Fix Health Care Policy

Side Effects: Unlawful Use of $8.3 Billion in Taxpayer Dollars?

Last week, the Government Accountability Office (GAO) sent a letter to Secretary of Health and Human Services (HHS) Kathleen Sebelius raising questions over her legal authority to spend $8.3 billion on a quality bonus payment demonstration for Medicare Advantage (MA) plans.

The demo was the most expensive project ever undertaken by the Centers for Medicare and Medicaid Services (CMS), and GAO concluded that it will be unsuccessful at improving quality and reducing costs.

Thus far, CMS has offered no response to the challenge of its legal authority. Section 402 of the Social Security Amendment of 1967 allows the Secretary to “modify methods of payment under Medicare to establish additional incentives to increase the economy and efficiency of services provided under the program by carrying out experiments and demonstration projects.”

Read the rest on The Foundry…

Tags: bonus demo, CMS, Government Accountability Office, HHS Secretary Kathleen Sebelius, Medicare Advantage, unsuccessful

Side Effects: The $8.35 Billion Attempt to Fool Seniors

A new report by the Government Accountability Office (GAO) shows that a demonstration program created by the Obama Administration in Medicare Advantage (MA) is primarily designed to “demonstrate” how to hide politically unpopular parts of Obamacare.

The Quality Bonus Payment demonstration program will take place from 2012 to 2014 and differs substantially from the bonus program described in Obamacare. In the original statute, high-performing plans (those rated 4 and above on a five-star scale) would receive bonus payments as an incentive to improve quality. In the current demonstration program, bonus payments are awarded to plans rated 3 and above, essentially rating almost all plans “above average” and giving them bonus payments. The additional funding offsets Obamacare’s $145 billion in cuts to the popular MA program.

As Heritage has warned before, Obamacare’s cuts to MA would severely reduce the quality of the program and force enrollees back into traditional Medicare. Writing for Heritage, health care experts Jim Capretta and Robert Book explain, “Phased in between 2012 and 2017, the MA cuts will substantially restrict the ability of Medicare beneficiaries to choose the health plans that best meet their needs and will result in substantial reductions in coverage for many millions of seniors and disabled Americans.” Medicare’s Office of the Actuary predicts a 50 percent drop in enrollment by 2017.

(Read the rest on The Foundry…)

Tags: GAO, Medicare Advantage, ObamaCare, quality bonus payment demonstration program, unpopular law

Side Effects: Medicare Advantage Gains Won’t Last

Health and Human Services Department (HHS) Secretary Kathleen Sebelius

Last week, the Centers for Medicare and Medicaid Services (CMS) announced that average premiums in Medicare Advantage (MA) for 2012 have fallen by 7 percent, and enrollment has increased by about 10 percent. This is great news for the program, which allows seniors to receive Medicare benefits through a private plan of their choice. But in a serious twist of logic, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius credited Obamacare with MA’s success: “Now this is just one of the ways the Affordable Care Act is making stronger and more sustainable Medicare for years to come.”

(Read the rest on The Foundry…)

Tags: CMS, Medicare Advantage, Obamacare cuts, premium support, savings

Medicare Advantage Is Living Up to Its Name

The Congressional Budget Office (CBO) recently released a report that reviewed 10 Medicare demonstrations designed with the intention of reducing spending and improving quality of care. Unfortunately, the demonstrations did not produce the desired results.

The CBO report concluded, “The results of the demonstrations illustrate the challenges of developing, implementing, and evaluating policies that reduce Medicare expenditures while improving or maintaining quality of care.” However, Heritage policy analyst Kathryn Nix has analyzed research that shows that the answer to the challenge is right under everyone’s nose: the private market.

Nix explains that private health plans participating in Medicare Advantage (MA) are making strides in what Congress has tried—and failed—to achieve in traditional Medicare fee-for-service (FFS) for decades. Competition among private plans has maintained patient satisfaction, lowered costs, and increased the quality of care. Success is obvious and abundant in the MA program.  (Read the rest on The Foundry…)

Tags: competition, Congressional Budget Office, fee-for-service, lowered costs, Medicare Advantage, private market

Another Hearing Highlights Obamacare’s Problems

Secretary of Health and Human Services (HHS) Kathleen Sebelius testified last week at the House Ways and Means Committee on the fiscal year 2012 budget—although the question period centered on Obamacare. Sebelius opined that the new health care law will increase patient access to physicians and hospitals, provide more choices for Medicare beneficiaries, create jobs, and allow those who are happy with their current plans to keep them. However, reality paints a different picture.

First, Obamacare will not increase access to health care for many seniors. For example, as a result of the $200 billion cut to the Medicare Advantage (MA) program, insurance companies are caught in a bind as to whether or not they should cut benefits and offer less appealing plans or leave the program altogether. (Read the rest at The Foundry…)

Tags: HHS Secretary Kathleen Sebelius, House Ways and Means Committee, Medicare Advantage, ObamaCare, patient access, physician payments

Guest Blogger: Obamacare and the Law of Unintended Consequences

The virtue of prudence dictates that one should heed the law of unintended consequences and seek to minimize the unwelcome outcomes that result from almost every endeavor. When one fails to do so, the damaging unintended consequences can be overwhelmingly; oftentimes to such a degree that any rational supporter of the endeavor must seriously consider whether it is worth the pains.

This is the story of Obamacare, literally “the law” of unintended consequences. And tragically, we’re only in year one of its implementation.

Most prominently, President Obama repeatedly promised that “if you like your plan, you can keep it.” However, tens of thousands of Americans have already been forced to change plans, the majority being seniors holding Medicare Advantage plans that Obamacare subjected to dramatic cuts. Starting in 2014, hundreds of thousands more will fall victim given that it is cheaper for businesses to drop employees onto the government-run exchange than continue providing them coverage. (Read the rest at The Foundry…)

Tags: Medicare Advantage, President Barack Obama, repeal Obamacare, unintended consequences

The Verdict Is In: Medicare Advantage Will Suffer Under Obamacare

The outlook for seniors’ Medicare Advantage (MA) plans is grim under the new health care law. Though seniors’ premiums will drop 1 percent in the new year, this will be the exception to the rule over the next decade.

Medicare Advantage is a popular alternative to traditional fee-for-service, allowing seniors to choose their health plan from among participating private plans. If seniors choose a plan that is less expensive than the benchmark price, they receive a rebate that can be used to add extra benefits, such as dental or vision care, or to reduce co-payments or premiums.

The new law, however, will lower the benchmark price set for MA plans. In a recent letter, the Centers for Medicare and Medicaid Services’ (CMS) Chief Actuary Richard Foster explains that changes made by the new law “are expected to reduce MA rebates to plans and thereby result in less generous benefit packages.” For seniors who wish to keep their current plans, out-of-pocket costs will increase. Foster writes, “Prior to this legislation, the average annual MA rebate was estimated to grow from $1,093 in 2010 to $1,580 in 2019. Under the new provisions, the average MA rebate is expected to decline from its current level to $43 in 2019.” (more…)

Tags: CMS, MA rebate, Medicare Advantage, Obamacare cuts

Side Effects: Massachusetts Seniors Will Lose Medicare Advantage Plans in 2011

President Barack Obama’s promise that “if you like it you can keep it” may be this generation’s “read my lips—no new taxes,” claim. New Centers for Medicare and Medicaid Administrator Dr. Donald Berwick recently said “Medicare Advantage remains strong and a robust option for millions of seniors who choose to enroll or stay in a participating plan today and in the future.” But seniors enrolled in Medicare Advantage plans offered through one Massachusetts insurer are about to find out otherwise.

Harvard Pilgrim, the state’s second largest insurance company, plans to cancel its Medicare Advantage plan by 2011, forcing 22,000 seniors, who may very well like their current coverage just fine, to find another option. For many, this could mean enrolling in traditional Medicare and Harvard Pilgrim’s Medicare Supplemental plan, which offers similar benefits but at a higher expense. (more…)

Tags: CMS Director Donald Berwick, Harvard Pilgrim, Medicare Advantage, Obamacare false promises, Side Effects

Obamacare at Six Months

Yesterday marks six months since the passage of Obamacare. Here’s a quick review of what’s happened since then and what we have learned about the law:

1. Almost immediately after passage of the law, a number of major corporations had to take large write-downs against expectations of higher health care costs in the future. AT&T took a charge of $1 billion. Higher costs for companies mean fewer jobs.

2. The law will not lower national health care expenditures. The latest estimates by the government’s own actuaries now say annual per capita spending will actually rise by $265 when the law’s provisions are fully in effect. But those estimates assume draconian cuts in doctor reimbursement will take place; elsewhere, Medicare’s actuaries say those cuts can never happen without jeopardizing access to care—which is to say Congress will never let them happen. (more…)

Tags: higher health care costs, Individual Mandate, Medicare Advantage, Medicare cuts, ObamaCare