Behavior and causes providers to provide Higher Quality care and total cost of care. [inaudible] Health Care Costs are down, but i think Something Else that is going within the Medicare Program that we are seeing, fundamentally different patterns and controlling hospital remissions, why we have this tremendous variation and cost around the country they thank you for the opportunity to speak today. It is great to be here. We return to sheila burke, who is on the faculty at harvard university, a big chunk of her working life was right here in the senate vote as chief of staff to senator bob dole, both majority and minority. And the chief minister and officer in this body. I think it is worth noting with todays discussion that she has a degree in nursing and worked as a nurse in her career. So she has been closely involved in Health Care Issues for very long time. We are very pleased to have you with us. Thank you very much. It would be frightening to put me back in award. [laughter] no fear there. [laughter] thank you very much, ed. Thank you for inviting me to be with you this morning. It is an interesting set of questions. What i would like to do is to go a little bit deeper under the challenges. Jonathan did a terrific job of touching on some of that was. Certainly, Juliette Cubanski davis a terrific structure of the program. Notwithstanding its desire not to talk politics, the reality is that medicare is very much caught up in the discussions of the day. It has been tremendously successful in providing coverage to the elderly in this country and the disabled. Certainly the 50 Million People in 2012 that were covered by the program. It has achieved a great many terrific outcomes, some that were reflected in the job at kaiser has done. The program has been in variation, as jonathan pointed out, in terms of the differences around the country and the utilization of services, and we have word for many years about the quality of the care that was actually being received, and whether it was at the level that we expected it to be. While this is nonetheless a continuing increase, the trust fund has been financed through payroll taxes, that is for part a. It is appropriate, as was pointed out, and part b is funded by general revenues that mashed essentially the amount that is paid in premiums and the increase in the Program Costs are not simply what occurs to the trust fund, but also an impact on the rest of the budget. And it has been pointed out by many that there is a declining resource availability for other expenditures that are as important to us as medicare in terms of the program, things like the fda, nih, a whole variety of programs underfunded and discretionary in nature. Partly as a result of payment changes that jonathan pointed out, they were incorporated in the aca and the general throwdown in the use of services, which we believed was a result of the recession in part, and the fact that people did not frequent the spending, medicare is expected go at 3. 9 annually from 2012 until 2021. As i will show you in a moment, the growth and the enrollment will continue to place great pressure on the program. Again, there are continuing questions with respect quality, as jonathan pointed out. And the question as to whether in fact we are getting the services that we want to get for the most viable in our country on this country. We know that aging will put a burden on the program. This is a terrific slide. This is in your packets. The ama has been doing a series for jama that have been really terrific. They described a very competent of programs and straightforward ways and i encourage you to utilize it in talking with your own constituents. The programs rate of growth is slower than we see on the private side. An Important Note and a result of effort over the last two years in terms of restructuring the program. But in fact, while it is alltime low, population, which is expected to reach 81 million by 2030, is going to continue to put enormous pressure on the program as we go forward. Even if the per capita Spending Continues to her mean low. Heres a terrific depiction of the challenges that we face. We want to make sure that our payments are fair. Access to beneficiaries is secure, some of the payment changes that have been described by jonathan and Juliette Cubanski, it encourages us to think about how we structure this come at a better use of services, how we encourage efficient delivery of services. Again, we want to make sure that however it is that we decide to pay, whether it is for Physician Services, Hospital Services, outpatient drugs or any of the other things that medicare currently pays for, that they are in fact sufficient to encourage those to participate in the program and posturings and premiums have consumed a larger and larger share of the annual Social Security benefits for the elderly received time. But almost 26 on average in 2010. Recent changes have focused on higher hinges many are not all playing golf in palm beach. They are dependent upon Social Security. It is an issue that we have focused on for many years, and that is what is the right and appropriate amount of cost sharing. This issue has come into play, obviously with changes to present his services to encourage utilization. Questions have arisen with respect to the share of the deductible and coinsurance and Physician Services on Hospital Services and others. Again, we would like to make sure that the burden is an appropriate one. It is not excessive, but encourages appropriate use of care. Finally, we worry about the longterm sustainability of the program and its impact on the budget. Which as we think about the deficit issues, one of the particular challenges, of course, is that Health Care Coverage, while important to people of all ages, it is particularly important for the elderly and the disabled, as we see evidence in the utilization. Every year, three quarters of those who are on medicare who depend on the Medicare Program, they have at least one physicians visit and one in five visit a hospital. He was shown some of those numbers in terms of utilization. In 2013, the average per capita Medicare Beneficiary would exceed expenditures of 12,000. Most use Medicare Services infrequently, but the majority of the spending is on a relatively small number of beneficiaries here. One of the challenges that we face and looking at the program is essentially have to focus on that population. Had to essentially look at those who are in the greatest use of services and the most Costly Services and some of the discussion around the dual eligible, there are about 9 million of them and they tend to have a high use of services. One of the questions is, are we doing the best job that we can to coordinate for this population . Are we encouraging appropriate use between the two programs . It is a focus of the element of the aca. How best to target these individuals and how best to address those particular concerns and those particular costs. As is evidenced here, we continue to worry about the trust funds, the aging of baby boomers like me. Not only increases those eligible for the program, it reduces the number of those paying into the program. There is a host of strategy is longterm and shortterm, we have begun to hear them in the budget discussions. Kaiser has put out a terrific compendium of possible proposals the cbo has on this routinely, and others have done it as well. But they tend to fall into these categories. There are relatively high cost sharing and deductibles. No limits on outofpocket costs and large gaps in coverage. Longterm care does comes to mind. It is inflationary, with a basic fee for service where you pay more and do more. All of the initiatives that jonathan suggests, it is really to rethink how to get coordination with care and efficiency of delivery. The program was created in 1965. The date was chosen was 65 years old. Questions have arisen as to whether that is still appropriate with the wind and mortality and essentially people staying in the workforce. The work of cost sharing. Cautionary notes, about whether it disturbs assets or limits access, but the question as to whether we should rethink the way we incentivize behavior on the part of beneficiaries. How we pay the plan, Medicare Advantage plans, further questions Going Forward about how to incentivize quality. And in the basic structure of the program, we have heard the redesigned premium support that some have suggested, restructuring the benefit so it doesnt have the old Blue Cross Blue Shield model of being separate, creating coordinated benefits that are managed across the full continuum of care. The time will come again, as it has come that we will look at medicare in the context of the budget, but hopefully with provisions that make sense coming forward. Thank you very much, sheila. I like to ask a question. I thought i heard you say at one point on the slide describing Medicare Beneficiaries and spending, the average cost was 12,000 . 9000 . It is projected to go to 12,000 on average for beneficiaries. Thank you. We have lots of questions that we can ask, but we want to make sure that we cover the questions that you would like to get asked. As i said, there are microphones that you can use to ask your question vocally, in which case we would ask you to keep it fairly concise. Tricia, would you like to start us off with a question or two . Were i can . Share. This is a question for you. There is a lot of concern during this debate about the Affordable Care act and Medicare Advantage. Whether and whom it would decline a lot. We have seen implement rise a lot. More people gravitating towards the Medicare Advantage plan. I think overall we have seen a much different response. The notion was going without the added services that these plans provide. And the opposite has happened. We are paying less on average to health plans. We are seeing the same degree of access of plans and beneficiaries choosing plans at a faster rate than the traditional feeforservice program. In 2011, cns predicted that we would have predicted growth and we would be spot on with that prediction. We predicted 10 growth in 2013. We are seeing very positive signs so far that that prediction proved true. So i think we are coming into a time that is much different in the past. The past back in the 90s when Congress Dealt with the tremendous destruction for beneficiaries. Its a different time, its a different experience. And we have brought plan payments down dramatically. For the Affordable Care act. But we are seeing no signs of this changing. Posturing and benefit levels it has grown at a much faster rate than the overall growth of the programs. But we are optimistic of the programs future. That is one of the reasons why we felt that it was so important for us to deal deal with fourstar plans are priced our plans. If we want to deliver these reforms, we have to focus not just on the traditional feeforservice program, but the program that is growing the fastest. Thats why its so important to us to have the fivestar bonus system and more plans to achieve Higher Quality levels. More beneficiaries are choosing cheaper services. Thank you so much for holding this panel. It has been really helpful. This question, a couple of questions, actually. For part d, im wondering if plans will be subject to the plan ratio in the next upcoming year. And then the topic, i know that luminary rates will be released shortly, im wondering if you could go into detail about how the aca is rebasing our cuts for the projected year. Finally, if you wouldnt mind talking about when the numbers will be released. These are questions that i i cannot answer yet. We are on track with rates, proposed payment rates, for 2014. That will come out in the next couple days. We will have more to say when it is public. We also have the opportunity to comment, the same is true for durable medical equipment. But what i can say generally is that both in the context of durable medical equipment, we moved to a new pricing structure and we have seen phenomenal results with the program. The same is true with the payment changes that included the Affordable Care act their health care plan. And i think some had predicted a different response. I think both of these programs, the changes to the m. A. Program, the durable equipment, that we can reduce payments without compromising access to quality of care. Providing much greater value to our beneficiaries. I will have more to say when the time is appropriate. Can i just ask you to explain to some of the new people in the room, some of us that may have forgotten the medical loss ratio and what it really is . Sure. In broad terms, it has to do with a portion of the premium paid by beneficiaries and a sizable portion, 85 or more had to be paid you to pay beneficiaries and benefits. The Affordable Care act authorize this new requirement starting in 2014. It will put in place all of that. Okay. This one is for sheila, but it could be for anyone. Could you explain to us why or how medicare will run out of funds by 2024 people continue to pay their medicare payroll taxes that they are supposed to . Would increase prevented from going bankrupt . Well, thats an interesting question. The issue is the decline in the number of people that have contributed. The baby boomers that are retiring, the number of workers to retirees has declined. As a result, the income to the trust fund declines over time as the number of people drawing on the trust fund becomes larger in number. The increase in the payroll tax is one that is often considered in the context of the program. It might well continue to be. There are questions as to the nature of the payroll tax and its impact on the population, whether you target it on largely higher income individuals or whether you spread across the entire payroll base. So again, it is certainly a source of revenue. It will certainly make a difference. Here is one for Juliette Cubanski. What would you say about the cost and benefits of raising the age of eligibility . Anyone else can chime in. Well, you can watch the alliance from december of last year on raising the age of eligibility if you want lots of details. Basically one of the main concerns of raising the eligibility age prior to the passage of a portable care act is that you would create a Large Population of people who would have no access to Health Insurance. Many people, when they turn 65, they rely upon medicare for their Health Insurance coverage because they no longer have coverage to employersponsored coverage. And private insurances are expensive as an option. Passage of the Affordable Care act, this created new channels for Insurance Coverage for nonelderly people and through the statebased exchanges, it is likely that if medicares eligibility age was raised to 67, many people would have access to coverage through these exchanges were marketplaces, as they are now called. Expanded medicaid coverage, a big concern. Another concern is the cost to many people would also be higher than if they were to remain on medicare. It would also be higher costs to employers and states and another is higher cost overall. On the plus side, the medicare c is the money, the federal government says the money. But there is the different costs associated with the subsidies would extend coverage and the medicaid expansion. So its not exactly a winwin situation according to the analysis that the Kaiser Family foundation has conducted. I do endorse her briefing that we did in december. A lot of different materials and a webcast that you can watch. We have several related questions and maybe john can take the first crack at it. It has to do with Medicare Advantage plans. They ask generally how does star Rating System works. That is related to a question that was not asked here, but was passed by the senate office, which ask how come a lot of money went to threestar plans this time around. We could relate that to this question. They are related. Explain how it is scheduled to take effect. I understand that only about 4 may have taken effect now. Do you anticipate that some of the problems that you have referred to and perhaps lesser benefits could show up in this again. I will try my best to answer every question. Before the Affordable Care act, on average, the program paid health plans, about 40 more on average than the cost the same beneficiaries and traditional feeforservice programs. There was no repayment on average of about 14 compared to the cost for the same beneficiaries that provide the services with the traditional program. That socalled overpayment is facedown by the portable care act. Today we are paying close to 7 more on average. Half of that overpayment is close to 100 on average. It is to bring the overall average payments, there is the one to be differences across the country, very close to the average cost for the traditional of feeforservice Program Costs. Prior to that law being passed, 14 overpayment, 7 today on track to facedown to 100 . The law also authorizes bonus payments for those plants that produce higherquality star ratings than the average plans. It has been going on for a long time. Collected roughly 50 to 60 various measures, the gopher t