Tag Archives: CBO

Medicare

CBO: Pilot Programs Aren’t Working

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The evaluations show that most programs have not reduced Medicare spending: In nearly every program involving disease management and care coordination, spending was either unchanged or increased relative to the spending that would have occurred in the absence of the program, when the fees paid to the participating organizations were considered.  Programs in which care managers had substantial direct interaction with physicians and significant in-person interaction with patients were more likely to reduce Medicare spending than other programs, but on average even those programs did not achieve enough savings to offset their fees….

Demonstrations aimed at reducing spending and increasing quality of care face significant challenges in overcoming the incentives inherent in Medicare’s fee-for-service payment system, which rewards providers for delivering more care but does not pay them for coordinating with other providers, and in the nation’s decentralized health care delivery system, which does not facilitate communication or coordination among providers.

Full report here. HT to Chris Jacobs. See Megan McArdle’s comments here.

New Health Care Law

Millions Could Lose Their Employer Health Plan Under ObamaCare

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Basically, anyone earning less than $60,000 (family) is at risk of losing his or her employer health plan.

CBO estimated that only 19 million residents would receive subsidies [in the newly created health insurance exchange], at a cost of about $450 billion over the first 10 years. This analysis suggests that the number could easily be triple that (19 million plus an additional 38 million in 2014) – the gross price tag would be roughly $1.4 trillion.

Full study by Douglas Holtz-Eakin, Former Director of the Congressional Budget Office, here.

Medicare

Gag Order Does Not Apply to the Censors

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During the debate over ObamaCare last fall, the Administration threatened health insurance companies who were informing seniors of potential losses of Medicare Advantage (MA) benefits.  As far as I could tell, the mailings were completely truthful and consistent with the CBO and CMS estimates.  Medicare’s Chief Actuary, for example, predicts that eventually as many as 7.4 million beneficiaries will lose their MA plan altogether and another 7.4 million will experience a loss of benefits.

This week the very same agency that gagged the insurers is sending out a propaganda pamphlet to more than 40 million Medicare beneficiaries – extolling the benefits of the new law, but ignoring all the costs (including the fact that more than half the cost of health reform is to be paid for by reduced Medicare spending).  The pamphlet even claims that MA enrollees will be better off!

Republicans are outraged [gated].  CMS says it only wants to help seniors avoid confusion.  But won’t the biggest confusion come when their MA plans are cancelled?

Medicare

CBO: You Can’t Double-Count Medicare Savings

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Democrats in Congress are claiming that cuts in Medicare spending will both pay for health reform and add to Medicare’s long-term solvency. But a new CBO report says it’s either/or, but not both. [Of course, this also implies that the Medicare and Social Security trust funds are not holding anything of value — Congress has been double-counting there since the inception of those programs.] 

Health Insurance

CBO: Insurance Proposal Would Effectively Nationalize Private Insurance

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A Medical Loss Ratio (MLR) is the percentage of premium dollars an insurer spends on claims as opposed to administrative costs and other expenses. According to news reports, a proposal from Senator Rockefeller and others would limit MLRs to 90%. The Reid bill already requires insurers to issue rebates to enrollees on a pro rata basis if its medical loss ratio falls below 80% or lower for the individual and small-group markets or 85% or lower for the large-group market. 

However, the Congressional Budget Office (CBO) says that a 90% MLR would expand “the federal government’s regulatory role in the health insurance market so much that it would make such insurance an essentially governmental program, so that all transactions related to health insurance policies (even those with private companies) should be recorded as cash flows in the federal budget.”  A similar ruling helped kill Hillary Clinton’s health reform proposal 15 years ago.

Donald Marron, former Acting Director of CBO, explains the issue at his blog.