Fix Health Care Policy

How to Fix the Medicare Physician Payment Problem

Photo credit: Newscom

The congressional formula that determines the annual Medicare payment update for physicians, the sustainable growth rate (SGR), was supposed to cut Medicare doctors’ pay each year starting in 2002. But that congressional formula is so flawed and unworkable that every year since 2003, Congress has stepped in to stop it from going into effect. In 2013, without another congressional “doc fix,” the physicians would have had a pay cut of 26.5 percent.

The formula is called the sustainable growth rate because it links Medicare physician pay increases to the performance of the general economy, not to the market-based conditions of supply and demand that would determine the price of medical services. So if Medicare physcians’ pay in any given year rises faster than economic growth, then their pay is automatically reduced the following year.

There’s an added dimension to this problem: Every year the pay cut is delayed, the size of the cut the following year is bigger.

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Tags: doc fix, flawed, Medicare, pay increase, performance, premium support, SGR, Sustainable Growth Rate, unworkable

No, Obamacare Does Not Lower Health Care Spending

Obamacare supporters tend to give credit to the law where credit is not due. In the latest attempt, Senate Budget Committee Chairman Patty Murray (D–WA) tried to link lower projections for Medicare and Medicaid spending to the Affordable Care Act.

During today’s hearing on the recent Congressional Budget Office (CBO) report, Chairman Murray said:

As I was reading through the report, one section really got my attention …which was the discussion of the change in health spending in recent years. In fact, I stopped and underlined one statistic because I found it so surprising. The statistic is that CBO has lowered its estimate of federal spending for Medicare and Medicaid to such a degree that spending for 2020—one year is now $200 billion lower than CBO thought back in 2010, an improvement of 15 percent.

And let’s be clear, that improvement has occurred since enactment of the Affordable Care Act.

It is unfortunate that Chairman Murray didn’t keep reading because the very next paragraph of the report states:

Spending projections also have been affected by legislative action—most notably as a result of the Affordable Care Act…. From 2010 to the present, those other types of revisions boosted the estimates of outlays for Medicare and Medicaid in 2020 by $72 billion, or about 5 percent. (The Affordable Care Act also created new subsidies for some people to purchase health insurance through exchanges, adding $115 billion to the estimate for federal outlays for health care programs in 2020, according to CBO’s current projections.)

So spending is estimated to decrease for Medicare and Medicaid in 2020 by $200 billion but Obamacare spends an extra $187 billion more than would have been spent in the absence of the law. Thus, whatever “savings” were projected have been gobbled up by Obamacare and its massive new spending.

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Tags: CBO Report, fake savings, lower spending, ObamaCare

Hospices Reveal Obamacare’s Impact

Two hospice care centers are struggling to make ends meet, and Obamacare’s cuts to Medicare are to blame.

Hospices—health care facilities for the terminally ill—along with other Medicare providers are facing Medicare pay cuts. Of the $716 billion in payment reductions, hospice care was hit by a $17 billion payment cut from 2013 to 2022.

Now, contrary to all of the misleading claims, this effect is already beginning.

San Diego Hospice recently laid off 260 workers, closed a 24-bed hospital, and has recently filed for Chapter 11 bankruptcy. San Diego Hospice’s financial condition is attributed mainly to reduced Medicare reimbursement, fewer patients, and a federal audit that hurt the center’s reputation.

Another provider, Delaware Hospice, had to lay off 52 workers, citing lower federal reimbursement as the cause. “The decision,” said CEO Susan Lloyd, “is a direct result of a consequential decline in census and the need to position the organization to meet additional changes and challenges that the hospice industry anticipates with health care reform.”

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Tags: care, federal reimbursement, hospice care, low pay, Medicare cuts, ObamaCare, providers

Obama’s Bogus State of the Union Promises

Tonight, the American people will be watching President Obama’s fifth State of the Union address. How has he done on his promises over the past four years?

Take a look at some of the promises Obama made back in 2009 during his first State of the Union.

“I pledged to cut the deficit in half by the end of my first term in office.”

During his first State of the Union, newly inaugurated President Obama vowed to cut the deficit in half by the end of his first term. Instead, Obama has averaged deficits nearly three times that of his predecessor.

For those who were concerned with President George W. Bush’s $4 trillion national debt, this pledge may have seemed like the “hope and change” the American people voted for in 2008. However, the reality of America’s additional debt over the past four years under the Obama Administration is staggering—almost $6 trillion in four years, on track to triple the amount Bush accumulated over his eight years as President. Now that Obama is heading into his second term, we’ve seen quite a change from the Barack Obama who thought $4 trillion in debt was “irresponsible” and “unpatriotic.”

“Over the next two years, this [stimulus] plan will save or create 3.5 million jobs.”

The President promised great things from the stimulus plan, but as Heritage’s J.D. Foster has said, we have to look at his record. He may have promised 3.5 million new jobs, but he’s 7.7 million jobs in the hole instead.

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Tags: deficits, entitlements, Obamacare spending, State of the Union address, stimulus plan

Obamacare Hassle: A 127-Million-Hour Paperwork Burden

Photo: Tetra Images/Newscom

Three House committees have added up the total hours of burden that Obamacare’s regulations will cost Americans: over 127 million hours per year of paperwork.

Federal law requires agencies to estimate the paperwork burden created by rules and regulations, so the estimates for hours of burden come from the Obama Administration itself.

The committees’ new Obamacare Burden Tracker currently includes 157 different rules and regulations that make up the 127 million hours of paperwork.

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Tags: burden, cost, ObamaCare, Obamacare Burden Tracker, paperwork, regulations

5 Bipartisan Health Care Reform Options

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Addressing our nation’s overspending problem cannot be done without reforming entitlements, especially Medicare and Medicaid. As Washington remains clearly divided over how to get it done, Senator Orrin Hatch (R–UT) has outlined 5 health care reforms that are bipartisan.

These reforms have had the support of both parties in the past and are capable of effectively reining in spending:

1. Raise Medicare’s eligibility age. Hatch proposes raising the Medicare eligibility age gradually from 65 to 67, which would coincide with Social Security. This proposal enjoys a wide range of support from both sides of the aisle and would garner significant savings for the Medicare program. Heritage’s reform proposal would raise the eligibility age to 68, which would yield an estimated savings of $243.6 billion over 10 years.
2. Reform Medigap to incentivize better behavior. Limiting Medicare supplemental plans that cover initial out-of-pocket costs would decrease the excessive utilization currently occurring. This would incentivize better behavior from seniors and lower Medicare’s costs over time.

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Tags: bipartisan reforms, eligibility age, entitlements, incentivize, Medicaid, Medicare, Medigap

Five Health Care Takeaways from CBO’s Report

The Congressional Budget Office (CBO) released its Budget and Economic Outlook for 2013–2023 today. Here are five major takeaways:

1)      Health care entitlement spending is bypassing all other spending. Spending on Medicare, Medicaid, Obamacare subsidies, and the Children’s Health Insurance Program will be greater than all other spending—including Social Security and defense spending: “Spending for major health care programs will be nearly 5 percent of GDP [gross domestic product] in 2013, and such spending is projected to grow rapidly when provisions of [Obamacare] are fully implemented by middecade, reaching 6.2 percent of GDP in 2023.”

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Tags: Congressional Budget Office, entitlement spending, Medicaid, Medicare, ObamaCare, report, subsidies

Unions Insult Taxpayers with Obamacare Subsidy Request

Labor union leaders, who are big supporters of President Obama and were big proponents of his health care reform law, want taxpayer dollars to help pay for the increase in their health care costs due to Obamacare.

There are many provisions in Obamacare that will raise the cost of insurance in both the individual and employer markets. To name just a few of these provisions: no pre-existing condition exclusions, no cost-sharing on certain preventative benefits, children can stay on their parents’ plan until they’re 26, and no cap on medical benefits.

It should surprise no one that adding benefits and restricting cost-sharing adds considerable costs to health plans.

However, it appears the unions were too busy supporting Obamacare to do the math. Unions are now asking for a reprieve from the higher costs in the form of taxpayer subsidies for their lower income workers with employer-sponsored insurance. However, the subsidies are only intended to go to those purchasing coverage in the new exchanges, not to anyone with employer-sponsored insurance.

To be clear, they want taxpayer subsidies to offset the cost of their insurance while non-union workers in the same predicament would not receive help.

This request should insult every American taxpayer. These unions are using their political clout to ask for special treatment under the law at the expense of taxpayers.

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Tags: benefits, Cadillac tax, cost-sharing, health plans, labor unions, ObamaCare, subsidies

Five Health Care Takeaways from CBO’s Report

The Congressional Budget Office (CBO) released its Budget and Economic Outlook for 2013–2023 today. Here are five major takeaways:

1)      Health care entitlement spending is bypassing all other spending. Spending on Medicare, Medicaid, Obamacare subsidies, and the Children’s Health Insurance Program will be greater than all other spending—including Social Security and defense spending: “Spending for major health care programs will be nearly 5 percent of GDP [gross domestic product] in 2013, and such spending is projected to grow rapidly when provisions of [Obamacare] are fully implemented by middecade, reaching 6.2 percent of GDP in 2023.”

2)      Obamacare still costs well over a trillion dollars. Obamacare is still projected to have a gross cost of over $1.6 trillion from 2013 to 2022—which only includes nine years of full implementation because the major provisions, exchange subsidies, and Medicaid expansion don’t begin until 2014. This spending should be stopped before it starts.

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Tags: bad policies, CBO, health entitlement spending, report, trillion dollars, uninsured

Obamacare “Rebranded”

Text from http://www.cuidadodesalud.gov/glossary.html

The Department of Health and Human Services (HHS), charged with implementing Obamacare, is running into a classic marketing problem: The dogs won’t eat the dog food.

So HHS officials recently announced that they are “rebranding” one of Obamacare’s major components; henceforth they will replace the word exchange with marketplace.

HHS has been implementing Obamacare for over 36 months now. The law is just as unpopular as the day it passed. Employers are trying to figure out if they will need to drop their employee health plans or cut their workers’ hours. Insurers still don’t have the answers they need to design and price the new required coverage. At least half the states are unwilling to set up their own exchanges.

What does HHS conclude? That its product needs a different name. Apparently the Administration thinks the dogs will like the dog food better with a different label on the can.

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Tags: bad policy, exchanges, marketplaces, ObamaCare, rebranded, Spanish, States