2010.

The PBM trade group, the Pharmaceutical Care Management Association, opposes the CMS proposal because it says insurers should be able to choose what type of pricing they want. The drug benefit “program is working,” says Mark Merritt, the group’s chief executive. “Unless it can be decisively shown that one model offers more end savings for consumers or is decisively able to manage drug [costs] better for the program, we think there ought to be flexibility and choices.”

A spokeswoman for CVS Caremark, which administers Medicare drug plans as a PBM and also sponsors plans through its SilverScript Insurance Co. subsidiary, says lock-in pricing is used in its SilverScript plans and is also common in other Medicare plans for which CVS Caremark serves as the PBM. UnitedHealth says it uses lock-in pricing on United Rx Basic and United Rx Value Medicare plans.

Not all major PBMs use lock-in pricing in Medicare, including Medco Health and Humana Inc., an insurer that acts as its own PBM for its Medicare plans. Humana spokesman Tom Noland says pass-through pricing, the alternative to lock-in pricing, gives patients “the full benefit of our negotiated discounted rates with network pharmacies and also promotes transparency of pricing.”

In the meantime, Medicare drug-benefit participants buying drugs should consider checking low-price sellers of generic medications, such as Costco Wholesale Corp. and Wal-Mart Stores Inc., to see if their retail prices are lower than those in the insurance plan.

That is what Len Steinberg of Scottsdale, Ariz., did, and he found that Costco’s retail price for his generic nasal spray was about half of the drug’s total cost under his plan.

Mr. Steinberg, a 73-year-old retired employee-benefits consultant, says he now pays cash for certain cheap generics at Sam’s Club and Costco, rather than using his drug coverage. That allows him to avoid the doughnut hole and continue receiving coverage for his more expensive branded medications, he says.

Tags: Congress, healthcare, Medicare, Medicare Bill, Medicare Part D, PBM, pharmacies, prescription, prescription drugs, Rx, seniors

WASHINGTON (CNN) — Congress voted to halt planned cuts in Medicare payments to doctors Tuesday, overriding President Bush’s veto in a battle that pitted health insurers against physicians.
President Bush says he objects to the bill because it takes choices “away from seniors to pay physicians.”

President Bush says he objects to the bill because it takes choices “away from seniors to pay physicians.”

The new law stops a 10.6 percent cut in Medicare payments to doctors, part of a scheduled cost-saving formula that went into effect July 1.

The money for the doctors will be taken from the government-subsidized Medicare Advantage program, which the Bush administration strongly supports.

Bush spiked the bill Tuesday, telling lawmakers they would be “taking choices away from seniors to pay physicians.”

“I urge the Congress to send me a bill that reduces the growth in Medicare spending, increases competition and efficiency, implements principles of value-driven health care and appropriately offsets increases in physician spending,” he said in his veto message.

The Senate voted 70-26 to enact the law over Bush’s objections, the third time in his presidency that Congress has overridden his veto. The margin in the House of Representatives was a lopsided 383-41, well beyond the two-thirds majority needed.

The American Medical Association lobbied heavily for the bill, warning that its members could be forced to curtail seeing Medicare patients if the cuts went into effect. But insurers, which receive government subsidies to offer Medicare Advantage plans, warned that 2 million seniors could lose health benefits if it passed.
Don’t Miss

* Kennedy helps break Republican filibuster
* Senate GOP pressured to stop Medicare ‘meltdown’

A total of 21 Senate Republicans joined 47 Democrats and two independents in the override vote.

Supporters broke a GOP-led filibuster of the bill last week, aided by the dramatic return of Sen. Edward Kennedy of Massachusetts. Kennedy’s vote came in his first appearance on the Senate floor since surgery to remove a brain tumor in early June.

Though he did not vote Tuesday, Kennedy praised his colleagues for overriding the “misguided” veto.

“It’s a great vote, and a great day for America’s seniors,” he said in a written statement.

Those Republicans who opposed the bill argued that it would roll back many of the changes made to Medicare in 2003, when Congress created privately run, government-subsidized prescription drug coverage and expanded the role of private insurers in other coverage.

“These are not pro-patient policies,” said Sen. Jon Kyl, R-Arizona. “Rather, the bill reduces access, benefits and choices for Medicare beneficiaries.”

But critics of the 2003 reforms say Medicare Advantage subsidies end up costing more than the government would pay to cover the same people through regular Medicare, the federal health insurance program for seniors. The Congressional Budget Office estimates that the bill will reduce federal spending by $12.5 billion by 2013, largely by reducing Medicare Advantage enrollment.

Sen. Patty Murray, D-Washington, said the bill also made “vital improvements” by supporting rural health care and lowering fees for mental health care.

“Today, we can stand up for Medicare,” she said. “We did it last week, when we came together and voted for this measure by a veto-proof margin, and I believe we can do it today by overriding that veto.”

Congress had passed only two bills over Bush’s objections: a $23 billion water-project legislation that the president vetoed in 2007 and a $300 billion farm bill he spiked in May.

The Medicare system pays for the health care of roughly 40 million elderly Americans. Rising health care costs have made Medicare a growing part of the federal budget, and the stress on the system is increasing as more baby boomers reach retirement age.

While the debate was raging over the bill, the AMA said the cuts could lead to a “meltdown” of the government’s health care system for the elderly.

A recent survey by the group found that 60 percent of physicians will be forced to limit the number of new Medicare patients they can take on if the cuts go into effect.

“We stand at the brink of a Medicare meltdown. … For doctors, this is not a partisan issue; it’s a patient access issue,” AMA President Nancy Nielsen said in a statement after last week’s Senate vote.

The AMA ran radio and TV ads over the July Fourth congressional recess targeting 10 Republican senators, seven of whom are up for re-election.

The AARP, the nation’s largest organization of retired people, and other groups also are weighing in against the cuts.
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Gerald Harmon, a family physician who practices in Pawleys Island, South Carolina, said the cuts could lead to doctors taking fewer Medicare patients, making it difficult for the program’s elderly patients to get the care they need.

“This Medicare access problem is a real issue, not just a political football,” said Harmon, who said 35 percent of his patients were eligible for Medicare. “It affects your dad when he’s sick. It affects my patients in my practice. This has to be addressed.”

Tags: Congress, health insurance, healthcare, Medicare, President Bush, veto

WASHINGTON — Social Security officials, concerned about the risk of identity theft, are calling for immediate action to remove Social Security numbers from the Medicare cards used by millions of Americans.

But Medicare officials have resisted the proposal, saying it would be costly and impractical.

In a new report, the inspector general of Social Security, Patrick P. O’Carroll Jr., says “immediate action is needed.”

“Displaying such information on Medicare cards unnecessarily places millions of individuals at risk for identity theft,” Mr. O’Carroll said. “We do not believe a federal agency should place more value on convenience than the security of its beneficiaries’ personal information.”

In a memorandum to the heads of federal departments and agencies in May 2007, Clay Johnson III, deputy director of the White House Office of Management and Budget, said they should draw up plans to “eliminate the unnecessary collection and use of Social Security numbers within 18 months.”

Social Security cannot prohibit the Medicare agency from using Social Security numbers, although Congress could do so. Federal officials say that more than 40 million people who are 65 and older or disabled have Medicare cards with Social Security numbers on them.

Charlene M. Frizzera, chief operating officer of the Centers for Medicare and Medicaid Services, played down the risk of identity theft from the misuse of Medicare cards. If the government suddenly issued new Medicare cards or identification numbers, she said, it could startle or alarm beneficiaries. “We don’t want to scare them,” Ms. Frizzera said.

Most private insurance companies have abandoned the use of Social Security numbers as identifiers because many states forbid it.

Gail K. Hillebrand, a lawyer at Consumers Union, said, “A person holding a private health insurance card now has more privacy protections than a person holding a Medicare card.”

Byron Hollis, director of the antifraud department at the Blue Cross and Blue Shield Association, said, “Medical identity theft is the fastest-growing form of health care fraud.”

To prevent such fraud, Mr. Hollis said, Blue Cross and Blue Shield plans stopped using Social Security numbers on their cards several years ago. The 39 Blue Cross and Blue Shield companies provide coverage for more than 100 million people.

Ms. Frizzera, the Medicare official, said that issuing new Medicare cards would be “a huge undertaking.” The agency would need three years to plan such a move and eight more years to carry it out, she said.

Medicare officials estimate that it would cost $500 million to change their computer systems if they issued new ID numbers to beneficiaries. Doctors, hospitals and other health care providers use those numbers in filing claims with Medicare, which pays a billion claims a year.

“Many individuals carry their Medicare cards in their wallets or purses and could become victims of identity theft should dishonest individuals steal such items or lift their Medicare number from a beneficiary card or medical document,” Mr. O’Carroll said.

With a solution years away, many individuals are taking their own precautions and signing up for LifeLock and other companies that prevents your identity from being stolen before it happens.

About LifeLock

LifeLock (www.lifelock.com) helps consumers to render their personal information useless to thieves, backing up its service with a million-dollar guarantee. LifeLock is offered to the public for just $10 per month or $110 per year. New members can get a 10% discount by entering promo code JBAZ35 at LifeLock.com.

Tags: Add new tag, Identity Theft, Medicare

WASHINGTON (Reuters) – A $20 billion Medicare refinancing bill, paid for mostly by reducing Medicare’s reimbursement of private health plans, was blocked by U.S. lawmakers on Thursday, raising the likelihood a version with smaller cuts will emerge.

Health insurers such as Humana Inc and UnitedHealth Group would face billions in cuts in two competing versions of the legislation that lawmakers are debating this week.

The legislators face a ticking clock to pass a bill by June 30, or doctors working in the Medicare program would face a 10 percent cut in pay — a highly unlikely outcome in an election year.

A legislative fix is needed to ward off a pending 11 percent pay cut to doctors who work with Medicare patients. Medicare is the federally run insurance plan for roughly 44 million elderly and disabled.

The bill sponsored by Montana Democrat Sen. Max Baucus and backed mostly by Democrats had more drastic cuts, but failed a key procedural vote on Thursday.

Iowa Republican Sen. Charles Grassley, has a competing version of the legislation. His plan would be less pricey, but he also backs some cuts in reimbursement to private plans.

AARP, the nation’s largest advocacy group for older Americans, said the bill would help low-income seniors. In a statement, the group said it is “disturbed” that the bill was blocked.

Scores of other health companies would also be affected by whatever bill emerges, ranging from dialysis companies such as DaVita Inc to oxygen providers such as Apria Healthcare.

Medicare is the top buyer of U.S. health-care goods and services, spending nearly $400 billion a year.

Tags: Congress, healthcare, Medicare

WASHINGTON (Reuters) – A $20 billion Medicare refinancing bill, paid for mostly by reducing Medicare’s reimbursement of private health plans, was blocked by U.S. lawmakers on Thursday, raising the likelihood a version with smaller cuts will emerge.

Health insurers such as Humana Inc and UnitedHealth Group would face billions in cuts in two competing versions of the legislation that lawmakers are debating this week.

The legislators face a ticking clock to pass a bill by June 30, or doctors working in the Medicare program would face a 10 percent cut in pay — a highly unlikely outcome in an election year.

A legislative fix is needed to ward off a pending 11 percent pay cut to doctors who work with Medicare patients. Medicare is the federally run insurance plan for roughly 44 million elderly and disabled.

The bill sponsored by Montana Democrat Sen. Max Baucus and backed mostly by Democrats had more drastic cuts, but failed a key procedural vote on Thursday.

Iowa Republican Sen. Charles Grassley, has a competing version of the legislation. His plan would be less pricey, but he also backs some cuts in reimbursement to private plans.

AARP, the nation’s largest advocacy group for older Americans, said the bill would help low-income seniors. In a statement, the group said it is “disturbed” that the bill was blocked.

Scores of other health companies would also be affected by whatever bill emerges, ranging from dialysis companies such as DaVita Inc to oxygen providers such as Apria Healthcare.

Medicare is the top buyer of U.S. health-care goods and services, spending nearly $400 billion a year.

Tags: Congress, healthcare, Medicare