Even with a 21% Medicare Cut, Will 85% of Hospitals Continue to Profit?

Fuzzy Math Is Never Wrong

Medicare cuts could drive about 15 percent of hospitals and other providers into the red


Date: 2010-04-23, 3:37PM EDT
Reply to: see below


 

Associated Press – Fri Apr 23, 5:58 am ET

WASHINGTON – President Barack Obama’s health care overhaul law is getting a mixed verdict in the first comprehensive look by neutral experts:
More Americans will be covered, but costs are also going up.

Economic experts at the Health and Human Services Department concluded in a report issued Thursday that the health care remake will achieve Obama’s aim of expanding health insurance — adding 34 million to the coverage rolls.

But the analysis also found that the law falls short of the president’s twin goal of controlling runaway costs, raising projected spending by about 1 percent over 10 years. That increase could get bigger, since Medicare cuts in the law may be unrealistic and unsustainable, the report warned.

It’s a worrisome assessment for Democrats.

In particular, concerns about Medicare could become a major political liability in the midterm elections. The report projected that Medicare cuts could drive about 15 percent of hospitals and other institutional providers into the red, “possibly jeopardizing access” to care for seniors.

The report from Medicare’s Office of the Actuary carried a disclaimer saying it does not represent the official position of the Obama
administration. White House officials have repeatedly complained that such analyses have been too pessimistic and lowball the law’s potential to achieve savings.

— Medicare cuts, a tax on high-cost insurance and a commission to seek ongoing Medicare savings — could help reduce the rate of cost increases beyond 2020. But it held out little hope for progress in the first decade.

“During 2010-2019, however, these effects would be outweighed by the increased costs associated with the expansions of health insurance coverage,” wrote Richard S. Foster, Medicare’s chief actuary. “Also, the longer-term viability of the Medicare … reductions is doubtful.” Foster’s office is responsible for long-range costs estimates.

Republicans said the findings validate their concerns about Obama’s 10-year, nearly $1 trillion plan to remake the nation’s health care system.

“A trillion dollars gets spent, and it’s no surprise — health care costs are going to go up,” said Rep. Dave Camp, R-Mich., a leading Republican on health care issues. Camp added that he’s concerned the Medicare cuts will “undermine care for seniors”..

Americans would be required to carry health insurance except in cases of financial hardship. Tax credits would help many middle-class households pay their premiums.

Medicaid would pick up more low-income people. Insurers would be required to accept all applicants, regardless of their health. >
(Amnesty will pass this year and that means 18 million illegals will get free health insurance because they will claim to be low-icome)

The report found that the president’s law missed the mark. The overhaul will increase national health care spending by $311 billion from 2010-2019
To put that in perspective, total health care spending during the decade is estimated to surpass $35 trillion.

The report’s most sober assessments concerned Medicare.

In addition to flagging provider cuts as potentially unsustainable, the report projected that reductions in payments to private Medicare Advantage plans would trigger an exodus from the popular alternative. Enrollment would plummet by about 50 percent. Seniors leaving the private plans would still have health insurance under traditional Medicare, but many might face higher out-of-pocket costs.

In another flashing yellow light, the report warned that a new voluntary long-term care insurance program created under the law faces “a very serious risk” of insolvency.

Editor’s Note: If the proposed 21% cut in Medicare reimbursement rates will indeed drive 15% of American hospitals into the red, does that mean that 85% of American hospitals will continue to profit from Medicare reimbursement rates?

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