Portions of this post originally appeared in HealthBeat Blog as written by Maggie Mahar; Myths & Facts About HealthCare Reform: Who Wins & Who Loses? and Myths & Facts about Health Care Reform Part 2: Doctors Who Take Medicare
Healthcare Reform Myths and Countering Facts
The media has fun chumming the airwaves with misinformation on the passed Healthcare Reform Legislation and what it means for most doctors, hospitals, patients, Medicare and Advantage recipients, and also state budgets. It sells news and attracts readers.
Myth 1: Healthcare Reform is a Give-Away to the Insurance Industry
_ It is true that millions of people will be forced to buy healthcare insurance by 2014which will result in $millions in new premiums. It is also true that many of these new customers are the very same ones cast adrift by these companies because of the expenses of insuring them.
– In 2010, Medicare will slash Medicare Advantage Payments by 5%. In 2011, Medicare Advantage Payments will be frozen. Over 10 years, $132 billion will be cut from Medicare Advantage.
– In 2011, the MLR will be applied to all premiums charged. For Group coverage this amounts to 85% of all premiums must be paid out in medical expenses. For Individual coverage the percentage is 80%.
– In six months (2010), all healthcare plans will have to provide preventative service at no cost.
– In 2010, insurance companies will no longer be able to drop the seriously ill unless they can prove fraud or intentional deceit. Denial of service is appealable to the Comptroller as established in the Manager’s Amendment.
– In 2011, the cap is removed from how much can be paid out over a patient’s life time. In 2014, the yearly cap is removed.
– In 2011, states will have greater power to insist upon justification for premium increases from insurance companies.
_ Myth 2: In 2014 when the mandate for healthcare insurance begins, the healthcare insurance companies will capture millions of “new” customers.
– Yes this is true and as discussed above, however many of these new insurees will be the ones cast off in the past by insurance companies due to ill health and the resulting high expense. These new insurees will bring a greater liability than those presently insured to their higher costs.
– 15 million of the 47 million uninsured today have incomes between $25,000 and $50,000. As established in a 2009 Kaiser Study, 11% of the uninsured in this category are in poor health which will also result in higher payouts.
(Rdan update…slightly edited for clarity)
Myth 3: Reform Legislation will cut 21% in Medicare payments to Doctors
– The much advertised 21% cut in Medicare payments to Doctors has nothing to do with today’s Healthcare Reform legislation. It originated with 1997 legislation which detailed fees surpassing an established “Sustainable Growth Rate,” Medicare payments to all doctors would be cut. Congress keeps negating this automatic cut yearly rather than changing the 1997 legislation.
– Why is the Sustainable Growth Rate still Law? The Bush administration used the SGR to make the budget appear to be leaner and included the hypothetical cuts in his budget. President Obama has not incorporated the cuts in the budget and Congress has yet to change it.
(Myth # updated…Rdan)
Myth 4: Healthcare Reform will cause Doctors not to take more Medicare Patients and drop those they have today.
– This myth is tied to the slashing of Medicare payments by 21%. Under the new health care reform legislation there is a 10% incentive for primary care doctors, a 10% incentive for general surgeons, and a 5% incentive for mental health services.
– There is also differential for geographical differences such as seen in South Dakota as compared to New Jersey.
– In 2013, Medicaid payments for primary care doctors will be raised to match Medicare payments.
A popular message to seniors is the loss of their personal doctors and care as a result of the new healthcare legislation. The reality is they will gain more care as payments to primary care physicians will increase as well as those to general surgeons. The same holds true for the general populace. In 2008, the AMA estimated there was ~$24 billion in charity care, much of which was used for uninsured patients. With reform, it is expected the amount of charity care will decrease. At the same time, doctors such as Oncologist Allen Mondazac are preparing for the deluge of new patients who will be insured in the earlier stages of cancer rather than later stages as seen presently due to being uninsured.
The media, anti-Social Security/Medicare groups, and others have repeatedly used scare tactics associating rising healthcare costs ultimately to an aging baby boomer population leading to the demise of the US as both programs together become more burdensome and in need of offsetting benefit cuts. In no way will an aging baby boomer population negate the several decades of SS Trust Fund today or tomorrow as much as the AEI, Peterson, Heritage, Cato, Concord, etc. wish such to happen and neither will a population of retirees negate productivity gains which offset worker to retiree ratios. As long as Labor receives the benefit of those productivity gains in fair proportion to that allocated to capital in the form of higher wages which Labor hasn’t since the eighties; the ratio is adequate and only minor adjustments to SS Payroll Withholding are needed to balance payouts to revenues for SS to make up for the ~2% overall difference. Medicare will need small increases to its taxes to stabilize its Fund. What the media has not targeted is the reason for rising healthcare costs which directly impacts Medicare.
Asenescent citizenry is playing only a minor role in the ongoing climb in the nation’s health care bill—from $585 billion (the sum we laid out in 1990) to over $14 trillion (the amount we are projected to spend in 2030, assuming we continue in our profligate ways)” Uwe Reinhardt 2008 World Healthcare Conference, http://www.tcf.org/Publications/Healthcare/Maggie%20Agenda.pdf “Getting Better Value from Medicare.” Indeed, of the projected $14 trillion healthcare costs in 2030, $728 billion can be attributed to age and gender. So what are the cause(s) of rising healthcare cost?
The healthcare industry will continue developing new stuff for every age group,’ Reinhardt explains. ‘Will that ‘new stuff’—in the form of new drugs, devices, tests, and procedures—be worth it? Some of it will be and some of it will not.’
The US has the only global healthcare program unregulated and managed for the highest return possible in profits. Innovation of products, medicines, and procedures having a low benefit and return as compared to cost has been the #1 culprit for rising healthcare cost. In a 2006 Health Affairs study, spending on new heart disease technology increased while survival rate remained flat. It appears to be the same for the “me-too” drugs which mimic older technology with little or no increase in results and having a higher cost and subsequent price. New and improved in medicine is not delivering what it being advertised to do. 1 of 3 healthcare dollars is spent on ineffective procedures, unnecessary hospitalizations, and over priced drugs and devices no better than the predecessors with little or no improvements in outcomes
Rather than target Social Security, Medicare, baby boomers, and the elderly as the issues, perhaps it is time to get to the root causes of healthcare costs.