Sunday, August 08, 2010

A Bit of Good News About Medicare - and "Obamacare"

So, since the passage of our new national health care law, consequences and projections of consequences are coming out a little at a time.  Most have had to do with who would get more coverage and how, and what the costs would be for various groups.

Friday we had a report of a somewhat different consequence, one that many of us will appreciate.  According to the 2010 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds – that is, Medicare –

The financial status of the HI trust fund is substantially improved by the lower expenditures and additional tax revenues instituted by the Affordable Care Act. These changes are estimated to postpone the exhaustion of HI trust fund assets from 2017 under the prior law to 2029 under current law and to 2028 under the alternative scenario.

I’m old enough to have some expectations of signing up for Medicare – not next week or next year, but in the plans.  I’m also young enough to expect to need it for some time, or at least to hope to need it for some time.  That additional 12 years is a happy thought.  No, it’s not enough – I certainly hope it won’t be enough for me! – but it’s more time, and it’s more time to make further necessary improvements.

Well, that’s certainly god news – but, it’s a good news/bad news sort of situation.  The same report says

The SMI trust fund is adequately financed over the next 10 years and beyond because premium and general revenue income for Parts B and D are reset each year to match expected costs. However, further Congressional overrides of scheduled physician fee reductions, together with an existing “hold-harmless” provision restricting premium increases for most beneficiaries, could jeopardize Part B and require unusual measures to avoid asset depletion. In particular, without legislation, Part B premiums payable in 2011 and 2012 by new enrollees, high-income enrollees, and State Medicaid programs (on behalf of low-income enrollees) will probably have to be raised significantly above normal requirements to offset the loss of revenues caused by the hold-harmless provision, raising serious equity issues.

For those of us who didn't know (including me), it seems that Medicare is made up of two trust funds, one of which is about hospital expenses (Medicare Part A) and the other about other medical expenses (Medicare Part B).  While the first (Part A trust fund) is in better shape because of the new law, the second (Part B trust fund) isn’t really helped.  Moreover, while it’s still good for at least a decade, largely because premium fees will go up, two things prevent it improving.  One is acts of Congress that have prevented scheduled reductions of reimbursement to doctors, acts which now seem to have become annual events.  The second is this “hold-harmless” provision.  “Hold-harmless” is a common enough concept in contract law, on which I am not an expert.  However, in this case it’s a provision that has to do with Part B benefits.  If one’s premiums go up in a given year faster than benefits, the result is a net loss in benefits (the patient ends up paying more in premiums, but not getting more in benefits).  Under the Medicare “hold-harmless” provision, benefits can’t be reduced even when premiums rise faster.  So, the increases don’t result in as much new revenue as they might. 

So, there’s some good news, something we haven’t heard for a while about Medicare funding.  There’s also a reminder that we still have work to do.  For example, reducing reimbursement to doctors doesn’t seem all that good an idea.  We’ve had many reports in recent years about doctors who feel they can’t take any new Medicare patients – or perhaps any Medicare patients at all – because reimbursement, already poor, is supposed to go down even further.  And between the doctors lobbying to prevent the reductions, and American seniors lobbying to feel secure about their doctors, the reductions aren’t nearly as politically palatable as the annual votes in Congress to stave them off.  But, the guidelines for the reductions and the scheduled dates are matters of law, and so only changes in the law can actually address the problem.  The same is true of raising the age of eligibility, or adjusting premiums and/or benefits according to income, or other adjustments that would redefine premiums and benefits in ways that would secure Medicare beyond current projections.  We’ve known for a long time that real Medicare reform, reform that would take us beyond annual adjustments and Congressional tweaking, will involve extension revision of the entire framework of Medicare.

Still, I’m glad of this good news, and I’m glad it’s a consequence of the Affordable Care Act.  There are so many claims out there about its shortcomings, that I’m glad when we can identify clear benefits.  The Affordable Care Act is, really, just a start.  There is much more to be done to secure health care for all residents of the United States.  That “much more” also includes the changes we need to secure Medicare.  We’re far from done; but we’re close than we’ve ever been before: we’ve made a start.

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