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Reforming Delivery
Medicare Actuary Throws Cold Water on ACA Cheerleaders

Health care wonks are very excited this week that Medicare is now expected to go bankrupt four years later than previously predicted. To the rest of us, a slightly later bankruptcy may not seem too encouraging, but those on the left have been quick to attribute Medicare’s somewhat-extended lease on life to structural reforms put in place by the ACA. There’s no consensus among the experts about what the main cause of this shift is. But even if you think it’s the ACA, there’s now a further problem complicating ACA cheerleading. Paul Spitalnic, the chief actuary for the Centers for Medicaid and Medicare Services, has come out claiming that the ACA’s Medicare changes aren’t sustainable.

He’s particularly critical of the cuts in Medicare reimbursement rates built into Obamacare. Providers simply won’t be able to afford those cuts as long as it remains as labor intensive to deliver care as it currently is. More, via the Washington Times:

Absent an unprecedented change in health care delivery systems and payment mechanisms, the prices paid by Medicare for health services will fall increasingly short of the costs of providing these services. By the end of the long-range projection period, Medicare prices for many services would be less than half of their level without consideration of the productivity price reductions. Before such an outcome would occur, lawmakers would likely intervene to prevent the withdrawal of providers from the Medicare market and the severe problems with beneficiary access to care that would result. Overriding the productivity adjustments, as lawmakers have done repeatedly in the case of physician payment rates, would lead to substantially higher costs for Medicare in the long range than those projected in this report.

Spitalnic is right to note that policies like tinkering with reimbursement rates won’t solve the health care crisis unless new technologies (like digital consultations) and approaches (like empowering nurse practitionersrevolutionize service delivery. That revolution will help our health care system the most, and policy makers should work to facilitate it.

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  • Andrew Allison

    The fact that Medicare costs are expected to go down because reimbursements are to be reduced is due to the transfer of Medicare Trust funds to pay for ACA (http://www.ncsl.org/documents/health/Approps&fundTrans.pdf).

  • http://irwin.wfmu.org/ Irwin Chusid

    “… policy makers should work to facilitate it” — How about, Policy makers should STOP trying to interfere with it.

  • InklingBooks

    Someone got it precisely right when he said that Obamacare offers “coverage without care.” You’ve got insurance, but you’ll find it almost impossible to find a doctor and hospital who knows how to handle your illness. With its drastically reduced payments, Obamacare’s impact on Medicare with be similar. Seniors will find that their coverage provides them with no real care.

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