Is What I Hear True?

I heard that...

...they are going to cut back on Medicare services to control healthcare costs, and I (or my parents) will be denied the care I (they) need. Is that true?

The Patient Protection and Affordable Care Act (PPACA) does not include cuts to traditional Medicare services. People on Medicare Advantage (MA) plans may see changes in these publicly paid, private insurance plans. The law cut costs without cutting basic Medicare services at this time. If Medicare spending is not brought under control, however, the system may face service cuts in future years, but these cuts are not a part of current proposals.

Medicare, like private insurance plans, already limits care. It denies payment for services that it finds are not reasonable or necessary, like elective cosmetic surgery. It also does not cover some things that might be important for Medicare enrollees, like dental care, eyeglasses, and hearing aids. Many private health insurance plans do not cover things like these, either.

All healthcare is limited by insurance plans, physicians, and the ability of people to pay. Insurance plans decide what they will cover, which providers they will pay for these services, and how much they will pay them. Physicians and other healthcare providers decide what care they are willing to provide at what cost. Individuals, except perhaps the wealthiest, face the reality that they might not be able to afford needed healthcare. This is true even if they have health insurance since out-of-pocket expenses like deductibles, coinsurance, and co-pays may be more than they can afford.

PPACA does not reduce care for Medicare enrollees. They do propose to reduce the costs of Medicare in a number of ways. Without reductions in cost, Congress will face increasingly difficult choices in finding ways to finance Medicare and continue to pay for the services people need. PPACA produces savings to Medicare in the following ways:

1. Reducing federal payments to Medicare Advantage plans over time; however it does include bonus payments to plans that recieve a high quality rating. The implication of cutting MA payments to enrollees could be a reduction in the added benefits that MA beneficiaries recieve, but mandated Medicare services have been changed.
2. Establishes a new Independent Payment Advisory Board to recommended ways to reduce Medicare spending id Medicare per capita growth rates exceed certain targets
3. Includes numerous provisions related to provider payments to reduce the growth in the future Medicare payments; increases payments for some primary care providers
4. Includes several payment and health delivery system reforms

For a detailed explanation of the channges to Medicare in PPACA, click here to read an issue breif published by the Kaiser Family Foundation.

AlthoughPPACA does not include cuts in services covered by Medicare, it is possible that some providers may refuse to take Medicare if they feel payments provided under these changes are too low. If there are cuts to MA plans, some private insurance companies may change what they offer in MA plans or stop offering them altogether. For more information on MA plans and how they might be affected by healthcare reform, please see "I heard that healthcare reform will take away the benefits and covered services offered in my Medicare Advantage Plan. Is that true?"

Sources

Kaiser Family Foundation. (2009). Health Care Reform Proposals: Kaiser Family Foundation, http://www.kff.org/healthreform/upload/healthreform_tri_full.pdf.

Kaiser Family Foundation. (2009). Health Care Reform Proposals: Kaiser Family Foundation, http://www.kff.org/healthreform/upload/healthreform_tri_full.pdf.

Kaiser Family Foundation. (2009). Setting Medicare Payment Policy: Is There a Role for an Independent Entity?: Kaiser Family Foundation, http://www.kff.org/healthreform/upload/7961.pdf .

Potetz, L., & Cubanski, J. (2009). A Primer on Medicare Financing (No. 7731). Washington, D.C.: The Kaiser Family Foundation, http://www.kff.org/medicare/upload/7731-02.pdf.

 

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