ObamaCare Cuts Unraveling Already

This is from Julie Appleby of Kaiser Health News:

In a surprising move, the Obama administration will extend special bonus payments meant to reward top-performing Medicare Advantage insurers to those that score only average ratings…. The change means 62 percent of all Medicare Advantage insurers — representing 84 percent of enrollees — will qualify for the quality bonuses, compared with only 14 percent of plans under the health law provisions….The total cost over the three years is $1.3 billion.

“It’s only been eight days since the election,” [Barclays Capital analyst] Joshua Raskin, wrote in his report, “but the rollback of Medicare Advantage cuts got its first step forward.”

This is Brad DeLong:

There are several things not to like about this. First, high quality won’t be achieved by paying for mediocrity. Second, the cuts to MA were part of the funding for expansion of health insurance. That they’re unraveling is both a cost issue and a political one. Opponents of the ACA said that the assumed savings from Medicare is not believable. Congress or CMS always gives it away…. Even if this only gives back a tiny fraction of the savings expected from Medicare, it just looks bad and gives critics of the health reform law ammunition. Third, it’s just another piece of evidence that administrative pricing doesn’t work. Give administrators the authority to fiddle with payments and they’re too heavily influenced by those getting paid. This has been a problem in Medicare for decades….

When will we get serious about this stuff? It really matters and we’re blowing it!

Austin Frakt weighs in here and here.

Comments (6)

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  1. Devon Herrick says:

    Even if CMS backtracks on some of the cuts, there is still the uncertainty that will cause insurers to drop MA plans. For a smooth functioning market, laws needs to be reasonable and consistent enough for long-term planning by firm competing.

  2. Bruce says:

    Why is it that every day I read in the newspaper about some new way in which the Secretary of HHS is empowered to undo something int the new health law.

    We don’t have a new law. We have a new dictator.

  3. Ken says:

    Glad to see that Julie Appleby is on top of this. Most of the health care media is giving the Obama Administration a complete pass, regardless of what they do.

  4. Vicki says:

    I think I agree with Bruce. Nothing seems to be immutable in the health law. There appears to be nothing they can’t change by administrative decision — and almost all these decisions seem to be completely political.

  5. Larry C. says:

    Anything for a few more votes. This is shameless.

  6. Nancy says:

    I think they are trying to desparately save themselves from the harmful effects of a very bad law.