In last night’s U.S. Senate debate in New Hampshire between incumbent Jeanne Shaheen D. and challenger Scott Brown R., Shaheen uttered a flat-out, bald-faced lie: that Obamacare doesn’t cut Medicare spending to pay for its expansion of coverage to the uninsured. It’s a talking point that a number of Democratic Senate candidates—and their enablers in the lefty blogosphere—have been clinging to. And it’s embarrassingly dishonest.
The Medicare Trustees issued their annual report on the program’s long-term financing outlook last month, and their findings were greeted by the Obama administration as evidence that the Affordable Care Act is working. This is nonsense.
The general slowdown in health spending remains largely a phenomenon of economic conditions related to the deep recession of 2007-2009 and factors outside the realm of the ACA. Among other things, it is noteworthy that health spending growth rates have moderated across the developed world in recent years, as measured by the OECD. Even Obamacare’s most enthusiastic apologists might be sheepish about claiming the law somehow caused a global health transformation.
A close examination of the ACA’s provisions, especially those related to Medicare, also produces nothing that would lead one to expect large-scale spending moderation. The main provisions of the ACA provide substantial new subsidies for health insurance, through Medicaid and the federal and state exchanges. The Congressional Budget Office CBO estimates that these provisions will cost about $1.8 trillion over the period 2015 to 2024. The main effect of this massive increase in subsidization of insurance will be to increase demand for services and thus put upward pressure on prices and costs. This is simple economics. It may take some time for these pressures to emerge, but they will eventually emerge.
Medicare spending growth will be slow again in 2014 relative to historical standards, and some of the usual suspects are now crediting the Affordable Care Act — Obamacare — for the good news. For instance, a recent post at Vox suggests that the slowdown in Medicare spending can be attributed, in part, to the ACA’s provision penalizing hospitals for excessive readmissions of previously treated patients.
At the time of the ACA’s enactment in March 2010, the Congressional Budget Office estimated that the readmission provision would reduce Medicare spending by $0.3 billion in 2014, and only $7.1 billion over a decade. That’s about one tenth of 1 percent of total Medicare spending over that time period. There has been no information from any source since 2010 suggesting that the savings from the readmission provision has escalated into a major cost-cutting reform. In the context of overall Medicare spending, the readmissions provision is simply inconsequential.
Section 1332 of Title I of the Affordable Care Act offers to state governments the ability to waive significant portions of the ACA, including requirements related to qualified health plans, health benefit exchanges, cost sharing, and refundable tax credits. It permits state governments to obtain funding that otherwise would have gone to residents and businesses through the ACA and to use those funds to establish, beginning in 2017, an alternative health reform framework within statutory limitations. Section 1332 also permits states to apply in a coordinated fashion for waivers from Medicare, Medicaid, the Children’s Health Insurance Program, and “any other federal law relating to the provision of health care items or services.” This article reviews the statutory provisions and related regulations of this new and unprecedented state waiver authority, as well as the legislative history of section 1332. Finally, it reviews the limited activities thus far by states contemplating use of this provision and considers ways this authority may be considered for use by states in the future. Section 1332 has the potential to instigate a new, varied, and unprecedented array of state health sector innovations from both sides of the political divide over health care reform.
Q: Is it true that, under the Affordable Care Act, “Medicare will not pay anything” for patients receiving only “observation” care in hospitals?
A: No. Medicare will pay a significant portion of observation care costs after copayments and deductibles are met. Nothing has changed as a result of the ACA.
Committee Continues Its Fight to #KeepThePromise to Seniors With Medicare Advantage Plans | Energy & Commerce CommitteeMay 12, 2014
Continuing their efforts to protect seniors, House Energy and Commerce Committee leaders today sent a letter to Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner expressing concerns about the health care law’s negative effects on Medicare Advantage. The committee also released an analysis of Medicare enrollment data conducted by the nonpartisan Congressional Research Service which found that Medicare Advantage enrollees are disproportionately minority or lower income seniors. Read the complete memo prepared for the committee online here.
Medicare patients don’t really know that CMS uses private bounty hunters paid on contingency to audit and deny hospital claims. Hospitals provide care, then either lose an audit or have to fight through a lengthy appeals process for reimbursement. The perceived risk changes hospital behavior, which can mean that a patient gets blindsided with big out of pocket expenses. Both the RAC system overall and the RAC appeal process are effectively broken. Bart Caponi MD, FACP, FHM
The bills can be substantial because they often include follow up nursing home care and prescription drugs that were administered during the hospital stay ‒ but not covered by Medicare for patients under “observation” status. There is an appeals process, but like most things involving Medicare, it’s long ‒ and primarily designed for the recovery of funds already paid by patients.