LifePlan Community Brings Certainty to Medicare Changes

As you prepare for the New Year and the changes that go along with it, considering a LifePlan community is one way to prepare for the uncertainty surrounding changes in the Medicare compensation model.

With a new year, we all prepare for change. Some of us have plans to change ourselves for the better. We have New Year’s resolutions to lose weight, exercise more, lead healthier lifestyles, and spend more time with the family and various other pledges to improve ourselves as the calendar changes from 2016 to 2017. These changes, whether they’ll be realized or not, are changes that we choose to implement ourselves. Other changes for the New Year are changes that are thrust upon us by other people or other entities.

One set of changes potentially upon the horizon comes from the Center for Medicare and Medicaid Services (CMS) and these changes are particularly relevant for seniors and retirees. Most people over the age of 65 rely on Medicare to pay for at least part of their healthcare services. Components of that healthcare spectrum that Medicare affects are primary care offices, hospitals, skilled nursing facilities, rehab centers and nursing homes. How CMS proposes paying these different providers has a significant impact on the people receiving the care these outlets provide – most namely senior citizens.

First, we must ask why CMS is proposing these changes to their compensation model. The driving reason behind the changes that are forthcoming from CMS is simply this – our population is aging and growing faster than ever before with the aging of the baby boomer generation. That coupled with greater longevity makes for a larger population. With that larger population, the current compensation model is unsustainable. Simply, there is not enough money in the Medicare system to keep paying healthcare providers in the same manner they have been.

So, what is the goal of CMS and what are they proposing? The goal of the CMS is better care, better health and cheaper costs. To achieve this, they are proposing payments that are linked to value and performance. Essentially, healthcare providers will be rewarded for good performance and penalized for less than stellar performance.

What does this mean to the senior healthcare consumer?

Firstly, this system will encourage services to be provided in lower care settings for a cheaper cost. For example, can we provide healthcare in a skilled nursing facility that had been historically performed in a hospital setting? Can that care that had been delivered in a nursing home now be transitioned into the patient’s home? To achieve this, coordination and transition between hospitals and nursing homes and nursing homes and home health agencies will have to be improved and optimized so that nothing is missed as the patient switches between the different care providers and the doctors they are seeing. Secondly, this change will put the focus on wellness and prevention as well as management of chronic conditions to minimize acute episodes and reduce hospitalization.

In addition, healthcare providers will be called upon to prove the value of their service and quality of care they’ve provided in order to be paid. This means more paperwork and more tracking of services provided and outcomes.

On the surface, this may not sound all that negative to the healthcare consumer. Providers are being asked to be more efficient, to focus on better solutions and to minimize costs, but some of the impacts to senior citizens are hidden just below the surface. Some of the ancillary effects of these changes include:

• The number of providers will decrease as not everyone can keep up with the requirements or meet quality standards
• The number of days of care and coverage for illnesses will be reduced as consumers are forced into lower care settings
• Out of pocket expenses will be higher for the consumer

In short, there is an overall savings to Medicare that is necessary to sustain the program, but it comes at a cost to the consumer. So, what can you do?

One way to bring certainty to an uncertain situation is to consider the benefits of a Life Plan Community (also known as a Continuing Care Retirement Community). What this program provides is continuity of costs across the levels of care. So, you lock in your monthly rate at the Independent Living level when you move to a Life Plan Community and you pay at that level no matter what level of care you require. So, when Medicare says you’ve cost too much or you’ve stayed too long, you fall back on your LifePlan benefits so that you can receive the healthcare you need for as long as you need it. The goal is still to transition you back to your home…you just get to go back when you’re ready, not when Medicare says you’re ready.