We are non-commercial, all volunteer and supported by our readers. Please help sustain the Dew by making a donation.
Doing the Math
New Study Shows Why Republicans Are Wrong About Privatizing Medicare
- This article was published by the Center for American Progress.
Republicans routinely claim that shrinking the government’s involvement in health care would eliminate waste, inefficiency and significantly lower health care costs. But during the debate over the Affordable Care Act, these same politicians lambasted Democrats for cutting $500 billion from Medicare and Medicaid, and specifically argued that the government’s overpayments to private health insurance plans participating in Medicare Advantage (MA) were essential for preserving seniors’ access to services — particularly in rural areas. “The fact of the matter is, the bottom line, is that these are 10 million people that are going to lose benefits. And that’s what it boils down to,” Sen. Orrin Hatch (R-UT) warned during the mark-up process in the Senate Finance Committee.
Since President Obama signed reform into law, however, the GOP’s doomsday predictions have gone unrealized, and today a new report from the Government Accountability Office (GAO) shows that some private plans are still abusing the system and reporting higher patient severity than is actually supported by medical records. As a result, the government is paying private insurers substantially more than it spends on traditional fee-for-service Medicare:
GAO found that diagnostic coding differences exist between MA plans and Medicare FFS. Using data on beneficiary characteristics and regression analysis, GAO estimated that before CMS’s adjustment, 2010 MA beneficiary risk scores were at least 4.8 percent, and perhaps as much as 7.1 percent, higher than they likely would have been if the same beneficiaries had been continuously enrolled in FFS. The higher risk scores were equivalent to $3.9 billion to $5.8 billion in payments to MA plans. Both GAO and CMS found that the impact of coding differences increased over time. This trend suggests that the cumulative impact of coding differences in 2011 and 2012 could be larger than in 2010.
In contrast to GAO, CMS estimated that 3.4 percent of 2010 MA beneficiary risk scores were attributable to coding differences between MA plans and Medicare FFS. CMS’s adjustment for this difference avoided $2.7 billion in excess payments to MA plans. CMS’s 2010 estimate differs from GAO’s in that CMS’s methodology did not include more current data, did not incorporate the trend of the impact of coding differences over time, and did not account for beneficiary characteristics other than age and mortality, such as sex, health status, Medicaid enrollment status, beneficiary residential location, and whether the original reason for Medicare entitlement was disability. […]
GAO’s findings underscore the importance of both CMS continuing to adjust risk scores to account for coding differences and ensuring that those adjustments are as complete and accurate as possible.
In other words, Republicans were wrong in trying to preserve the government’s subsidies for private insurers during the health care battle and they’d be foolish to stand in the way of more reforms now. Medicare Advantage can only be a viable option for seniors if it can help control health care spending. Eliminating waste, fraud and abuse from the program is crucial to improving Medicare’s sustainability and bending the cost curve.
Worthy of Comment
Also on the Dew
Thomas Wolfe was wrong: We can go home again! As two Suthunahs living in exile in New Joisey -- one from Georgia, the other from Alabama -- we share a photo essay of our 41-year marriage which today the Supreme Court made legal in every state of the union. Samuel A. Ward was organist and choirmaster of our parish in Newark, NJ, when he wrote "America the Beautiful." "Thy fruited plane" indeed. "Thy liberty in law," Amen. https://youtu.be/TXz-uATMehE Read on →
There have been hundreds of thousands of words written and spoken about the unspeakable tragedy of the nine people gunned down at Emanuel AME Church in Charleston. In time, there will be many more; books will be written and countless analysis will be presented seeking to find some meaning in what happened. In time, the events of the tragedy will become a permanent part of the history of Charleston and our people, indeed the whole state and nation. Though I have lived in Charleston for more than 40 years, Emanuel Church is in my neighborhood and I knew Clem Pinckney for Read on →
Number of people killed by gun violence in South Carolina from 2001 to 2010 alone: 5,991 Percent by which that exceeds all U.S. combat deaths in the Iraq and Afghanistan wars combined: 15 Rank of South Carolina among all states for aggravated assaults with a firearm: 2 For the rate of women murdered by guns: 4 For the rate of law-enforcement officers feloniously killed with guns: 4 For gun homicides overall: 7 Percent by which South Carolina's rate of gun murders exceeds the national average: 39 Of 100 possible points on a curved grading system, number earned by South Carolina in the latest state gun law scorecard Read on →
That my first visit to the Lincoln memorial in 48 years would bring tears was unexpected. Yet on a sunny September Sunday in 2012, at the feet of his massive marble likeness, staring solemnly upon the chiseled words of President Abraham Lincoln’s Gettysburg Address, salty drops dot my face. There is poignancy simply in standing where I scampered a lifetime ago as an unknowing four-year-old. But, my tears this day are for something more immediate – at least for me. This moment, the text of our 16th President’s second inaugural speech, and especially his Gettysburg Address fall this day upon a heart Read on →