As I’ve been mentioning in recent workshops, huge changes are being implemented that will vastly affect Medicare patients.
However, these changes that were initially anticipated to take effect in 2013 are happening NOW. According to the California Healthline, the Hospitals Readmissions Reductions Program—part of the Affordable Care Act—is being implemented THIS MONTH.
The following is a case study that might help you understand changes effective October 2012:
John has a heart attack and is admitted into Hospital A; Hospital A spends $100,000 on John’s care. In another case, Jane has a heart attack and is admitted into Hospital B; Hospital B spends $20,000 on Jane’s care.
In the past, both hospitals would bill Medicare for the amount spent on the patients care. Under the new healthcare policies however, the amount billable to Medicare is based on the hospital that spends the least to stabilize the patient—in this case Hospital B. Although Hospital A was providing A+ care and Hospital B providing D- care, the new healthcare policy disregards the quality of care being provided and only considers the price. This means that now Hospital A will only provide D- care because that is what they will be paid for.
In addition, if hospitals bill for the targeted amount of $20,000, they get a bonus. Hospitals are essentially being incentivized to provide you with lower quality care.
This is a BIG problem. This means that patients may leave the hospital, stable, but far from better—and now with the Hospital Readmissions Reduction Program, you cannot re-enter the hospital within 100 days for the same health condition—you probably will be DENIED re-admittance. This is happening NOW!
On another unfortunate note, CalPERS is considering imposing a 75% premium hike for their current long-term care insurance policyholders that would take effect in mid 2015. Policyholders would pay hundreds, maybe even thousands of dollars more per year for the same benefits, or alternately face a variety of cutbacks to their policies. This affects 150,000 or so Californians who currently buy long-term care insurance from CalPERS— not counting the many that were denied long-term care benefits starting in 2008. According to the US Dept. of Health and Human Services, 70% of all Americans over 65 years of age will eventually need some sort of long-term care.
It is getting more difficult and more expensive to plan for your retirement. This is why early financial planning is important now more than ever.