Health Care Reform: CMS Report House Bill Costs Seniors

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On Thursday the US Senate will begin debate on the Health Care Reform bill that has yet to be released.  In the mean time a report released this past week from the Centers of Medicare and Medicaid (CMS) noted that the House health care reform bill will slash more than $500 billion from future Medicare spending — one of the biggest sources of funding for President Obama's proposed overhaul of the nation's health-care system — would sharply reduce benefits for some senior citizens and could jeopardize access to care for millions of others.

For example, the bill reduces Medicare payments to hospitals and nursing homes over time based on productivity targets. If such hospitals cannot meet the productivity targets, many of the hospitals would withdraw from Medicare.

According to the Washington Post, the report found that “Medicare cuts contained in the health package approved by the House on Nov. 7 are likely to prove so costly to hospitals and nursing homes that they could stop taking Medicare altogether.”

The report specifically indicated that “Congress could intervene to avoid such an outcome, but "so doing would likely result in significantly smaller actual savings" than is currently projected.

Additionally, “the report questions whether the country's network of doctors and hospitals would be able to cope with the effects of a reform package expected to add more than 30 million people to the ranks of the insured, many of them through Medicaid, the public health program for the poor.” For example, with a greater increased demand for services, “providers are likely to charge higher fees or take patients with better-paying private insurance over Medicaid recipients, "exacerbating existing access problems" in that program, according to the report from Richard S. Foster.

If the $500 billion cut stays, then the Medicare program could live another five years without cash infusions until 2022 but, Republicans still argue that the report forecasts an increase in total health-care spending of more than $289 billion.

An analysis of the report done by Politico found that by 2019, health costs would rise to 21.1 percent of GDP compared to 20.8 under current law, according to an actuarial report prepared by the Centers for Medicare and Medicaid Services.

A public plan would cost 4 percent more than private plans because its utilization rules would not be as strict as the private sector (pg. 6).

About 3 million more people would get coverage through their employers. The report figures that about 15 million more people would gain employer coverage but 12 million would lose it because it would be cheaper for their employers to let them buy coverage through the public insurance exchange; 18 million people will remain uninsured and choose to pay the fines for not carrying insurance rather than buy coverage (pg. 7).

By 2014, Medicare Advantage enrollment would drop 64 percent from 13.2 million to 4.7 million because of less generous benefit packages (pg. 9).

The report also notes how preventive measures such as more screenings and preventive care combined with a longer lifespan generally will increase costs.

From the sound of this report, it looks like Americans, especially seniors, will not get to keep the health insurance coverage they have today, at least not all of it.

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