Recently the Department of Health and Human Services (HHS) published a report titled: “America’s Seniors and Health Insurance Reform: Protecting Coverage and Strengthening Medicare.” The report focuses on “rising health care costs, persistent gaps in the use of recommended services, and the threat of Medicare insolvency undermining the health care that the program’s beneficiaries need and deserve.” While HHS wants seniors and Americans to think that the only way of solving these persistent problems is through insurance reform, this report highlights many of the same things the Congressional Budget Office (CBO) and other agencies have said will bankrupt our country.
Although Medicare has provided health care service to our nation’s senior citizens and individuals with disabilities since 1965, “
If these numbers were not bad enough, “premiums, cost-sharing and other out-of-pocket expenses, total an estimated $300,000 of health care costs that the typical older couple may need to pay that are not covered by Medicare alone.
Adding insult to injury, the Medicare Hospital Insurance Trust Fund, which pays for Medicare Part A, is now projected to be exhausted in 8 years, sometime during 2017. If trends continue, by 2035 only 50 percent of estimated Medicare Part A costs would be covered by payroll taxes, and without any changes, there will not be sufficient assets to pay for Medicare benefits to millions. Additionally, Rising Medicare costs, Part B plus Part D premiums, and cost sharing will eat up more than one-third of Social Security benefits in the next 15 years.
Instead of admitting the problems inherent with government run health care, HHS assigned overpayments to private plans as a reason why Medicare costs are rising. For example, they claim that Policy changes in 2003 increased payment levels to private plans in the Medicare Advantage program, which allows beneficiaries to receive services via private plans.
HHS even goes as far to say that Medicare currently overpays private plans by an average of 14 percent, and even as high as 20. What HHS forgot to mention is that these reimbursement rates are already significantly lower than private insurance plans, and a growing number of doctors are refusing to see new Medicare patients because they simply cannot afford it. We need to be paying our doctors more with a growing elderly population. In fact, if Medicare payments are cut by even half…60% of physicians report that they will reduce the number of new Medicare patients they will treat, and 40% will reduce the number of established Medicare patients they treat.
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n addition, more than two-thirds of physicians will forgo investments in their practice; including the purchase of health information technology. This all translates to decreased access to needed services for our nation’s seniors.
While HHS tries to claim that there is no evidence that this extra payment leads to better quality for Medicare beneficiaries, better reimbursement does lead to one thing: doctors being able to provide better individual care and treatments to more patients. Without proper reimbursement rates physicians are left scrambling between 15-minute appointments just to cover overhead expenses, staff and equipment, as well as malpractice insurance.
HHS also believes that because insurers use marketing, and they determine how these overpayments are used, seniors are somehow not benefiting. Contrary to this belief, marketing and disclosure are well regulated, legal, and help patients find the best treatment available. The report also mentions variation in coverage between costs for drugs and hospitalizations however; these are simply different services and much more complex then just blanket coverage. If all forms of health care were covered by a set cost, not only would science suffer, but there would not be enough doctors to provide such services.
The report does site that by eliminating overpayments to Medicare Advantage plans $177 billion over the next 10 years could be saved.
People with pre-existing and chronic diseases, who are uninsured before acquiring Medicare also use more Medicare services than those who had prior health insurance, driving up Medicare costs for everyone with more visits and complex treatments and conditions. Contrary to HHS, CBO notes that prevention will not reduce Medicare costs down the road for younger populations. For, example, although HHS expects that preventing obesity in one 70-year old could save $39,000 in health care costs, this prevention will only lead to greater costs for long-term care, especially with ninety-six percent of Medicare expenditures being spent on patients with multiple chronic conditions.
HHS also believes that by expanding coverage to the uninsured, this cost-shifting will be reduced under health insurance reform, saving $10 billion over 10 years. What HHS forgets to mention is that by adding all the uninsured, there will not be enough doctors, staff or money to treat all these patients, and as a result care will be rationed and people will become sicker due to care deprivation.
There will also be greater disadvantages for Medicare in rural areas, where almost one in four Medicare beneficiaries lives. Although proposed reform may eliminated the physician payment cut threats in these areas, there is still not enough adequate primary care physicians and specialists, especially if we are going to have a public option. In fact today, approximately 12 million seniors lack access to a primary care provider because of shortages in their communities. Even if health insurance reform will invest in primary care and specialists, it will be a long time before those numbers reach today’s populations, which will only increase costs more for untreated patients.
Another problem is that an estimated 65 percent of those who are 65 today will spend some time at home in need of long-term care services – which costs on average almost $18,000 per year. While health insurance reform would create a new voluntary long-term care insurance program, and focus on improving the quality of services provided, there is no guarantee or research on how this will affect spending outcomes.
Quality care is also an issue because nearly 20 percent of Medicare patients who are discharged from the hospital end up being readmitted within 30 days, and of those admitted for a medical condition, half did not have a physician visit between discharge from the hospital and readmission. The Medicare Payment Advisory Commission estimated that Medicare spent $12 billion on potentially preventable hospital readmissions in 2005.
Preventable Waste, Fraud and Abuse
While a common scapegoat for getting money back is fixing waste, fraud and abuse in Medicare reimbursement, over 40 years has proven almost nothing—Medicare still experiences almost $100 million each year in preventable waste fraud and abuse. Although CMS may have prevented over $450 million in improper payments, this is only a fraction. CMS does not have the staff or the resources to detect all of these problems.
High Prescription Drug Prices
Rising drug costs also contribute to the problem, but there is a gap commonly called a “doughnut hole,” that forces many seniors to pay a large portion of their drug costs. While HHS projects that health insurance reform could cut the drug costs that seniors have to bear in the “doughnut hole” by 50 percent, much of these proposals are dependent on industry commitments. Additionally, with over 8 million seniors in the “doughnut hole,” this coverage gap also reduces drug use, on average, by 14 percent – posing a threat to management of diseases like diabetes or high blood pressure. While reform might cause seniors to take more drugs, this will require more tests, and treatments that we do not have enough doctors to perform, and even if we did, the public option would not let the physicians perform unless it was ‘cost-effective.’
In the end, with Congress still out of session for one more week, and the loss of Senator Edward Kennedy, Chairman of the Senate HELP Committee, Americans must begin to ask their politicians how reform will save them money. With most of the reports saying reform will only cost America more, and likely lead to less access to healthcare because of larger numbers, seniors and older Americans should be wondering if Medicare will still be around for them.