Five Myths About Medicare

Robert Laszewski

Posted 2/26/12 on Health Policy and Marketplace Review

I recommend you read John Rother’s recent op-ed in the Washington Post, “Five Myths About Medicare.”

John argues that each of these statements is a myth:

  1. Medicare is inefficient and fails to control costs–the CBO has projected that per capita spending will grow only 1% more than inflation over the next decade.
  2. The well-off don’t pay enough for their Medicare benefits–working age premiums as well as Part B premiums already vary considerably by income.
  3. Medicare benefits are overly generous–in 2007 Medicare paid an average of only half of the $18,000 the average beneficiary spent.
  4. Cutting Medicare is the only way to save it–changing incentives to providers offers more promise.
  5. Medicare needs fundamental restructuring–“Even the most well-run and efficient program cannot nearly double its enrollment without a matching increase in money.”

And this conclusion:

“Containing health-care cost growth is critical for Medicare’s survival, but it’s impossible to do that for Medicare alone. Payment restraints and incentives that improve value must be applied to the entire health-care system to be effective.”

Read “Five Myths About Medicare in the Washington Post.”

ICD-10 To Be Delayed Indefinitely – Never Mind!

Robert Laszewski

Posted 2/14/12 on Health Policy and Marketplace Review

After years of telling us they are serious this time and everyone in the health care system had better be ready on time to implement the new disease coding system, CMS said today the whole project is going to be delayed indefinitely.

The new ICD-10 system requires payers and providers to convert from the old system of 13,000 codes to the new system of 68,000 codes.

Continue reading “ICD-10 To Be Delayed Indefinitely – Never Mind!”

Medicare Advantage Premiums Drop an Average of 7% and Enrollment Is Up 10%—That Must Make Republicans Just Want to Cry

Robert Laszewski

Posted 2/6/12 on Health Policy and Marketplace Review

Medicare Advantage would appear to be a fantastic success—senior premiums are dropping and enrollment is increasing.

Listening to Health and Human Services Secretary Sebelius last week, you would think private Medicare plans were a Democratic idea and this is their success. Many industry observers, including me, have worried that Medicare Advantage benefits would shrink and premiums would rise because the new health care law reduced federal payments to the plans by $136 billion over the next decade.

Continue reading “Medicare Advantage Premiums Drop an Average of 7% and Enrollment Is Up 10%—That Must Make Republicans Just Want to Cry”

The Wyden-Ryan Plan Will Be the Foundation for Serious Medicare Reform—and Maybe More

Robert Laszewski

Posted 2/1/12 on Health Policy and Marketplace Review

In two companion articles in January’s New England Journal of Medicine, Henry Aaron with Austin Frakt, and Joe Antos critique the Wyden-Ryan Medicare reform proposal.

Senator Ron Wyden (D-OR) and Representative Paul Ryan (R-WI) are proposing a hybrid Medicare reform proposal combing both Republican defined contribution free market principles—a premium support scheme—with Democratic defined benefit principles—a baseline guaranteed plan and premium support.

Continue reading “The Wyden-Ryan Plan Will Be the Foundation for Serious Medicare Reform—and Maybe More”

The New Law Needs To Be Repealed, Expanded, and Replaced—So Long As It Doesn’t Have a Mandate

Robert Laszewski

Posted 1/30/12 on Health Policy and Marketplace Review

Last week’s State of the Union speech was notable because the President hardly mentioned the new health care reform law.

Avoiding what is supposed to be the centerpiece domestic accomplishment of President Obama’s first term stuck out like a sore thumb.

He said almost nothing because the Obama team simply doesn’t know what to say.

The fact is the Affordable Care Act (ACA) is generally unpopular, and its best-known provision, the individual mandate, is wildly unpopular.

Continue reading “The New Law Needs To Be Repealed, Expanded, and Replaced—So Long As It Doesn’t Have a Mandate”

Important Research From Medicare Demonstration Projects: Almost Nothing Works

Robert Laszewski

Posted 1/23/12 on Health Policy and Marketplace Review

I will suggest that most of us believe the way to control health care costs, and at the same time maintain or improve quality, is to both use the managed care tools we have developed over the years, and perhaps more importantly, change the payment incentives so that both cost control and quality are upper most in the minds of providers and payers.

The Congressional Budget Office (CBO) has just released an important review of Medicare’s results in testing those ideas. The news is not good.

From the CBO’s blog post:

In the past two decades, Medicare’s administrators have conducted demonstrations to test two broad approaches to enhancing the quality of health care and improving the efficiency of health care delivery in Medicare’s fee-for-service program. Disease management and care coordination demonstrations have sought to improve the quality of care of beneficiaries with chronic illnesses and those whose health care is expected to be particularly costly. Value-based payment demonstrations have given health care providers financial incentives to improve the quality and efficiency of care rather than payments based strictly on the volume and intensity of services delivered.

In an issue brief released today, CBO reviewed the outcomes of 10 major demonstrations—6 in the first category and 4 in the second—that have been evaluated by independent researchers. CBO finds that most programs tested in those demonstrations have not reduced federal spending on Medicare.

Continue reading “Important Research From Medicare Demonstration Projects: Almost Nothing Works”

Will the Feds Be Ready With the Fallback Insurance Exchanges by October 2013?

Robert Laszewski

Posted 1/18/12 on Health Policy and Marketplace Review

Insurance exchanges have to be up and running in all of the states by October 2013 in order to be able to cover people by January 1, 2014.

If the states don’t do it, the feds have to be ready with a fallback exchange. States have to tell HHS if they intend to be ready by January 1, 2013.
Continue reading “Will the Feds Be Ready With the Fallback Insurance Exchanges by October 2013?”

I Hope Trustmark Tells HHS to Go Pound Sand

Robert Laszewski

Posted 1/12/12 on Health Policy and Marketplace Review

Today, the Department of Health and Human Services announced that, “Trustmark Life Insurance Company has proposed unreasonable health insurance premium increases in five states—Alabama, Arizona, Pennsylvania, Virginia, and Wyoming. The excessive rate hikes would affect nearly 10,000 residents across these five states.”

The HHS statement continued, “In these five states, Trustmark has raised rates by 13 percent. For small businesses in Alabama and Arizona, when combined with other rate hikes made over the last 12 months, rates have increased by 27.2 percent and 18.1 percent, respectively. These increases were reviewed by independent experts to determine whether they are reasonable. In this case, HHS determined that the rate increases were unreasonable because the insurer would be spending a low percent of premium dollars on actual medical care and quality improvements, and because the justifications were based on unreasonable assumptions.”

I hope Trustmark tells HHS to go pound sand.

Continue reading “I Hope Trustmark Tells HHS to Go Pound Sand”

2012: A Year of Huge Uncertainty in Health Care Policy

Robert Laszewski

Posted 1/10/12 on Health Policy and Marketplace Review

2013 may be the most significant year in health care policy ever.

But we have to get through 2012 first.

Once the 2012 election results are in there will be the very real opportunity to address a long list of health care issues.

If Republicans win, the top of the list will include “repealing and replacing” the Affordable Care Act. If Obama is reelected, but Republicans capture both houses of Congress, we can still expect a serious effort to change the law. Then there is the granddaddy of all problems, the federal debt. The 2012 elections could well prepare the way for entitlement reform—particularly for Medicare and Medicaid. Even if Obama is reelected, the 2013 agenda will include a serious debate about Republican ideas to change Medicare into a premium support system and block grant Medicaid to the states.

Paul Ryan and Ron Wyden Blow the Medicare Reform Debate Wide Open!

Robert Laszewski

Posted 12/15/11 on Health Policy and Marketplace Review

House Budget Chair Paul Ryan (R-WI) and Senator Ron Wyden (D-OR) have embraced a Medicare reform plan that in concept borrows heavily from one championed by former New Mexico Senator Pete Domenici and former Clinton budget chief Alice Rivlin.

Specifically, Wyden and Ryan are proposing to alter the earlier Ryan Medicare plan by:

1. Continuing to offer the traditional Medicare plan—Ryan would have eliminated it—in addition to a range of private Medicare plans offered by health insurers.

2. Tying federal Medicare premium support to an amount equal to the second lowest cost Medicare plan—public or private—available to seniors in each market. Ryan would have set a flat premium support amount in year-one and increased that only at the rate of inflation.

3. Instituting a series of consumer protections and medical underwriting rules designed to protect seniors.

4. Instituting an annual cap on what the federal government could pay for Medicare at an amount equal to the increase in the nation’s GDP + 1%—Ryan would have capped annual increases in the federal premium support amount at the increase in the consumer price index.

The Wyden-Ryan would begin in 2022.

Continue reading “Paul Ryan and Ron Wyden Blow the Medicare Reform Debate Wide Open!”

The Super Committee Failure – What’s Next?

Robert Laszewski

Posted 11/21/11 on Health Policy and Marketplace Review

The stock market today was shocked, simply shocked, that the Super Committee didn’t come up with a debt deal.

I don’t know why. Republicans can’t vote for more taxes unless they’re willing to get “primaried” from the right and risk losing their seat. Ditto for Democrats who would face the same punishment from their base if they voted to change the sacred defined benefit entitlements without at least getting tax concessions from the Republicans.

Obviously, neither side has a lot of statesmen in their ranks who would actually be willing to compromise.

Continue reading “The Super Committee Failure – What’s Next?”

Romney Jumps on the Waiver Bandwagon–And Creates Even More Uncertainty Over the New Health Care Law

Robert Laszewski

Posted 10/26/11 on Health Policy and Marketplace Review

Republican presidential frontrunner Mitt Romney has pledged to end “Obamacare.” Upon taking office, he would immediately begin the process by granting the states waivers from having to implement it:

“I’ll grant a waiver on Day One to get repeal started. On Day One, granting a waiver for all 50 states doesn’t stop it in its tracks entirely. That’s why I also say we have to repeal Obamacare, and I will do that on Day Two, with a reconciliation bill [requiring only 51 votes in the Senate] because as you know, it was passed by reconciliation with 51 votes.”

Romney appears to be on thin ground in making his waiver promise and his promise to use reconciliation to stop “Obamacare” could lead to chaos in the market and among consumers.
Continue reading “Romney Jumps on the Waiver Bandwagon–And Creates Even More Uncertainty Over the New Health Care Law”

The Ryan Health Care Proposals—Not Your Congressman’s Health Plan

Robert Laszewski

First posted 9/28/11 on Health Policy and Marketplace Review

In a speech at the Hoover Institution today, Representative Paul Ryan (R-WI) argued again that his proposal to reform Medicare, and now his tax credit proposal for replacing the Democratic health care law for those under-age 65, would guarantee to citizens “options like the ones members of Congress enjoy.”

His proposals would not give people the guarantees members of Congress, and all other federal employees for that matter, now enjoy.

This is not a small point.

Previously on this blog, I have argued that many of the defined contribution reform proposals, Ryan’s included, should be faulted for putting all of the future risk of health care costs on beneficiaries.

Continue reading “The Ryan Health Care Proposals—Not Your Congressman’s Health Plan”

The Health Leadership Council Medicare Proposal: Too Much Responsibility on Beneficiaries and Not Enough on Providers

Robert Laszewski

First posted 9/27/11 on Health Policy and Marketplace Review

The Health Leadership Council (HLC), a coalition of CEOs from many of the leading health care companies, has created a list of Medicare reform recommendations for the Super Committee tasked with finding at least $1.2 trillion in budget savings.

As we begin the national debate over what to do about Medicare’s unsustainable costs, I will suggest that the HLC proposal gives us one, of what will have to be many, outlines for discussion.
Continue reading “The Health Leadership Council Medicare Proposal: Too Much Responsibility on Beneficiaries and Not Enough on Providers”

The Debt Super Committee: Will We Get A Deal?

Robert Laszewski

First posted 9/20/11 on Health Policy and Marketplace Review

It’s back to work in Washington, DC and all the attention is now on the Super Committee and their goal of cutting spending by at least $1.2 trillion over ten years.

If the committee fails to come up with a plan that passes the Congress, there would be $1.2 trillion in automatic cuts. The health care special interests have reason to hope they will fail—the fallback cuts would only impact Medicare providers in a small way—2% in provider cuts—and not directly impact beneficiaries or Medicaid generally. Any Super Committee deal would likely be more far reaching if for no other reason than to protect the defense budget from the huge cuts the fallback would require.

Continue reading “The Debt Super Committee: Will We Get A Deal?”