As much as the left would like to deny it, healthcare is a product or service, just like any other. Up until the mid-20th Century, healthcare was just like any other service. You went to the doctor and paid him. Modern, high-tech, modern medicine is expensive. There is a market to spread out the cost.
When governments interfere in the market, they usually mess it up. This is a lesson that the Biden administration will never, ever learn. Now, they are proposing to mess up Medicare Advantage again. Many healthcare providers are not happy with the details.
The proposed Medicare Advantage payment policy update by the Biden Administration could hurt physicians and other healthcare providers’ practices and patients.
Why it matters: The Biden administration has few allies left after insurers and providers joined forces to oppose the proposed changes.
CMS could still reverse course or defer the changes, but this outcome is becoming more likely as more and larger industry groups express their discontent.
News that is driving the headlines: Last month, the Centers for Medicare & Medicaid Services proposed an increase in revenue of 1.03% on average for private Medicare plans by 2024.
Insurers say that changes to the MA Risk Adjustment Model, which adjusts plan payments based on the health and demographics of enrollees, will result in a cut net next year.
Many consumer groups and insurers have strongly opposed the policy. Republican lawmakers accuse the Biden administration of cutting Medicare by this proposal.
Modern Healthcare reported that smaller non-profit plans also like the idea. Humana CEO Bruce Broussard stated during a Tuesday conference that the rate notification could benefit the insurer.
In recent years, the government’s involvement in health care has been problematic.
Dr. Brian Miller MD, who is a member of the Medicare Payment Advisory Committee (MedPAC), did not seem to be optimistic about the changes.
Brian Miller, assistant professor of medicine, John’s Hopkins University was the focus of complaints against the status report prepared by policy analysts. He argued that the report highlighted only the negatives of the program and that his past suggestions had not been taken into account.
Miller, who believed that the report was anti-Medicare, challenged the analysts to list three positive aspects of the program. This questioned the objectivity and impartiality of the report. They replied that they are always striving for balance and that the commission is an independent nonpartisan agency that advises Congress about Medicare. The commission has a history of supporting private Medicare plans. Miller refused to let up when chair Michael Chernew of Harvard’s Healthcare Policy Department tried to pass the conversation on to the next member.
He said: “I believe this is important to the public record because it shows how we balance ourselves and our approach to programs. This didn’t feel very balanced.” “There are a lot of things that could be better. It’s important to me that the policy analysis is neutral and thoughtful.
It would be fascinating to know how exactly the changes to payment plans based on demographics and health statuses of enrollees will work. Health insurance and life plans do take into account the health of an individual enrollee. Insurance plans are used to spread risks amongst a large group of people and thus spread the costs of an event. For example, auto insurance requires a monthly premium to avoid a sudden and potentially catastrophic cost.
What about “demographic Statuses”? What does this mean? Does this mean that the government is attempting to “equity” or does it have a scientific basis? Black Americans, for example, are more susceptible to sickle cell anemia than those of European descent. Genetic matters are included in the risk assessment. The Biden administration, and the federal government as a whole, have a track record in dealing with demographic issues. This is why one should be suspicious.
This is fundamentally a market-related issue and the government does not have any constitutional basis to get involved. Markets are usually able to make the right decisions when left alone. Politicians can’t resist putting their finger in.