On Wednesday August 24, 2011 I was invited to make a presentation to the Peninsula Seniors Organization at the Hess Park Auditorium in Palos Verdes, CA. The subject was “How the Patient Protection and Affordable Care Act (ObamaCare) Will Affect Seniors on Medicare”. There is a lot of interest. It was standing room only and crowd spilled out into the hallway.
Preparation for that talk involved a lot of study in the weeks prior. I knew the law was gravely flawed. I had served on the Los Angeles County Medical Association’s Sub Committee charged with reviewing all the “reform” bills before they became law. Since then many regulations have been written and a clearer picture has emerged of how the law will affect current and future Medicare enrollees. Speaker Pelosi, now out of a job, said we had to pass the law to know what was in it. Now we know.
The Patient Protection and Affordable Care Act (ObamaCare) is not about helping seniors. It is about providing new health insurance for 50 million uninsured younger Americans and preventive medicine coverage for 100 million currently uncovered younger people. Funding comes partly from new taxes, but mostly by stripping over a half a trillion dollars from Medicare members. Five hundred and twenty-three billion dollars was taken away from Medicare to help fund the rest. That’s over $11,000 per current Medicare enrollee over the next ten years.
Some benefits were added to Medicare such as paying a small amount for annual checkups, eliminating deductibles and co pays on a few things like colonoscopies and mammograms and closing the donut hole in Medicare Part D in 2019. That’s about it for benefits. There were ten dollars in cuts for every dollar in new Medicare benefits.
The law creates no new doctors or nurses. In fact it cuts funding for some training programs. But it does add a hundred million people looking to collect on their mandated new prepaid annual checkups and preventive care benefits. Unlike Medicare patients, most of these people are well. This is a huge supply problem. No one knows where the doctors and nurses to deliver on this demand will come from.
Thus the pressure on the system will be overwhelming. The Congressional Budget Office and others have estimated that if all these people actually get their mandated free checkups, primary care doctors will be spending 7.5 hours a day doing only that with little time remaining to care for the ill. Look for longer lines, less time with your doctor and more trips to the emergency room for delayed care as has happened in Massachusetts under a similar plan adopted five years ago in that state.
Even worse, the only way the law allows the new federal Independent Payment Advisory Board to cut Medicare is to cut fees to doctors and hospitals, not specific allowed services. Congress could act to cut services, but must cut at least as much money in such service cuts as the IPAB is mandated to cut in fees if it decides to do so. Otherwise IPAB acts automatically. It will be much easier for Congress to let the IPAB do the dirty work and cut fees so it can wash its hands of the whole thing.
Within a few years the fees paid for Medicare patients are projected to be below those paid by Medi-Cal, the California version of Medicaid insurance for the indigent. Those rates are so low that 80% of private doctors cannot afford to accept Medi-Cal. And current law prohibits Medicare Patients from paying extra for any Medicare covered service no mater how willing they might be to do so. It does not so prohibit younger patients from so doing however.
Thus, Medicare patients will be beneath the indigent in the pecking order of who gets seen preferentially if the office overhead is to be paid. When doctors are paid more to quickly see a 30 year old with a sore throat or do a well check-up than to see a 75 year old with twenty-five complex medical problems who needs help to get on an exam table, Medicare patients may be crowed out.
Furthermore, ObamaCare eliminates tax credits and almost $700 in annual subsidies per retiree to employers who now offer their retirees prescription drug coverage. AT&T alone will lose a billion dollars in such subsidies and credits. The CBO projects that 90% of employers will probably drop their senior prescription insurance service for their retirees. These seniors will then have to go bare or purchase ever more expensive and restrictive Medicare Part D policies.
The funding cuts for Medicare Advantage (MA) are in the order of 200 billion dollars. Fourteen million seniors belong to MA plans which include Kaiser and other HMOs, Medicare fee for service plans and Medicare Medical Savings plans. About 7.5 million such seniors are projected to lose their MA plan and be forced back into traditional Medicare and its draconian funding cuts. Others will see sharp increases in their premiums.
A district federal court in Atlanta has ruled that critical parts of the law are unconstitutional while a Cincinnati district court has ruled the opposite. The case is headed for the Supreme Court probably in 2013. The Republicans who now control the House of Representatives passed a repeal act this year. It failed in the Senate by four votes and Obama threatened a veto of course. Republicans have committed to repeal and replace ObamaCare in 2013 if they get control of the White House and the Senate. If seniors become serious about protecting Medicare and restoring the $523 billion in funding, then candidates who support repeal of the PPACA should be attractive.
Either way, seniors will need advocates to navigate these waters. That is where direct practice and concierge doctors will come in very handy. They charge a membership fee to their practices for Medicare uncovered services. Such membership fees allow them to see far fewer patients and spend a lot of time with member patients helping them solve health care complexities the insurance system may not allow time to solve. Look for these practices to expand rapidly in numbers as they have already been doing.