Friday, December 11, 2009

HR 3590, The CMS Actuary and Medicare

The CMS Actuary released a report to Congress on the costs of HR 3590 and the impact on Medicare. It clearly shows what we wrote this morning that the expansion to the 55-64 year old group to Medicare access would be quite costly.

Let me expand what I wrote this morning.

1. If we expand the Medicare coverage to those 55-64 and we demand parity to what is there now for those who paid more than they will ever get in return then they will have to pay $8000 pa per person.

2. The Government will limit payments to to those under 400% of the poverty line. Thus even if the amount were to be $8000, the actual amount would be well less than $3000. This means for every enrollee there would be a $5000 pa added burden.

3. If we assume that the enrollees are about 40 million in this program as anticipated by the Actuary's report, then this is another $200 billion per year added to the deficit. And that amount is growing at 4-6% pa! Are these people insane!

We are deeply concerned about this specific proposal. It will destroy Medicare as we know it, it will also have a bifurcating effect on the provision of health care, good service for those who can pay and poor if not incompetent service for the others. It will like Greece, where if you slip the provider some added incentives you get to go around the line and get care. Otherwise you just sit and wait, and wait, and wait.