The Mystery About Obama’s Medicare Cuts

Four days after the proposed 2015 payments were unveiled, no one really knows how much of a cut insurers are facing.

An auxiliary nurse assists a patient in a geriatric unit at the hospital in Angers, western France, on October 23, 2013. The Angers hospital employs 6,000 people including 980 doctors.
National Journal
Clara Ritger
Feb. 25, 2014, 10:32 a.m.

The Obama ad­min­is­tra­tion un­veiled its latest round of pro­posed cuts to the Medi­care Ad­vant­age pro­gram Fri­day, but days later even the in­sur­ance in­dustry isn’t sure how big a blow the ad­min­is­tra­tion dealt.

The pay­ment reg­u­la­tion it­self, and an ac­com­pa­ny­ing press re­lease, didn’t make it easy to fig­ure out ex­actly what the Medi­care agency was pro­pos­ing — aside from the fact that it was def­in­itely a cut, of some mag­nitude. An email sent Monday by the trade group Amer­ica’s Health In­sur­ance Plans, says Wall Street ana­lysts are es­tim­at­ing cuts of any­where between 4 per­cent and 9 per­cent to the pro­gram.

Without its own es­tim­ates of the im­pact, AHIP’s spokes­man Robert Zirkel­bach re­peated the line in­surers have been push­ing for weeks: Any cut is too big.

“The goal here is to keep pay­ments flat, giv­en that the pro­gram just saw a 6 per­cent cut last year,” Zirkel­bach said.

Roughly 30 per­cent of Medi­care be­ne­fi­ciar­ies are en­rolled in private in­sur­ance through the Medi­care Ad­vant­age pro­gram, and ac­cord­ing to con­sult­ing firm Avalere Health, the pro­gram’s num­bers con­tin­ue to swell des­pite the meas­ured im­ple­ment­a­tion of new cuts. Health plans face some $150 bil­lion in Medi­care Ad­vant­age re­duc­tions over the next 10 years due to the Af­ford­able Care Act, as law­makers seek to rein in over­spend­ing in the pro­gram.

At the top of the spec­trum, Bank of Amer­ica/Mer­rill Lynch ana­lysts pegged the total in­dustry im­pact to be about -9.3 per­cent, while Wells Fargo’s gurus es­tim­ate a much lower -3.79 per­cent im­pact.

The Cen­ters for Medi­care and Medi­caid Ser­vices, however, con­tin­ues to push -1.9 per­cent. That num­ber, an agency spokes­man wrote in an email, is the es­tim­ated pro­posed 2015 pay­ment re­duc­tion rate, based on the com­bined growth rates in tra­di­tion­al Medi­care and Medi­care Ad­vant­age.

The growth rate by it­self does not ac­count for cuts im­posed by the Af­ford­able Care Act, the new health in­sur­ance tax, the end of a qual­ity bo­nus pro­gram which in­surers qual­i­fied for through this year, and oth­er changes such as no re­im­burse­ments for home health and re­duc­tions for cod­ing.

Wall Street ana­lysts did factor those ad­di­tion­al pro­pos­als in­to their es­tim­ates. CMS did not provide the com­bined im­pact of its pro­posed policies on the in­dustry, when asked.

Des­pite the pro­posed cuts, in­sur­ance com­pan­ies’ stocks rose Monday. Hu­mana, for in­stance, had ini­tially pre­dicted worse cuts than what it in­ter­preted from Fri­day’s an­nounce­ment.

CMS is ex­pec­ted to re­lease the fi­nal rates on April 7.

What We're Following See More »
‘PULLING A TRUMP’
GOP Budget Chiefs Won’t Invite Administration to Testify
1 days ago
THE DETAILS

The administration will release its 2017 budget blueprint tomorrow, but the House and Senate budget committees won’t be inviting anyone from the White House to come talk about it. “The chairmen of the House and Senate Budget committees released a joint statement saying it simply wasn’t worth their time” to hear from OMB Director Shaun Donovan. Accusing the members of pulling a “Donald Trump,” White House spokesman Josh Earnest said the move “raises some questions about how confident they are about the kinds of arguments that they could make.”

Source:
A DARK CLOUD OVER TRUMP?
Snowstorm Could Impact Primary Turnout
1 days ago
THE LATEST

A snowstorm is supposed to hit New Hampshire today and “linger into Primary Tuesday.” GOP consultant Ron Kaufman said lower turnout should help candidates who have spent a lot of time in the state tending to retail politicking. Donald Trump “has acknowledged that he needs to step up his ground-game, and a heavy snowfall could depress his figures relative to more organized candidates.”

Source:
IN CASE OF EMERGENCY
A Shake-Up in the Offing in the Clinton Camp?
20 hours ago
THE DETAILS

Anticipating a primary loss in New Hampshire on Tuesday, Hillary and Bill Clinton “are considering staffing and strategy changes” to their campaign. Sources tell Politico that the Clintons are likely to layer over top officials with experienced talent, rather than fire their staff en masse.

Source:
THE LAST ROUND OF NEW HAMPSHIRE POLLS
Trump Is Still Ahead, but Who’s in Second?
8 hours ago
THE LATEST

We may not be talking about New Hampshire primary polls for another three-and-a-half years, so here goes:

  • American Research Group’s tracking poll has Donald Trump in the lead with 30% support, followed by Marco Rubio and John Kasich tying for second place at 16%. On the Democratic side, Bernie Sanders leads Hillary Clinton 53%-41%.
  • The 7 News/UMass Lowell tracking poll has Trump way out front with 34%, followed by Rubio and Ted Cruz with 13% apiece. Among the Democrats, Sanders is in front 56%-40%.
  • A Gravis poll puts Trump ahead with 28%, followed by Kasich with 17% and Rubio with 15%.
×