was set

was

Ju

to expire last December but extended to Recommendation #13 of the National Commission on Social Sec issued last month calls for the authority for interfund borr OASI Trust Fund from the Hospital Insurance Trust Fund to until 1987.

Reportedly more than $12.4 billion has been borrow Hospital Insurance Trust Fund already, and further large expected. In considering reforms affecting the OASI Trust Fu must also address the issue of the Hospital Insurance Tru provide assurances that the hospital fund will be resto strength as soon as possible to avoid a Medicare funding cr solely as a result of interfund borrowing. We do not b Medicare beneficiaries should be penalized, possibly by benef due to a Medicare bail-out of Social Security.

We recognize the difficulty of the issue facing the Co respect to Social Security and appreciate the efforts of t Commission on Social Security Reform. The AMA truly hopes th will act to provide both a short-term and a long-term solut problems of financing Social Security. We urge Congress to fate of the last major modifications in the Social Security pr were intended to carry Social Security "through the end of th yet proved to be little more than a "band-aid" solution that a few years before severe problems resurfaced.

There is a need to do what is necessary, i.e., to "bite th in that regard, the AMA supported the provision in TEFRA federal employees to Medicare contribution requirements; like AMA supports the recommendation of the Commission on Social Sec new federal employees be asked to contribute to Social Secur Congress should explore the desirability of including all employees within the system. In addition, the AMA offers the that Congress may wish to consider increasing the HI portio

BY EDITH EDELSON, chairperson

HEALTH/WELFARE TASK FORCE

NJ FEDERATION OF SENIOR CITIZENS

PROBLEMS WITH MEDICARE B

Medicare, originally enacted to reduce medical costs for has instead proven to be a bonanza for providers, so that c pay more for medical services today than they did before Me was enacted.

One reason for this is the provision in the Medicare law providers that there would be no interference with their fe there is no negotiation of fees as there is between Blue Shield and providers. Nor are doctors mandated to accept M reimbursement as the full payment.

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IT IS URGENT THAT THIS PROVISION BE REPEALED. Another problem with Medicare reimbursement is the law pi that the "reasonable" charge shall be the lowest of the act the customary charge and the prevailing charge. The prevail is capped by an "economic index" which by law is based on ou data. The source of these charges and the methodology are c by the Secretary of HHS and the carrier (Prudential in New J Data used are not only outdated but also inaccurate and ever priate.

The result is that Medicare covers only about 40% of the costs to the consumer, and only about 20% of physicians in N accept Medicare on assignment (i.e., as complete payment). is under-utilization of medical services resulting in many c acute illness, deterioration of chronic illnesses, hospitali or institutionalization the most expensive forms of medica

THE LAW SHOULD BE CHANGED SO A MORE REALISTIC
FORMULA THAN "REASONABLE CHARGE" WOULD BE USED
AS A BASIS FOR REIMBURSEMENT.

THE PRESIDENT'S MEDICARE PROPOSALS

The President has proposed a cut of more than $1.8 billio Medicare for Fiscal Year '84. Almost all of these cuts woul crease the cost-sharing by patients.

Hospital copayments

The proposal to eliminate the present hospital stays in excess of 60 days while imposing copays fo from the 2nd to the 60th day helps 2% of the patients but cr great hardship for 98% of them. With an average stay of 11 the 98% would pay an extra average of $280, which would

go as high as $1179 for some. These copays are scheduled to annually as first day deductibles increase. These copays wo an intolerable burden which many could not possibly pay. Th be an increase in bad debts that would burden hospitals and companies as well as the patients.

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Medicare premiums and deductibles would be increased.
Medicare B premiums would be as high as 35% of the Medicare |
Many seniors could not afford this, nor would they be able to
Medi-gap insurance that would cover these increases.

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only

Payments to physicians would be frozen at the '83 level for this would not really create any hardship for doctors patients since they would be obliged to make up the differen tween Medicare's reimbursement and the doctor's charge; fewe would be willing to take Medicare on assignment; many would their fees, and patients would postpone visits to the doctor result in many cases would be hospitalization.

Vouchers Medicare beneficiaries would be able to buy privat insurance instead of being covered by Medicare beginning in i through the use of vouchers valued at 95% of the average payn beneficiaries. Very likely the insurance companies would ex the very sick, resulting in a higher per/person cost to Medic

All of the above proposals would endanger the health of th tired and disabled people, and might even prove to be more co to government in the long run.

Our difficulties under Medicare point to the need for a Na Health Program for all.

Attached is an analysis of the problems with the reimburs under Medicare B as well as suggested remedies.

te the present copays on Osing copays for stays patients but creates a

age stay of 11 days, hich would

SYNOPSIS OF PROBLEMS WITH MEDICARE REIMBURSEMENT

12/6/81

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in New Jersey