Medicare Solvency Report Found Too Optimistic

Kaiser Health News /The Fiscal Times (8/6, Andrews) noted that in a new report, Medicare "trustees predicted that the new healthcare law could generate so much better productivity that the Medicare trust fund would stay solvent until 2029 -- 12 years longer than predicted just one year ago," yet the "new estimates offer few clues about where that new efficiency will come from. They are simply based on the fact that the new healthcare law requires that Medicare payments to hospitals and doctors will be adjusted to reflect higher productivity." In fact, HHS Secretary Kathleen Sebelius acknowledged, "The report shows that we have work left to do. ... To achieve the gains projected in this report, we must continue to work hard with our partners across the country to implement the reforms in the Affordable Care Act effectively and on time."
Similarly, CQ HealthBeat (8/7, Reichard, subscription required) reported, "If Thursday's report by the Medicare board of trustees on the program's financial outlook seemed too optimistic, a presentation Friday by Centers for Medicare and Medicaid Services (CMS) Chief Actuary Richard Foster offered what may be a more realistic assessment." Notably, the "trustees said Thursday that about $575 billion over 10 years in Medicare savings generated by the healthcare overhaul would improve its financial outlook and help extend the solvency of the Medicare hospital trust fund from 2017 to 2029." Yet, "Foster told a forum sponsored by the American Enterprise Institute (AEI) that none of the experts with whom he has consulted think that the modest yearly payment increases the law provides for hospitals and other providers are realistic."

Administration Reports Reform Good for Medicare-many have strong Doubts!

Several reports on a news conference about how the healthcare reform law will improve Medicare's long-term finances, including articles from the AP and USA Today, offer a distinctly skeptical view of the Administration's projections. None of the network newscasts mentioned the press conference, which featured Treasury Secretary Timothy Geithner and HHS Secretary Kathleen Sebelius.
USA Today (8/6, Wolf), in an article titled, "Medicare Savings Projections In Dispute," says, "Republican critics and even the program's chief actuary say the new prognosis is too rosy. ... 'If you steal over a half-trillion dollars from Medicare to fund another unsustainable entitlement, Medicare won't be better off,' said Sen. Orrin Hatch (R-UT)." Richard Foster, chief actuary for CMS, said, "The financial projections shown in this report for Medicare do not represent a reasonable expectation for actual program operations. ... The recession adds a significant further element of uncertainty to the trust fund projections."
The AP (8/6, Ohlemacher, Alonso-Zaldivar) titles its article, "Medicare Fund Will Last Extra 12 Years – Maybe," and says the "annual report...gives backers of the new healthcare law evidence of a positive impact on government entitlement programs, but it also undercuts the findings with a host of caveats." The AP says that Foster's statement "amounted to a dissenting opinion."
The Wall Street Journal (8/6, McKinnon, subscription required), in an article titled, "Bullish Medicare Projection Doubted," quotes Sen. Judd Gregg (R-NH) as saying, "Instead of focusing on the future dates when the trust funds become insolvent-thus deluding itself that the problem is years away -- the Democratic Congress needs to understand that from a cash flow standpoint, the crisis is upon our doorstep."
The New York Times (8/6, Calmes) is not as skeptical of the Administration's findings as other outlets. The Times reports, "Medicare's hospital insurance trust fund should remain solvent until 2029," and "the long-term, 75-year shortfall for the hospital fund also is reduced, as are the projected costs of the separate Medicare Supplementary Insurance program. But both parts of the Medicare system will require additional reforms to be financially sustainable, the trustees say." Bloomberg News (8/6, Armstrong) and Reuters (8/6, Felsenthal, Somerville) also cover the story.

Opponents of Reform Turning to The Courts

White House Likens Lawsuits To Challenges To Civil Rights, Voting Rights Acts. The Hill's Michael O'Brien (8/3), in a blog entry, notes that Stephanie Cutter, "an assistant to President Obama who was brought on board at the White House in part to help sell the signature domestic initiative, dismissed" the ruling. Writing on the White House's official blog, Cutter said, "Having failed in the legislative arena, opponents of reform are now turning to the courts in an attempt to overturn the work of the democratically elected branches of government. This is nothing new. ... We saw this with the Social Security Act, the Civil Rights Act, and the Voting Rights Act -- constitutional challenges were brought to all three of these monumental pieces of legislation, and all of those challenges failed. So too will the challenge to health reform."
In an editorial, the Wall Street Journal (8/3, subscription required) argues that the healthcare law is unconstitutional, and derides Cutter's statement as an attempt to intimidate opponents.

Why do Healthcare cost continue to rise?

Did you know: Technology is a key driver of health spending?
No doubt, modern medicine is amazing and helps save lives. As better tests and more expensive equipment and pharmaceuticals emerge and become proven treatment options for many, we can expect to see an increase in the use of these services. As a key driver in health spending, technological advances are accounting for an estimated one-half to two-thirds of spending growth, according to Sarah Goodell and Paul Ginsburg in their publication High and Rising Health Care Costs: Demystifying U.S. Health Care Spending.

Medicare Scams Busted!

Ninety-Four Arrested Over Medicare Scams Totaling $251 Million.
ABC World News (7/16, story 6, 2:05, Muir) reported on "hundreds of raids carried out this country" on Friday "in what's being called the biggest Medicare fraud bust in history. Doctors and nurses billing the American taxpayer for procedures that never happened, and clinics that don't even exist."
The CBS Evening News (7/16, story 3, 2:00, Couric) noted that "one way the government plans to pay for healthcare reform is by cracking down on Medicare fraud. ... Dozens of people have been arrested including doctors, patients, and clinic owners accused of scamming Medicare out of hundreds of millions of dollars."
The AP (7/17, Kennedy, Hays) reported, "Authorities said busts carried out this week in Miami, New York City, Detroit, Houston, and Baton Rouge, La., were the largest Medicare fraud takedown in history." The move also was "part of a massive overhaul in the way federal officials are preventing and prosecuting the crimes."
The Washington Post (7/18, Markon) noted, "The arrests came as Attorney General Eric H. Holder, Jr. and Health and Human Services Secretary Kathleen Sebelius held the first in a series of regional 'summits' on healthcare fraud prevention in Miami. The high-level attention marked the latest step in crackdown on fraud that the Obama administration has said is a key part of its agenda on healthcare reform."
The Miami Herald (7/17, Hiaasen) pointed out, "Experts say Medicare fraud in South Florida costs US taxpayers between $3 billion and $4 billion annually. It's predictable that Miami-Dade, Broward and Palm Beach counties would be the hotbed, and also the venue for one of every three federal healthcare fraud prosecutions."
CNN.com (7/16) reported, "The defendants are charged with conspiring to submit over $280 million in false claims to the federal healthcare program designed to aid the elderly." Sebelius said, "Today's arrests send a strong message that attempts to defraud Medicare will not be tolerated." According to the report, "charges include filing fraudulent claims for HIV/infusion services, home healthcare, physical therapy and durable medical equipment."
The New York Daily News (7/17, Marzulli) reported, "The feds busted a Medicare mill in Brooklyn where the elderly gathered in a 'kickback room' to collect payoffs under a Cold War-era poster warning them to keep their mouths shut." Brooklyn US Attorney Loretta Lynch said yesterday "that 15 people were arrested -- including an 82-year-old woman. Seven others are being sought in the $78 million scheme." The Wall Street Journal (7/17, Benoit, subscription required) and CQ HealthBeat (7/17, Adams, subscription required) also covered the story.

Senior Rebate Checks for Medication

The Modesto Bee -Jun. 28: Seniors who regularly take expensive medications are starting to receive $250 checks from the federal government in one of the first tangible benefits of national health care reform.The Medicare prescription drug rebate checks are part of the health care law signed by President Barack Obama in March. The package of benefits, consumer protections and insurance reforms promises major changes to health care in the next 10 years.
Seniors in Stanislaus County have received some of the 80,000 Medicare prescription drug rebates mailed thus far. There is no need for seniors to apply for the rebates. The patient's drug plan notifies Medicare when his or her drug costs exceed $2,830 for the year and the check goes out, said Frank Dotson, director of the county's Health Insurance Counseling and Advocacy Program."They don't need to do anything," Dotson said. "And they don't need to report the rebate if they feel it will affect their eligibility for any other benefits they have."Look out for scam artistsSeniors should beware of scam artists purporting to help them apply for or spend the rebate checks, he added. More than 380,000 Californians struggle with the coverage gap in Medicare prescription plans. It starts when their drug costs reach $2,830 and then they are expected to pay full price for drugs until out-of-pocket expenses total $4,550 for the year.Dotson said many Medicare recipients with limited incomes are not taking advantage of a prescription-drug subsidy program that predated health care reform.The benefit eliminates annual deductibles and the coverage gap, and sharply reduces co-payments for seniors with income of $1,354 a month and less than $12,510 in assets. For couples, the eligibility ceiling is income of $1,821 a month and $25,010 in assets.

Rate Increases are Studied Before Approval

The Los Angeles Times (7/1, Helfand) reports, "Embattled health insurer Anthem Blue Cross is reviving its plan to raise rates for tens of thousands of California policyholders, some of whom could see their premiums rise as much as 20%." The state's "largest for-profit insurer submitted new rates Wednesday amid pressure to scale back increases of as much as 39% that had provoked fury from consumers, lawmakers and even President Obama." Meanwhile, "California Insurance Commissioner Steve Poizner has hired an actuary to study rate filings submitted by Anthem, Aetna, Inc. and Blue Shield of California. Poizner announced Wednesday that he was making the filings public on the insurance department's website," and "a fourth insurer, Health Net, Inc., also will undergo additional scrutiny once it files new rates."
The San Francisco Chronicle (7/1, Colliver) notes that the proposed rates "would raise health premiums by an average of 14 percent, and as much as 20 percent, for thousands of California consumers."