By: Health Insurance
Submitted: 2009-12-30 17:03:11 | Word Count: 1008
Dr. Eric Novack, a Phoenix orthopedic surgeon, on KOGO 600 AM radio show a couple of times to discuss the nightmare that is health care "reform." The last time he was on, he talked about how planned cuts to Medicare Advantage -- the private program that provides Medicare services to 11 million people -- would be devastating for poor Latinos. I asked him to send me his evidence. He did, and it's pretty darn persuasive. See for yourself:
Three Primary Areas of Concern in Senate Health Care Reform Bill
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Regarding the Access and Affordability of Health Care for Minority Groups
1. $118 billion cut (per CBO – 19 November 2009) to subsidies for seniors in Medicare Advantage. (Section 3201, page 869)
a. Medicare Advantage Plans now have around 10 million members nationwide, or about 20% of the Medicare-eligible population
b. Minority groups disproportionately use Medicare Advantage
i. 1 in 3 Hispanic/Latino
ii. 1 in 4 African American
iii. over 80% of Hispanic/Latino Medicare-eligible seniors with incomes of less than $20,000 per year are enrolled in an MA plan
iv. based on 2007 data
c. These cuts will force low income, minority seniors out of the plans they have now and back into the traditional Medicare program, where their cost sharing is higher, and fewer benefits are often available.
d. This is not to imply that MA plans are without problems and that continued efforts to ensure that MA plans are not engaging in inappropriate practices are not needed.
e. However, it is clear that the savings from cutting $118 billion from MA will come primarily out of low income, minority seniors.
2. Individual and Employer mandates will disproportionately negatively impact low income, at risk populations, while subsidies have been directed away from these groups
a. Section 1501 and 1513 of Senate bill address individual and employer responsibilities
b. Massachusetts has had an individual mandate since 2006. An individual mandate means that if you do not have acceptable coverage (a much more narrow definition than the range of health insurance plans available previously), an individual is subject to a financial penalty.
i. June 2008 study, put out by the Blue Cross Blue Shield Massachusetts Foundation and Harvard School of Public Health, found that 50% of those impacted by the mandate (meaning they were uninsured in the 12 months prior to the survey at some point) believe people are worse off than they were prior to the reforms.
c. The employer responsibility component of the bill is fairly complicated, but contains significant disincentives for employers to hire low income workers.
i. The Center on Budget and Policy Priorities, described by Vice President Joe Biden as “invaluable” and “the go-to resource for consistently reliable analysis on matters of budgets and fiscal policy at every level of government”.
ii. The Center’s interpretation of the bill’s employer provisions: “significant disincentives to hire or retain [workers from low- or moderate-income families] remain” in the bill
d. The Senate bill that has been brought to the floor has been modified to increase the benefits for those making $60,000 - $80,000 per year at the expense of coverage and cost savings for those making less than $40,000 per year
i. Limits for out of pocket costs were reduced in $60,000 - $80,000 group from 12% to 9.8% (page 248 of bill)
ii. But cost sharing for lower income Americans was increased as the “actuarial value” (the percent of anticipated total health care spending by the insurer) was reduced by nearly 8% (page 112 of bill)
iii. Low income Americans--- making less than 133% of poverty --- will now find that their access to the choices of ‘health insurance exchange’, including the public option in the bill, available to higher income Americans is nearly eliminated – as they are locked into the Medicaid system. (Section 2001, page 396 of bill)
e. The forced Medicaid expansion will mean $25 billion in mandated extra state spending over 5 years. (CBO 19 November 2009 page 7)
i. Nearly every state budget is currently in crisis
ii. Forced additional spending with very limited flexibility will mean that state budgets—which must be balanced—will respond with cuts to other major areas of state budgets--- namely education and public safety, where cuts generally will disproportionately have a negative impact on low income, minority, at risk communities.
iii. Additionally, as states look for other sources of revenue, increased sales, property, income, and business taxes will make the cost of living go up and the availability of jobs decline.
3. Spending cuts in the future will disproportionately negatively impact communities with large numbers of minorities and low income Americans.
a. As the total number of uninsured drop, Disproportionate Share Hospital payments to hospitals will be dropped by $43 billion over 5 years (CBO 19 November 2009) (Section 2551 page 512 of bill)
b. Efforts in the bill to reduce hospital readmissions and hospital acquired conditions will result in payment penalties to hospitals that fail to meet standards. This is compounded by an additional $42.1 billion in cuts to home health care over the 10 year budget window (CBO 19 November 2009 page 27) Those individuals and groups living in at risk communities are at greatest risk, as their support systems and resources often predispose them to needing to return to the hospital for more care. The cuts in payments and the threat of penalties will have the aggregate impact of health care providers moving away from inner city and low income areas, and relocating to more lucrative areas.
i. The impact will be the perverse incentive of creating, my term, health care deserts, where low income, minority Americans will discover they have to travel farther for less care.
