Will traditional Medicare be privatized?
A quiet test of a new model could broaden the role of managed care
Millions of retirees have opted out of traditional Medicare over the past two decades, choosing to join a privatized, managed-care version of the program. But the choice might not be in their hands alone much longer.
The federal government has quietly launched a large-scale test of a new model for traditional fee-for-service Medicare that critics argue could transform it into another type of privatized managed care. Under the model, Medicare contracts with healthcare provider groups that receive a flat annual payment to provide care for enrollees in the traditional program. Some fee-for-service Medicare enrollees are being moved automatically into these so-called Direct Contracting Entities (DCEs) in 38 states where the pilot test is under way.
And Medicare says it aims to move all traditional Medicare enrollees to “a care relationship with accountability for quality and total cost of care” by 2030.
Learn more in my Reuters Money column.
The Alzheimer’s drug saga continues, and might lead to a Part B premium reduction this year
The unprecedented actions of government regulators continue surrounding Aduhelm - the controversial new Alzheimer’s drug.
Aduhelm was approved last June by the the U.S. Food and Drug Administration in June for the treatment of Alzheimer’s despite objections from the FDA’s own scientific advisory panel, and it carried an astonishing price tag: $56,000 per patient annually.
Aduhelm must be administered health care providers, and thus it was to be covered under Medicare Part B, rather than the Part D prescription drug program. That set the stage for the eye-popping 14.55% increase in the 2022 Medicare Part B premium, to $170.10. When the premium was announced, Medicare stated that part of the increase was due to the need to build a “contingency” reserve to cover the cost of Aduhelm treatments.
But that wasn’t the end of the story. Biogen, the maker of Aduhelm, cut the price in half last month in the face of weak sales and withering criticism of the FDA approval decision. And this week, Medicare announced the results of its own internal review of how Aduhelm and other similar drugs will be covered, stating that it will be covered only for patients participating in clinical trials. That’s about as close as possible to a decision not to cover Aduhelm at all, and the decision to buck the FDA on a drug approval decision is unprecedented.
The question now is whether Medicare will revise the Part B premium. This week, Health and Human Services Secretary Xavier Becerra instructed Medicare to reassess the premium. If a revision is made, the adjustment likely would be made retroactively.
The loss of a fighter for retirement rights
Karen Ferguson passed away in December at age 80 after a battle with cancer. She was not a household name, but most people involved in protecting the retirement security of workers knew and admired her.
Karen was the founder and executive director of the Pension Rights Center, the Washington, D.C.-based non-profit that looks out for the rights of people who have defined benefit pensions.
As a journalist covering retirement, Karen (and her organization) have always been a key go-to resource for me on pensions. Her expertise on the subject was unparalleled - but there’s more to it than that. Karen was one of those people who works quietly to protect the rights of others. Indeed, the Pension Rights Center has had an outsized impact on the lives of working people hoping to retire with dignity and security.
The most recent example of Karen’s work was advocacy for the pension provisions in the American Rescue Act signed into law last year, which allocate grants to struggling multiemployer pension funds that allow them to continue paying full benefits. The bill rescued the retirements of more than one million workers who faced the prospect that the pensions they earned and had been promised might evaporate.
Karen also played a key role in an earlier pension reform that strengthened protections for widows and divorced spouses. Here’s how The New York Times explained that in a moving obituary that ran last month:
Ms. Ferguson had been hearing from widows who weren’t receiving benefits because their husbands, unbeknown to them, had signed away their rights. Ms. Ferguson helped draft, and fought for passage of, the Retirement Equity Act of 1984, which President Ronald Reagan signed into law. Among other things, it required qualified pension plans to provide automatic survivor benefits and allow for waivers only with the consent of both the participant and the spouse.
The fact that Karen was “hearing from widows” is not surprising. As the Times notes, she continued to do one-on-one pension counseling throughout her career, along with her work running the PRC. And she was instrumental in starting the federally-sponsored Pension Counseling and Information Program, which helps people in 30 states to resolve problems they might be having accessing benefits.
The Washington Post also carried an obituary, which included this quote from Ralph Nader, a mentor:
“Karen Ferguson was the great, tireless champion leading the fight to protect endangered worker pensions,” Nader said in a statement. “Unassuming and unsung, she was both the brains and the national networker of efforts behind pension law. Her quiet, authoritative influence was felt on Capitol Hill, in executive suites, on the shop floors, and among specific pensioners needing immediate help.”
What I’m reading
Notes from the end of a very long life - the last in a series on the oldest New Yorkers, by John Leland . . . Helen Dennis on what she’s learned by writing 1,000 columns on retirement . . . Why older women face greater financial hardship than men . . . NextAvenue’s managing editor says goodbye, but not farewell . . .
Amazing
The Webb Space Telescope Will Rewrite Cosmic History. If It Works