Here is a press release from America’s Health Insurance Plans (AHIP).
Meanwhile, the POTUS weighed in on Health Care Reform. I’ll probably have more to say, but when you read about “Ensuring Fiscal Sustainability“, the first line talks about MA plans costing 14% more than Original Medicare FFS.
I’ve mentioned many times that this number comes from the June 2009 MEDPAC report (see page number 155 of the report, which is Page 166 of the PDF). Problem is, the 14% number is based on estimated 2009 payments. In 2010, payments were cut while FFS presumably increased. In 2011, CMS’ 45 day advance notice seems to indicate another cut, while FFS will likely increase by another 4-6%. Thus, IN THE ABSENCE OF ANY LEGISLATION, MA rates in 2011 will already be much lower than 14% over FFS. Likely in the 6-8% range, if nothing passes.
Thus, we’re taking money that we are already saving by doing nothing and saying that by doing something we are saving it a second time so that we can spend that money on something entirely different.
It’s kind of like saying, “Last year, I took a $2,000 vacation (on my credit card). This year, I only took a $1,000 vacation (on my credit card). So, since I didn’t take a $2,000 vacation this year, I’m going to spend that $2,000 to buy a Home Entertainment system (on my credit card).”
A similar form of accounting was the subject of an MPR radio discussion this AM….relating to Employer paid health insurance…..it is free to the employee (as a non taxable benefit) and considered as a tax deduction to the employer. The “guest” on the show was infavor of taxing the benefit to the employee (since he/she is not paying for it) and eliminating the tax deduction to the employer……this is the reason why health insurance is so expensive.
I think its all a big shell game!!!!!
Good point, but isn’t this the nature of all health care reform?
What is your take on the impact of more cuts go MA on the 11,000,000 enrolled in one of the options?
RD Quinn
http://www.quinnscommentary.com
RD:
Segmenting out the Medicare Advantage business, there are currently about 1.6 million on PFFS plans. In 2010, about 800,000 were dropped. I see another 800,000 dropped in 2011 (or switching to another plan). In 2010, MA overall was able to absorb the PFFS losses and actually posted a small gain (Feb 2010 versus Dec 2009). I don’t see that happening again in 2011 with these cuts. I’m guessing that MA will be trimmed by about 1,000,000 overall from Dec 2010 to Feb 2011. The funding cuts to MA will hit premiums pretty hard, but HMO plans are more efficient that Medicare and should hold their ground.