MIT professor Jonathan Gruber, architecht of the Massachuseets health insurance law that was the model for Obamacare, told the Daily Caller that seniors who stand to lose their doctors and Medicare Advantage plans must be sacrificed for the greater good.“It is a tiny effect compared to the benefits of this law. There is small fraction of Americans who might need to change doctors or plans because of the law.”Medicare Advantage covers 14.4 million people.Asked if Obama had betrayed seniors with his famous promise to Americans that they could keep their doctor and health plan Gruber insisted that, “He was not really talking about seniors.” But in fact, the president’s promise, in dozens of televised speeches was all-inclusive and unqualified.
In that scenario, the Democratic Party would probably end up pushing, not for the pipe dream of true single payer, but for a further bottom-up/top-down socialization, in which Medicare is offered to 55- to 65-year-olds and Medicaid is eventually expanded even more.
Meanwhile, the task for serious conservative reformers — already not the most politically effective bunch — might actually become harder, because they would have to explain how their plan to build an effective, exchange-based marketplace differed from the Obama White House’s exchange fiasco.
So while Republican politicians may be salivating over a potential Obamacare crisis, the conservative policy thinkers I know are not. They’re hoping, as I’m hoping, that this isn’t as bad as it looks. The chance to say “I told you so” is always nice, but not if the price is a potentially irrecoverable disaster.
The prediction that over a decade 15% of hospitals will become unprofitable as a result of the ACA’s Medicare cuts is consistent with the results of Wu and White, described above. So, we can give CMS full marks on that prediction, at least based on what we know now.
CMS’s other prediction, that Medicare prices will be half the value of commercial market ones by 2040, isn’t looking so good.
In particular, as Medicare experiments with accountable care organizations, bundled payments and other new strategies, the agency will inevitably need to make adjustments. Questions will come up, such as: How should the payments to doctors, hospitals and other providers be changed to reflect what is learned about the quality of care they provide? How much should the penalties or bonuses be? Is it better to have hospitals face all the costs associated with patient (as in an accountable care organization) or only the costs incurred during a specific episode of care (as in bundled payments)?
As even preliminary answers come in, the Independent Payment Advisory Board is supposed to make the adjustments, allowing Medicare to move as smoothly and quickly as possible toward an improved system for rewarding value in health care. Congress could never act so nimbly.
To date, 22 Democrats have joined Republicans in the House and Senate in support of legislation to do away with the IPAB. Yet because of the extraordinary partisanship on Capitol Hill and Republican threats to defund the law through the appropriations process, it is unlikely that any change in the Affordable Care Act will take place soon.
The IPAB will cause frustration to providers and patients alike, and it will fail to control costs. When, and if, the atmosphere on Capitol Hill improves and leadership becomes interested again in addressing real problems instead of posturing, getting rid of the IPAB is something Democrats and Republicans ought to agree on.
The number of doctors who opted out of Medicare last year, while a small proportion of the nation’s health professionals, nearly tripled from three years earlier, according to the Centers for Medicare and Medicaid Services, the government agency that administers the program. Other doctors are limiting the number of Medicare patients they treat even if they don’t formally opt out of the system.
Even fewer doctors say they won’t accept new Medicaid patients, and the number who don’t participate in private insurance contracts, while smaller, is growing—just as millions of Americans are poised to gain access to such coverage under the new health law next year. All told, health experts say the number of doctors going “off-grid” isn’t enough to undermine the Affordable Care Act, but they say some Americans may have difficulty finding doctors who will take their new benefits or face long waits for appointments with those who do.
Today’s seniors are facing higher Medicare costs. Over the next five years, current law, as amended by the Patient Protection and Affordable Care Act, already guarantees higher out-of-pocket costs for seniors. Beyond the current law, President Obama’s latest budget proposal would increase seniors’ costs even more. Many seniors will experience a reduction in their Medicare Advantage benefits or even a loss of their existing plan. Medicare “as we know it” is already a thing of the past—the only way to preserve the Medicare benefit for current and future retirees is through structural reform.
With a mandate to drive down Medicare spending, the Independent Payment Advisory Board has always been among the health law’s most-controversial provisions.
Legislators in both parties have attacked the board’s power to dictate Medicare spending cuts without Congress’ seal of approval. While IPAB is specifically barred from changing Medicare’s benefits or increasing cost-sharing, critics worry that cutting doctors’ payment rates could lead to worse care.
For now, IPAB doomsayers can rest assured: The cost-cutting board has been effectively neutered for 2015, the first year in which it’s spending recommendations could go into effect. It has lost its power to make any of these binding cuts.
Medicare is referring to the newly created Center for Medicare and Medicaid Innovation, which gives the program power to create and expand projects without congressional authorization. This authority could also be used to create projects based on HQP’s lessons. It’s not. Instead, Medicare has created a raft of projects and experiments meant to move the system from fee-for-service toward pay-for-quality — with the hope that if they can get the payment incentives right, then the market will have reason to support programs like HQP.
To Health Quality Partners and its defenders, Medicare’s decision is ludicrous. “We’re spending tens of billions of dollars now on Medicare innovation where Medicare already discovered something amazing and now they’re forgetting what they discovered?” Brenner says. “It’s an amazing government moment.”
Medicare Part D has been in operation for eight years, and the results are extraordinary. In 2003, the Congressional Budget Office projected Part D’s cost for its first decade would be $552 billion. The actual cost will be around $358 billion, 35% less than forecast and 64% less than the $1 trillion cost that the CBO estimated for the competing Democratic plan, in which the federal government would decide who got what drugs when and at what price.
The average premium for drug coverage is $30 a month, half what the actuaries estimated it would be this year. A 2011 study in the Journal of the American Medical Association found that the prescription benefit helped reduce hospital stays and delay the need for nursing care, saving Medicare $12 billion a year. The Congressional Budget Office also reported last November that seniors “had fewer hospitalizations and used fewer medical services as a result” of participating in Part D.