Obamacare Helps Add Life to Medicare as Shortfall Delayed

healthcare reformMy Comments: I’ve argued vigorously over these past few years in favor of the PPACA, what all of us know as ObamaCare. Without it we would be at the mercy of the drug industry, hospitals and the insurance industry. Of the five primary stakeholders in the health care debate, any two of those three could have the necessary leverage to reverse the rising tide of cost increases we had been living with for decades or they could sustain it.

That the rising tide is still visible is not a surprise. If our elected leaders in Congress had spent the last few years working to improve the PPACA instead of blindly working to repeal it, the cost savings might already be apparent. Sooner or later is will be obvious. Just look at Kentucky as an example.

As for the drug companies, hospitals and insurance companies, in my mind its doubtful their solution would be in our best interest as citizens and patients. Most likely their solution would be one that serves the best interest of those industries. That’s how free enterprise works. So what happened is we, as one of the five stakeholders, stepped up and said it’s time to stop the rising tide and this is how it will be done.

As all of us know, it hasn’t happened smoothly or without adverse consequences. It’s going to take years for the hiccups to stop. It may never be a smooth running idea, if for no other reason than world economics and demographic forces will intervene along the way. But it’s better than the social chaos that would happen if the health care delivery system in this country collapsed of its’ own weight or became “owned” by the above mentioned industries.

This article suggests at least one measure of good news has surfaced in support of the overall goal. Some of our dilemma is driven by the need to introduce legislation where benefits will be seen long after the current leaders are dead and buried. That goes in the face of decision making that wants immediate results to encourage and justify being re-electied to office.

By Bloomberg News Service / July 28, 2014

The main trust fund behind Medicare, the $583 billion U.S. health program for the elderly and disabled, will be exhausted in 2030, four years later than projected last year, the government reported.

An improving economy and the health-care overhaul known as Obamacare may stave off depletion of the fund as it took in more money and spent less than expected last year. The trust fund pays for hospital visits, nursing care and related services for Medicare’s 52 million beneficiaries. Its assets fell $7.1 billion in 2013 to $281 billion, less than one-third the reduction of a year earlier, according to a report released today by the program’s trustees.

Medicare’s finances are a flash-point in health-policy debates between Republicans, who have proposed converting the program into private insurance subsidized by the U.S., and President Barack Obama. Unusually slow growth in the program’s spending, payment cuts under the Patient Protection and Affordable Care Act, known as Obamacare, and debt-reduction legislation have extended the life of the fund, called Part A.

“Medicare is considerably stronger than it was just four years ago,” Sylvia Mathews Burwell, secretary of the Department of Health and Human Services and a trustee for the program, said today at a news conference. “Cost growth is down. The quality of the care our parents and grandparents are receiving is improving.”

Spending Unchanged
Medicare spending per beneficiary, including outpatient services and prescription drugs that are paid for from separate trust funds that can’t be exhausted, was unchanged from 2012 to 2013. Spending per beneficiary under Part A — for hospital care and related services — fell for the second year in a row.

Growth in Medicare Advantage plans, offered by private insurers including Humana Inc. (HUM) and UnitedHealth Group Inc., accelerated. About 1.3 million people joined the plans in 2013, raising enrollment to 14.8 million, or 28 percent of all Medicare beneficiaries. About a third of Medicare beneficiaries are projected to be in the private plans by 2023.

Medicare’s actuaries, who compile the report, said that fewer people than they expected sought hospital care in 2013 and that those patients used less expensive services when they did. It remains unclear whether that is due to economic pressure on patients or to changing practices by doctors and hospitals, who have been encouraged under the Affordable Care Act to better coordinate their care and avoid unnecessary readmissions to the hospital.

Cost Questions
“The jury’s yet out as to whether we can really count on the pace of cost growth being reduced,” Doug Holtz-Eakin, president of the American Action Forum, an advocacy group that has opposed Obamacare, and a former head of the Congressional Budget Office, said in a phone interview. “My concern is this will take pressure off the Congress and the administration to deal with the real problem and we run the risk of a very bad surprise down the road.”

Social Security’s trust funds, used to make disability and retirement payments, will be exhausted in 2033, the same projection as last year, a second report said.

The program’s trustees, who include the secretaries of the Treasury and Labor departments in addition to Burwell, said payment reductions and productivity improvements under the Affordable Care Act can be sustained.

“The trustees are hopeful that U.S. health-care practices are in the process of becoming more efficient as providers anticipate a future in which the rapid cost growth rates of previous decades, in both the public and private sectors, do not return,” they said in the annual report.

Repeal Scenarios
Medicare spending would grow much faster if provisions of the Affordable Care Act that control cost growth were repealed, the trustees said. Under one “illustrative scenario” that included repeals of several provisions of the law, Medicare spending would consume more than 8 percent of gross domestic product by 2080, compared with just more than 6 percent under current law.

Obama has sought to keep the current structure of Medicare largely intact and allow changes wrought by his health-care law to take effect. In April, the Congressional Budget Office said the program would cost $1,000 less per patient than it had projected in 2010, the year the law was passed. Republicans have also lobbied to raise Medicare’s eligibility age to 67, a proposal Obama hasn’t ruled out as part of a larger budget deal that would include tax increases. Republicans have rejected any budget agreement increasing taxes.

“The president is ready to work with Congress on enacting responsible reforms, and he is prepared to make tough choices,” Treasury Secretary Jacob Lew said at the news conference. “The president will not support any proposal that hurts Americans who depend on these programs today and he will not support any proposal that slashes benefits for future retirees.”