MONEY Health Care

The Most Expensive Medicare Mistake You Can Make

hospital patient in bed
Masterfile—Radius Images

Hundreds of thousands of people skip this key step.

Tens of millions of Americans rely on Medicare to help cover their healthcare costs after they retire. Yet as simple as the program might seem, many people make a mistake in claiming their Medicare coverage that can lead to their having to bear higher costs for their healthcare needs for the rest of their lives.

This key Medicare mistake involves what seems like a simple process: signing up for Medicare in the first place. As long as you follow the right rules in applying for and getting onto Medicare, then you can steer clear of potential problems. If you slip up, though, the consequences will haunt you for a lifetime. Let’s take a closer look at a mistake that currently affects hundreds of thousands of people with the goal of making sure you never become one of them.

Signing up for Medicare

Most people jump at the chance to enroll in Medicare at their first opportunity, given the benefits that it offers at a price that’s typically lower than any available alternatives. Indeed, if you’re already receiving Social Security benefits before you reach the usual Medicare eligibility age of 65, you’ll automatically get enrolled for Medicare in most cases, starting on the first day of the month of your 65th birthday. Disability recipients also automatically get Medicare after receiving 24 months of benefits from Social Security Disability or similar programs.

For many people, though, those automatic enrollment provisions won’t apply, and they’ll have to enroll on their own. The initial enrollment period for Medicare begins three months before you turn 65 and ends three months after your 65th birthday.

The reason the initial enrollment period is so important is that there are consequences if you don’t sign up for Medicare on time. Late-enrollment penalties can be onerous, with the most common one that people face involving Medicare Part B coverage for medical insurance. Specifically, for every full 12-month period that you go without enrolling, your Part B premiums will go up by 10%.

That might not sound like much, given that the typical Part B premium for 2015 is $104.90 per month for most Medicare participants. But for those who go for multiple years without applying for Medicare, a 20%, 30%, 40% or greater increase in monthly premiums adds up to several hundred dollars per year in penalties. Moreover, those late-enrollment penalties never go away, and you’ll have to pay them for as long as you have Part B coverage throughout your lifetime.

Other penalties can affect a limited number of recipients. Most people get Medicare Part A for free, but if you have to pay premiums, they’ll go up if you sign up late. Part D prescription drug penalties can also apply, with charges based on a percentage of a predefined typical premium amount multiplied by the number of months you weren’t covered.

Special enrollment to the rescue
Fortunately, there are some provisions to help some of the people who might otherwise face Medicare penalties. The most common involves what are known as special enrollment periods.

Those who are still working when they turn 65 are most likely to qualify for a special enrollment period. If you have qualifying group health plan coverage based on either your job or your spouse’s job, then you can sign up for Medicare at any time as long as you or your spouse is still working and you’re still covered under the employer group plan.

Moreover, when you finally do retire from your work, Medicare grants you an additional eight-month special enrollment period starting the month after the job ends. Usually, as long as you sign up for Medicare during that special enrollment period, you won’t have to pay a late enrollment penalty.

It’s important to realize, though, that not all insurance coverage qualifies to give you a special enrollment period. Specifically, if you have continuing coverage under COBRA, or if your employer provides retiree health insurance, you won’t be eligible for a special enrollment period when that coverage ends. Only coverage based on current employment qualifies.

As long as you’re aware of these rules, it’s easy to follow them and avoid a costly Medicare mistake. Given how important Medicare is for your healthcare finances in retirement, the savings from following the rules can be well worth paying a bit of attention as your 65th birthday approaches.

TIME Diet/Nutrition

12 Reasons Why Dehydration Is Bad for Your Body

Being dehydrated can take a toll on your body and even your mind

It doesn’t take much to become dehydrated. Lose just 1.5% of the water in your body (the human body is usually about 60% H2O), and you’ve reached the tipping point of mild dehydration. It can be brought on by many things—and it can do much more to your body than just make you feel thirsty. Dehydration also brings on health effects ranging from fatigue and smelly breath to more dangerous consequences like distracted driving.

It gives you bad breath

It’s easy to forget to drink water during a busy workday, but at the end of the day you may find people standing unusually far from you when you open your mouth. “Dehydration can give you bad breath,” says Marshall Young, DDS, a dentist in Newport Beach, Calif. “Saliva has important antibacterial properties. When dehydrated, the decreased saliva in the mouth allows bacteria to thrive, resulting in bad breath.” So drink up for your own sake, and for those around you as well.

It makes you crave sugar

Dehydration can mask itself as hunger, particularly sugar cravings. This may happen particularly if you’ve been exercising, says Amy Goodson, RD, sports dietitian for the Dallas Cowboys. “When you exercise in a dehydrated state, you use glycogen (stored carbohydrate) at a faster rate, thus diminishing your stores more quickly.” So once you finish exercising, you will likely crave carbs to help you replenish those glycogen levels and get you ready for your next exercise bout.

It wrecks your workout

Even being slightly dehydrated affects your ability to put effort into your workout. “A 2% dehydration level in your body causes a 10% decrease in athletic performance,” says Goodson. “And the more dehydrated you become, the worse performance gets.” Measured by “perceived exertion,” how hard you feel you’re exercising, you might be working at a 6 but you feel like you are working at an 8, says Goodson.

It dries your skin out

Keeping skin healthy and glowing requires drinking enough water, says Anne Marie Tremain, MD, a dermatologist with Laser Skin Care Center Dermatology Associates in Long Beach, Calif. “It’s best to hydrate from the inside out,” she says. “Depending on your lifestyle you may need to adjust your water intake.” If you work out every day or are a caffeine fiend, for instance, then you’ll need to drink more., because workouts make you sweat and caffeine is a diuretic, which can dehydrate you. For smooth, moisturized skin, Dr. Tremain also suggests keeping showers short (less than five minutes) and using only lukewarm water as hot water can dry your skin out even more.

It may affect your ability to drive safely

Few things are more uncomfortable than being stuck in traffic or on a long drive when you need to use the restroom. Logically, it makes sense to simply not drink water before hitting the road. But new research published in Physiology and Behavior shows that the number of driving errors doubled during a two-hour drive when drivers were dehydrated versus hydrated—an effect similar to driving while drunk (defined by most states as .08% blood alcohol). Since often people purposely avoid drinking prior to a long road trip to prevent bathroom stops, dehydration could increase the risk of traffic accidents.

It makes you tired

A mid-afternoon slump may have more to do with hydration than you think. “When you’re dehydrated your blood pressure drops, heart rate increases, blood flow to the brain slows – all of which can make you tired,” says Luga Podesta, MD, sports medicine specialist at Kerlan-Jobe Orthopaedic Clinic in Los Angeles, Calif. A lack of water to muscles also makes physical tasks feel more difficult and tiring.

It sours your mood

Cranky much? Drink a glass of water and your mood may change. “Neurological effects of dehydration can cause irritability,” says Dr. Podesta. A small study published in the Journal of Nutrition tested mood and concentration in 25 young women who were either given enough fluids to remain properly hydrated, or who became mildly dehydrated by taking diuretics and exercising. The dehydrated women—who were at a level that was just 1% lower than optimal—reported headaches, loss of focus, and irritability.

It can give you the chills

It may seem counterintuitive, but dehydration can bring on chills. “This occurs because your body starts to limit blood flow to the skin,” says Dr. Podesta. In addition, water holds heat, so if you become hydrated it can be more difficult to regulate your body temperature, which can make you become chilled faster, even when you’re not in a cold environment.

It can cause muscle cramps

A lack of water causes less blood circulation, which can make muscles cramp up, says Ray Casciari, MD, medical director of the La Amistad Family Health Center in Orange, Calif. “The body will protect its vital organs, so it shifts fluid away from muscles and anything that’s not vital,” he says. Muscle cramps can be extremely painful, making muscles feel harder than normal to the touch. Changes in sodium and potassium through sweat loss can also contribute to cramping.

It makes you feel dizzy and foggy

Along with muscles, your brain also gets less blood circulation when you’re low on water, which can make you dizzy, says Dr. Casciari. Additionally, mild dehydration may affect your ability to take on mental tasks and cause you to feel foggy headed, according to a study from the British Journal of Nutrition. Interestingly, a study that appeared in the Journal of Nutrition showed greater mood changes in women than in men, both at rest and during exercise.

It can give you a headache

Dehydration can cause headaches in a couple of different ways. “Lack of water affects your body’s serotonin levels, which can give you headaches,” says Dr. Casciari. In addition, small blood vessels in the brain respond quickly to hydration levels (which is also behind hangover headaches), leading to dull aches and even full-blown migraines. Try downing a glass or two of water the next time you have a headache and you may discover it disappears. You could also eat fruit, which contains a high percentage of water, Dr. Casciari suggests.

It constipates you

Your body needs water to keep things moving through your colon. When you’re not getting enough H2O, your body compensates by withdrawing more fluid from stool, making it harder and more difficult to pass. That said, it’s worth noting that drinking more water when you’re already properly hydrated won’t necessarily relieve constipation caused by other factors, like the medications you’re taking, medical conditions, or a lack of fiber in your diet.

This article originally appeared on Health.com.

Read next: 12 Mental Tricks to Beat Cravings and Lose Weight

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MONEY health insurance

Why Too Many Health Insurance Choices Are Costing You Money

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David Malan—Getty Images

Consumers are bewildered by dozens of health plan options—and they're making expensive mistakes. Insurers could learn from 401(k) plans.

It’s time for health insurance plans to take a page out of 401(k) playbooks. People need simpler choices, as well as guidance that will nudge them toward the best plan for their needs.

That’s what 401(k)s are designed to do—though it took years for plans to evolve. As the traditional employer-managed defined benefit pension began to disappear, the early generations of 401(k)s and other defined contribution plans presented workers with new and complicated sets of investment choices.

Employees were so overwhelmed that many did nothing, leading Congress to pass reform laws to simplify 401(k) decisions, including providing default plan choices and using auto-enrollment—putting employees into plans unless they opt out. Today many employers are going a step further by turning 401(k)s into pension-like plans, removing the need for decisions unless workers choose to make them.

But health insurance is still stuck in an old-school 401(k) world. Obamacare exchanges have created extensive menus of plan choices that many consumers don’t understand. The exchange concept has also become popular among employer plans for both current workers and retirees. Exchange providers, led by big employee-benefits firms, are signing up lots of health insurers to offer employers and their workers extensive sets of plan choices.

The confusion extends to Medicare, as consumers are often required to choose among 30, 40 or more Medicare Advantage plans or Part D prescription drug plans. They are simply overmatched by the task, research shows.

As with 401(k)s, the primary problem consumers face with health insurance choices is that they don’t understand how the policies work, studies show. Nor do they understand the industry jargon—in the case of health insurance, that may mean even basic terms like deductibles and co-payments.

Consider this alarming study: A Fortune 100 company offered 48 new health insurance plans to more than 50,000 employees. All of the plans were offered by the same health insurer and offered identical coverage. They differed only by premiums, deductibles and other cost-sharing variables.

In roughly 80% of their selections, workers made bad decisions—opting for the low-deductible but high-premium plans that cost them more money yet provided no additional insurance protection. Lower-income and female employees made particularly bad choices.

The amounts of wasted money often equaled 40% or more of the employee’s annual premium expenses. Employees who chose low-deductible plans paid $631 more on average in premiums, but saved only $259 a year in out-of-pocket costs compared with available higher-deductible plans.

Even more discouraging, when researchers went back and told employees about their mistakes, it had very little effect. More than 70% of employees did not understand insurance well enough to make an informed choice. Further, it had never occurred to the workers that their employer would include lousy choices in its plan offerings, the researchers found.

Improving insurance literacy is crucial in helping employees understand how to make better choices. But as behavioral research with 401(k)s has shown, the most effective solution is to reduce the number of plan choices and their complexity.

“The promise of recent reforms that expand choice and aim to increase provider competition is premised on the assumption—challenged by our research—that enrollees will make sensible plan choices,” the researchers concluded.

So how can you be a better health care consumer? Justin Sydnor, one of the researchers and an economist at the University of Wisconsin business school, suggests the dreaded school math-class crucible: the story problem. First consider how much you expect to spend on health care. Then calculate whether your total payments would be higher with a low-deductible plan or a high-deductible plan. Asking people to compare premiums with out-of-pocket expenses helped set his research subjects on the right course.

If you’re not sure how to estimate your future health care spending (and that’s true for most people), run several calculations based on varying medical costs, Syndor says. For example, what would your out-of-pocket costs be if your health expenses were, say, $2,000 or $5,000 or $10,000 over the next year? You also can seek help from their employer’s health plan administrator or from the free counseling available for Obamacare and Medicare enrollees.

Philip Moeller is an expert on retirement, aging, and health. He is co-author of The New York Times bestseller, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” and is working on a companion book about Medicare. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

Read next: Americans with Obamacare Are Still Afraid of Big Medical Bills

MONEY Insurance

6 Ways You’re Overpaying for Insurance

Kristina Lindberg—Getty Images

Yes, you can be too cautious. When the costs far outweigh the benefits, it's time to drop extra coverage.

If you really want to be safe, you could buy insurance for just about everything in your life. You can insure your car, home, life, possessions, and can even buy insurance to cover your funeral costs. But with all of that money going out the door, you might not have enough left over to enjoy those things you’re insuring.

Sometimes, the costs of insurance outweigh the benefits, and the money spent on premiums could be better spent elsewhere. Here are six times when it’s worth considering dropping insurance coverage.

1. Collision Coverage

Collision coverage protects your car if it’s damaged or suffers a total loss in an accident that you’re at-fault for. If you’re still paying off or leasing a car, your lender may require such coverage until you own the car outright.

But because vehicle values depreciate every year, the insurer will only pay up to the actual cash value of your car after you’ve paid the deductible. A vehicle’s condition is also factored, so knowing every year your car’s actual cash value — or Blue Book value — can help you determine if you should drop collision coverage.

One rule of thumb is to skip collision coverage if the vehicle’s cash value drops below $4,000. The cost of insurance for a low value car could cost more than the total vehicle repair and replacement costs in an accident.

Another rule is that if collision insurance costs more than 10% of the value of the car, then it’s worthwhile to drop it and put that savings aside for a new car. For example, if collision coverage costs $200 a year on a car valued at $2,000, it’s worth keeping the premium for yourself.

However, if you don’t have enough money set aside to pay for a major vehicle repair after an accident, then you may want to keep collision coverage.

It’s also worth having in case you are at-fault in an accident. Collision coverage is needed in such simple accidents as you rear-ending someone at a stoplight, running a stoplight and hitting someone, or backing out of your garage and hitting another car. Without it, you’ll have to pay out of your own pocket to repair the other driver’s car.

You also may want to consider where you’re driving before dropping collision insurance. Some areas aren’t as safe as they might seem, according to Auto Insurance Center. Some rural areas are more deadly to drive in than urban areas, the site found.

2. Comprehensive Auto Insurance

This type of auto insurance is usually sold together with collision coverage. Your insurance company may require having both. A comprehensive-only policy may be limited to special circumstances, such as for a classic car that’s rarely driven.

Comprehensive coverage covers you if the car is stolen, vandalized, or is damaged by fire, weather, natural disasters, or acts of God. It also provides coverage if you hit a house in a one-car accident, a deer or other animal runs into your car, you hit a fence, or experience damage in a riot.

Like collision coverage, it could be worthwhile to drop comprehensive coverage if your car isn’t worth much and repairing such damage would be more than the value of the car.

However, comprehensive is usually a small part of an insurance premium, and you may not be able to drop it unless you also drop collision coverage.

3. Rental Reimbursement

Some insurers include rental car reimbursement in their policies. You may need a rental car if your car is damaged in an accident and is at an auto shop for a few days. But if the accident is someone else’s fault, their insurance may pay for your rental car. If you’re at fault, it’s your expense.

Check to see how much you’re paying each month, or year, for this type of insurance, and determine if the costs outweigh what you’d pay yourself for renting a car. Is it worth the chance you’ll need it?

4. Roadside Assistance

The same logic goes with roadside assistance sold with your car insurance. Chances are you rarely use it and that you have it mainly for the peace of mind when you get on the road.

You may already have duplicate coverage by having AAA, OnStar, or some other service, so dropping this insurance coverage is a no-brainer. Or it may be cheaper to call a friend, relative, or even a tow truck when you’re out of gas or need a flat fixed.

5. Term Life Insurance

Having term life insurance is meant for exactly that: a “term” of your life. It’s a common type of insurance to buy when starting a family, so that your spouse and children aren’t left without income if you die during your working life.

But if your children are in college and no longer live at home, or you’re retired, then extending a term policy may not be worthwhile.

6. Insurance Riders

As part of your homeowners insurance, you may have bought riders to cover expensive items that aren’t covered under a normal policy. These can include expensive artwork, jewelry, or heirlooms you’ve inherited.

If you’ve sold such things or donated them to charity and no longer own them, then it’s time to drop these insurance riders.

Having too much insurance is an enviable problem. Whether it’s life insurance or over-insuring a home and its possessions, it’s a good idea to check with your insurance agent each year to determine if you have too much (or not enough) coverage.

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MONEY Health Care

The Danger Lurking in Your Medical Bills

Claire Benoist

Medical billing errors are more common—and more costly—than you might think. Here's how to give your bills a checkup.

Odds are, there’s a mistake in the medical bill that’s in your mailbox. A recent NerdWallet analysis of 2013 hospital audits by Medicare found that an average 49% of bills contained errors, and that some medical centers messed up on more than 80% of claims to Medicare.

Such errors now matter more than ever to consumers: Greater health insurance cost sharing means that a mistake can take serious money out of your pocket. “If you’re responsible for the first $5,000 or $10,000 of your care, you’re going to want to be more attentive,” says Stephen Parente, a professor at the University of Minnesota’s Carlson School of Management who studies health finance.

But billing errors can be tough to spot, and tougher to remedy. Disputes can go on for months, and if you don’t take the right steps, your account could be put into collections in the meantime—a recent report by the Consumer Financial Protection Bureau found that a whopping 52% of all debt on credit reports is due to medical bills. Follow these steps to ensure a clean bill of health:

Understand your bill

Step one is knowing exactly what you’re being charged for. Can’t tell from the bill? Ask the provider for an itemized statement, says Pat Palmer, CEO of Medical Billing Advocates of America, a professional organization that assists individuals and companies with medical costs and disputes. Doctors use standardized numerical “CPT” codes to categorize treatments, and you can Google the numbers to find out what they stand for.

Question discrepancies

If the price strikes you as high for the services rendered, “follow your gut and investigate,” says Mark Rukavina, principal at Community Health Advisors, a hospital consultancy. Your insurer may offer an online price transparency tool. If not, try Guroo.com, a website that shows the average cost by area for 70 non-emergency diagnoses and procedures. A big discrepancy suggests that you should start asking questions.

Next, compare the bill to the explanation of benefits you get from your insurer. If these differ on the amount you owe, that can be another red flag, says Erin Singleton, chief of mission delivery at the nonprofit Patient Advocate Foundation.

Source: Consumer Financial Protection Bureau

Diagnose errors

Even if you don’t have sticker shock, give your invoice a close read. Some common mistakes can be easy to spot. They include services that weren’t performed, tests that were canceled, and duplicate charges, says Kevin Flynn, president of HealthCare Advocates.

Palmer says one of the more frequent errors she sees is providers charging patients separately for things that are supposed to be under one umbrella, such as a tonsillectomy and adenoid removal. Ask your provider about this if you are billed item by item for something that might be one procedure.

Remedy the problem

When you spot an error, ask the billing department to start a formal dispute. Put your concerns in writing. Include any documentation you have and request that the provider support its claim as well, says Palmer. Also, notify your insurer, which can be a good ally if the company will be on the hook for part of the charge.

Typically you don’t have to pay disputed charges until the investigation is complete, but do pay the rest of the bill. And always respond promptly to billing communications so that charges aren’t sent to collections. That’s a very real risk; one in five credit reports is married by medical debt, with an average of $579 in collections. Fortunately, relief is on the way—the three major credit agencies recently agreed to institute within the next few years a 180-day grace period before adding medical debt to credit reports (now there is no official grace period) and to remove debt from a report if the insurer pays the bill.

Rukavina says that, with persistence, you should be able to resolve most disputes on your own. But if you’ve been fighting to no avail for more than a month or so, consider hiring a medical billing advocate to work on your behalf. Find one via billadvocates.com or claims.org. You’ll likely pay an hourly rate starting at around $50 or a fee of about 30% of what you’ll save. But that could be pocket change compared with what you’d owe otherwise, not to mention what a ding to your credit score could cost you.

Read Next: The Debt You Don’t Know You Have

MONEY Medicare

Congress Just Passed a Medicare ‘Doc Fix.’ Here’s What That Means to You

doctor with money in his lab coat pocket
Peter Dazeley—Getty Images

Both houses have approved an overhaul to how Medicare reimburses doctors. Will that mean higher costs for seniors?

Medicare’s troubled physician payment formula will soon be history.

As expected, the Senate Tuesday night easily passed legislation to scrap the formula, accepting a bipartisan plan muscled through the House last month by Speaker John Boehner and Democratic leader Nancy Pelosi. The Senate vote came just hours before doctors faced a 21% Medicare pay cut.

Under the bill, the current reimbursement schedule would be replaced with payment increases for doctors for the next five years as Medicare transitions to a new system focused “on quality, value and accountability.” Existing payment incentive programs would be combined into a new “Merit-Based Incentive Payment System” while other alternative payment models would also be created.

“Passage of this historic legislation finally brings an end to an era of uncertainty for Medicare beneficiaries and their physicians—facilitating the implementation of innovative care models that will improve care quality and lower costs,” said Dr. James L. Madara, chief executive officer of the American Medical Association. “Patients will be able to get the care they need and deserve.”

The Senate voted 92 to 8 to approve the legislation, which the House passed 392-37.

It now moves to President Barack Obama, who—shortly after the Senate vote—said he would sign the bill, calling it “a milestone for physicians, and for the seniors and people with disabilities who rely on Medicare for their health care needs.”

There’s enough in the wide-ranging measure for both sides to love or hate. “Like any large bill it’s a mixed bag in some respects, but I think on the whole it’s a bill well worth supporting,” Senate Majority Leader Mitch McConnell, R-Ky., said Tuesday.

The bill includes two years of funding for an unrelated program, the Children’s Health Insurance Program, or CHIP. GOP conservatives and Democrats are unhappy that the package isn’t fully paid for, with policy changes governing Medicare beneficiaries and providers paying for only about $70 billion of the approximately $210 billion package. The Congressional Budget Office has said the bill would add $141 billion to the federal deficit.

Consumer and aging organizations also have expressed concerns that beneficiaries will face greater out-of-pocket expenses on top of higher Part B premiums to help finance the way Medicare pays physicians.

But lawmakers said they had struck a good balance in their quest to get rid of the old system. “I think tonight is a milestone for the Medicare program, a lifeline for millions of older people,” said Sen. Ron Wyden, D-Ore. “That’s because tonight the Senate is voting to retire the outdated, inefficiency rewarding, common sense-defying Medicare reimbursement system.”

For doctors, the passage is an end to a familiar but frustrating rite. Lawmakers have invariably deferred the cuts prescribed by a 1997 reimbursement formula, which everyone agreed was broken beyond repair. But the deferrals have always been temporary because Congress has not agreed to offsetting cuts to pay for a permanent fix. In 2010, Congress delayed scheduled cuts five times.

Here are some answers to frequently asked questions about the legislation and the congressional ritual known as the doc fix.

Q: How would the bill change the way Medicare pays doctors?

The House package would scrap the old Medicare physician payment rates, which were set through a formula based on economic growth, known as the “sustainable growth rate” (SGR). Instead, it would give doctors an 0.5% bump in each of the next five years as Medicare transitions to a payment system designed to reward physicians based on the quality of care provided, rather than the quantity of procedures performed, as the current payment formula does. That transition follows similar efforts in the federal health law to link Medicare reimbursements to quality metrics.

The measure, which builds upon last year’s legislation from the House Energy and Commerce and Ways and Means committees and the Senate Finance Committee, would encourage better care coordination and chronic care management, ideas that experts have said are needed in the Medicare program. It would reward providers who receive a “significant portion” of their revenue from an “alternative payment model” or patient-centered medical home with a 5% payment bonus. It would also allow broader use of Medicare data for “transparency and quality improvement” purposes.

House Energy and Commerce Committee Chairman Fred Upton, R-Mich., one of the bill’s drafters, has called it a “historic opportunity to finally move to a system that promotes quality over quantity and begins the important work of addressing Medicare’s structural issues.”

A “technical advisory committee” will review and recommend how to develop alternative payment models. Measures will be developed to judge the quality of care provided and how physicians will be rewarded or penalized based on their performance. While the law lays out a structure on how to move to these new payment models, much of their development will be left to future administrations and federal regulators. Expect heavy lobbying from the physician community on every element of implementation.

Q. Will seniors have to help pay for the plan?

Starting in 2018, wealthier Medicare beneficiaries (individuals with incomes above $133,500, with thresholds higher for couples), would pay more for their Medicare coverage, a provision expected to impact 2% of beneficiaries.

In addition, starting in 2020, “first-dollar” supplemental Medicare insurance known as “Medigap” policies would not be able to cover the Part B deductible for new beneficiaries, which is currently $147 per year but has increased in past years. If the policy had been implemented in 2010, it would have affected Medigap coverage for roughly 10% of all 65-year-olds on Medicare, according to an analysis from the Kaiser Family Foundation. Based on declining Medigap enrollment trends among 65-year-olds, expect this policy to impact a smaller share of new Medicare beneficiaries in the future, according to the study. (KHN is an editorially independent program of the foundation.)

Experts contend that the “first-dollar” plans, which cover nearly all deductibles and co-payments, keep beneficiaries from being judicious when making medical decisions because they are not paying anything out-of-pocket and those decisions can help drive up costs for Medicare.

The bill also includes other health measures — known as extenders — that Congress has renewed each year during the SGR debate. The list includes funding for therapy services, ambulance services and rural hospitals, as well as continuing a program that allows low-income people to keep their Medicaid coverage as they transition into employment and earn more money. The deal also would permanently extend the Qualifying Individual, or QI program, which helps low-income seniors pay their Medicare premiums.

AARP, a seniors’ lobby group, sought to repeal a cap on the amount of therapy services Medicare beneficiaries could receive, telling senators that it would be a “key vote” for the organization.

“Similar to the SGR debate, an extension of the therapy cap — rather than full repeal — is short-sighted and puts beneficiaries in a dire situation when the extension expires,” AARP Executive Vice President Nancy LeaMond wrote in a letter to senators. “This amendment is important to the overall success of the Medicare program and the health and well-being of Medicare’s beneficiaries.” The amendment failed.

Q. What about other facilities that provide care to Medicare beneficiaries?

Post-acute providers, such as long-term care and inpatient rehabilitation hospitals, skilled nursing facilities and home health and hospice organizations, would help finance the repeal, receiving base pay increases of 1% in 2018, about half of what was previously expected.

Other changes include phasing in a one-time 3.2 percentage-point boost in the base payment rate for hospitals currently scheduled to take effect in fiscal 2018.

Scheduled reductions in Medicaid “disproportionate share” payments to hospitals that care for large numbers of people who are uninsured or covered by Medicaid would be delayed by one year to fiscal 2018, but extended for an additional year to fiscal 2025.

Q. What is the plan for CHIP?

The bill adds two years of funding for CHIP, a federal-state program that provides insurance for low-income children whose families earned too much money to qualify for Medicaid. While the health law continues CHIP authorization through 2019, funding for the program had not been extended beyond the end of September.

The length of the proposed extension was problematic for Democrats, especially in the Senate. In February, the Senate Democratic caucus signed on to legislation from Sen. Sherrod Brown, D-Ohio, calling for a four-year extension of the current CHIP program. A Senate amendment to extend CHIP funding for four years failed.

Q. What else is in the SGR deal?

The package, which Boehner, R-Ohio, and Pelosi, D-Calif., began negotiating in March, also includes an additional $7.2 billion for community health centers over the next two years. NARAL Pro-Choice America and Planned Parenthood have criticized the provision because the health center funding would be subject to the Hyde Amendment, a common legislative provision that says federal money can be used for abortions only when a pregnancy is the result of rape, incest or to save the life of the mother.

In a letter to Democratic colleagues before the House vote, Pelosi has said that the funding would occur “under the same terms that Members have previously supported and voted on almost every year since 1979.” In a statement, the National Association of Community Health Centers said the proposal “represents no change in current policy for Health Centers, and would not change anything about how Health Centers operate today.”

Q. How did the doctor payment formula become an issue?

Today’s problem is a result of efforts years ago to control federal spending — a 1997 deficit reduction law that set the SGR formula. For the first few years, Medicare expenditures did not exceed the target and doctors received modest pay increases. But in 2002, doctors were furious when their payments were reduced by 4.8%. Every year since, Congress has staved off the scheduled cuts. But each deferral just increased the size of the fix needed the next time.

The Medicare Payment Advisory Commission (MedPAC), which advises Congress, says the SGR is “fundamentally flawed” and has called for its repeal. The SGR provides “no incentive for providers to restrain volume,” the agency said.

Q. Why haven’t lawmakers simply eliminated the formula before?

Money was the biggest problem. An earlier bipartisan, bicameral SGR overhaul plan produced jointly by three key congressional committees would cost $175 billion over the next decade, according to the Congressional Budget Office, and lawmakers could not agree on how to pay for the plan.

This time Congress took a different path. The measure both chambers approved is not fully paid for. That is a major departure from the GOP’s mantra that all legislation must be financed. Tired of the yearly SGR battle, veteran members in both chambers appeared willing to repeal the SGR on the basis that it’s a budget gimmick – the cuts are never made – and therefore financing is unnecessary.

But some senators objected. In remarks on the Senate floor, Sen. Jeff Sessions, R-Ala., said any repeal of the SGR “should be done in a way that should be financially sound.”

Most lawmakers felt full financing for the Medicare extenders, the CHIP extension and any increase in physician payments over the current pay schedule was needed. Those items account for about $70 billion of financing in the approximately $210 billion package.

Conservative groups urged Republicans to fully finance any SGR repeal and said they would be watching senators’ actions closely. For example, the group Heritage Action for America promised to “key vote” an amendment that the measure be fully financed. That amendment failed.

Some members of Congress seemed pleased to have this recurring debate behind them. “Stick a fork in it,” said Rep. Upton. “It’s finally done.”

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

MONEY Health Care

Why Young Millennials Are Turning Down Health Coverage at Work

150414_FF_MILLHEALTHCOVERAGE
Getty Images—Getty Images I don't need health insurance, boss. I've got my mom's plan.

Thanks to Obamacare, they can probably get cheaper health insurance from mom and dad.

New college grads want a job, but they can take or leave the health insurance benefits that come with it. Less than half of all eligible employees under age 26 enrolled in an employer-provided health plan in 2015, according to a new report out today from the ADP Research Institute.

But don’t worry about the rest. Under the Affordable Care Act, young adults are allowed to stay on their parents’ health insurance plan until they turn 26. And that’s probably what many are doing, says Chris Ryan, vice president of strategic advisory services at ADP. “There are lot of people who do value health coverage very much, but they want to stay on their parents’ plan as long as possible,” Ryan says.

Why Young Workers Have More Options

The provision that lets young adults keep their parents’ health insurance until age 26 has been one of the most popular parts of Obamacare. It was also one of the first provisions to go into effect. Between September 2010 and December 2011, more than 3 million adults aged 19 to 25 got private health insurance largely thanks to the ACA, according to the Department of Health and Human Services.

A lot has changed since 2011. More millennials have entered the workforce, and a greater number have become eligible for health benefits. Today, 83% of employees under 26 are eligible for health insurance at work, up 8.5% from five years ago. Still, fewer millennials have actually enrolled in their employers’ plans. In 2011, almost 57% of young millennials who were eligible for employer-subsidized health coverage took it; this year, only 44% did.

One sign that many of these young adults are ditching their employer’s plans for their family’s plan: Once employees are too old to stay their parents’ plans, they’re much more likely to sign up for employer coverage. Three-quarters of eligible employees aged 26 to 39 enrolled in an employer health plan, the survey found.

Happily, after widespread concerns that young people would not sign up for health insurance, the vast majority are now covered one way or another. Nationally, 83.2% of Americans aged 18 to 25 now have health insurance, up from 76.5% in the last quarter of 2014, according to a recent Gallup poll. Today, there are 4.5 million more insured young adults who would not otherwise had coverage, according to the White House.

When Mom and Dad’s Plan Has the Edge

For millennials just starting out, however, health insurance premiums can still eat up a large part of their meager incomes. ADP found that employees earning $15,000 to $20,000 spent 9.5% of their annual income on premiums. Employees earning $45,000 to $50,000 devoted 5.8% of their income to premiums, while employees earning more than $120,000 spent just 2.3% of their income on premiums.

So even if young millennials have jobs with health benefits, the family plan is often the better deal. “Most millennials in their early 20s have entry-level salaries, so it’s attractive for our generation to get on a parent’s comprehensive plan for health and financial security,” writes Erin Hemlin, health care campaign director of Young Invincibles, a millennial research and advocacy group.

ADP found that individual premiums cost $486 a month, on average. But add two or more dependents to the plan, and premiums cost an average of $1,377 a month—which, split three or four ways, is less than an individual plan.

“There’s no question—it is usually cheaper for someone to be an additional dependent rather than pay for single coverage,” Ryan says. And then there are the tax benefits. “Because the premiums are on a pre-tax basis and parents are usually in a higher income bracket than their children, the parents are getting a better tax break, and the insurance overall is cheaper,” Ryan says.

Still, there are downsides to staying on a parent’s plan. If you don’t live near your parents, make sure you can find local doctors that are in your parents’ insurance network before you turn down health benefits at work. And consider if you want your bills and explanation of benefit statements mailed to your parents. Not sure what to do? Here’s more on how to decide— or shop for an individual plan on your own if you’re not getting coverage at work.

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About 90% of U.S. Adults Now Have Health Insurance

The uninsured rate has fallen under Obamacare

Amost 90% of American adults now have health insurance, according to a new survey released Monday.

The Gallup-Healthways Well-Being Index shows that the uninsured rate has dropped to 11.9% for the first quarter of 2015. That’s down one percentage point from the previous quarter and down 5.2 percentage points since the end of 2013, when the expansion of coverage under President Obama’s health care reform law went into effect.

“The uninsured rate is the lowest since Gallup and Healthways began tracking it in 2008,” Gallup said. The rate of uninsured Americans rose to more than 17% by 2011, and peaked at 18% just a couple years later. It dropped significantly when the health care law was implemented.

The survey shows that while the uninsured rate has dropped among all groups, the greatest declines came for lower-income Americans and Hispanics.

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