The Medicare Sky Is Falling (Part 2)

Medicare will be shaving annual increases in payments to hospitals, skilled nursing facilities, home health agencies and other institutions by 1 percent a year for 10 years. The legislation explicitly exempts doctors, calling for reductions 'in payment updates for most Medical goods and services other than physicians’ services.' The CBO estimates that this provision will save $196 billion.

 

Secondly, the ACA raises another $750 billion, primarily by collecting new fees from the health care industry (which can afford the fees because it will have so many new customers); cutting overpayments to private insurers that are not delivering value for Medicare dollars; raising Medicare taxes for those at the very top of the income ladder; and reducing subsidies to hospitals that will no longer be absorbing the cost of caring for 32 million uninsured.

 

Additionally, The Affordable Care Act paves the way for Medicare to cut spending further, by proposing deep structural reforms that could, 'transform' U.S. health care 'in both the way that it is delivered and the manner in which it is financed.' The legislation 'takes important steps in this direction by initiating programs of research into innovative payment and service delivery models,' the Trustees explain 'such as accountable care organizations, patient-centered ‘medical homes,’ improvement in care coordination for individuals with multiple chronic health conditions, improvement in coordination of post-acute care, payment bundling, ‘pay for performance,’ and assistance for individuals in making informed health choices.