Friday, April 23, 2010

CMS actuary's report validates criticism of PPACA-increase costs plus risk of decreased care for seniors

Richard S. Foster, chief actuary for Medicare, issued a report that says in part that PPACA will result in :

Cuts to hospitals that will jeopardize access for seniors.
Costs that will increase from 2010 -2019 but after that may be savings later.

See here for the entire NPR coverage of the report which in part says:

in addition to flagging the cuts to hospitals, nursing homes and other providers as potentially unsustainable, it projected that reductions in payments to private Medicare Advantage plans would trigger an exodus from the popular program. Enrollment would plummet by about 50 percent, as the plans reduce extra benefits that they currently offer. Seniors leaving the private plans would still have health insurance under traditional Medicare, but many might face higher out-of-pocket costs.

In another flashing yellow light, the report warned that a new voluntary long-term care insurance program created under the law faces "a very serious risk" of insolvency."

... The report projected that Medicare cuts could drive about 15 percent of hospitals and other institutional providers into the red, "possibly jeopardizing access" to care for seniors.

Not mentioned in this report is another factor that will impact senior's health care-decrease access to primary care physicians (PCPs) as the many newly-insured patients complete for an already short supply of PCPs.

The Chief Actuary for CMS stated that under PPACA the uninsured would decrease from the current 57 million to 23 million by 2019. Of the 34 million newly insured, 18 million will be covered by Medicaid ( eligibility will now be for incomes equal to less than 133 % of the Federal Poverty Level) and 21 million through exchanges, most of whom will receive subsidies, while about 4 million would loose their employer sponsored health plans. Note- that does not quite add up, but the numbers are from the CMS actuary's letter and , I suppose, are close enough for government work.

The 21 million exchange insured patients will be competing with the Medicare patients for what already is a shortage of primary care physicians (PCP). Further, reimbursements are generally about 30% lower for Medicare than private insurance. Follow the money and you will see more and more PCPs opting not to see Medicare patients. Diminished access to care for Medicare patients is a very likely outcome of PPACA and in my opinion will more than offsets the $ 250 made to those Medicare folks who hit the doughnut hole in 2010,future mitigation of the doughnut hole effect and the no co-pay and deductible for Medicare preventive services. Those factors were highlighted in a recent attempt by the ACP to claim that PPACA actually helps seniors. See here for the full comments of Robert Doherty,APC's VP for Governmental Affairs and Public Policy.

Many enrolled in the Medicare Advantage program will loose under PPACA.

The Chief actuary of CMS in his Jan 10, 2010 letter ( see here) estimated that enrollment in the MA program would decrease from the current 13.7 million to 9.2 million by 2015, a decrease of 4.5 million due to changes in the MA program as outlined in section 3201 of PPACA. (Other estimates including the recent report cited by NPR are significanlty higher.)

Medicare Advantage patients losing their plans may revert to regular Medicare, Part B but they will need to buy Medicare supplement policy to approximate the coverage they received in their MA plan. I don't see the AARP-who supported PAACA- complaining about that as they will be available to act as broker for those deals. Many of the current MA advantage patients signed with MA because they felt they could not afford the medicare supplement policies.These folks will have more out of pocket payments now if they still cannot afford the extra insurance.

Social justice to some is achieving the greatest good for the greatest number. ( I realize there are other ways to frame the social justice concept). If you accept a utilitarian approach, then throwing some under the bus to get more to ride inside is probably acceptable. Both AMA and ACP have taken pride in their roles in supporting a bill that they describe as furthering social justice yet millions of seniors will be forced out of Medicare Advantage with the associated financial loss and many more Medicare seniors will have decreased access to primary care physicians raising the question- how just is that.


1 comment:

Sharky&Sharky said...

The Link to NPR does not work.

http://www.npr.org/templates/story/story.php?storyId=126207104&ft=1&f=1027

Did they take it down. If so could you supply another link.

Sharky&Sharky apologize if you have received this message mutiple times.