For years now, Congress has been delaying Medicare payment cuts, with the post recent postponement happening this week, just in time to push off the cut that was scheduled for today. This time, the delay is only a month, and the payment cut is now scheduled for January 1. But the AMA is pushing to have the cuts postponed until the end of next year, giving the next Congress time to figure out a better solution for the financial woes facing Medicare (presumably a solution that doesn’t involve a 25% reduction in how much Medicare pays doctors).
In a country where we have a huge disparity between the wealthy and the poor, and where access to medical care is often closely related to one’s financial standing, Medicare stands out as being a beacon of fairness. All seniors (in addition to younger people with disabilities) qualify for coverage, and basic hospital insurance (Medicare Part A) is free for nearly all seniors. Part B (which helps to pay for outpatient expenses) has a premium, which is deducted from Social Security checks for most seniors. The premium does increase for individuals earning more than $85,000/year or couples earning more than $170,000/year. But that is a very small chunk of the Medicare-eligible population, and most seniors pay the basic rate: $96.40/month in 2010. Medigap policies and Medicare Part D policies (prescription coverage) are available to Medicare enrollees who want to purchase them, and are provided by private health insurance carriers. But there are various rules in place to make sure that people have a guaranteed-issue window during which they cannot be declined for coverage under a Medigap or Part D plan. All in all, the Medicare system does a pretty good job of making sure that seniors have access to at least basic health care regardless of their financial situation.
But Medicare is on shaky financial ground, and Congress has known for years that they need to balance the Medicare budget – hence the perpetually-threatened reimbursement cuts for physicians. And even with Medicare coverage, more seniors than ever before are struggling to pay for medical care. In addition to opposing the proposed payment cuts, the AMA would also like to see balance-billing as an available option for doctors to charge patients more than the Medicare fee schedule currently allows.
It’s easy for people who aren’t in the medical profession to take the position that doctors should just accept the Medicare payment cuts, as they are probably more able to withstand the financial setback than the average American senior citizen – most of whom rely heavily on the Medicare system. But we’ve also created a system that requires a huge financial outlay in order to become a doctor in the first place, and that has to be taken into consideration when we look at physicians’ incomes. There is no simple solution, but in order to keep the health care system sustainable, it would seem that most players in the industry may need to accept at least some sort of pay cut. Health insurance agents will see lower incomes across the board starting next year, as the new MLR requirements result in lower commissions, and it’s likely that numerous other aspects of health insurance administration will see financial cuts in order to comply with the new law. While these changes might not have been warmly welcomed, they will ultimately help to make the system sustainable in the long term. The same could be said for the rest of the health care industry if similar cuts are implemented in other areas. Although the physician reimbursement cuts are unpopular with most doctors, they may be the only way to keep Medicare as a viable payer for seniors’ health care needs. And ultimately, it’s in the best interest of both doctors and seniors to keep Medicare around.
