Medicare in Financial Jeopardy
According to the Medicare Board of Trustees, Medicare Part A (hospitalization and skilled nursing care) will begin spending more than it takes in for the first time in the 30-year history of the program. The Republican leadership of the House of Representatives has stated that by 2002, the Trust Fund will be bankrupt. It is therefore no surprise that a key component of the drive in Congress to balance the federal budget includes steps toward reducing the costs of the Medicare program to the tune of $270 billion over 7 years.
The debate has become quite heated during the 104th Congress, often pitting the Medicare cuts against the nearly $250 billion in proposed personal tax cuts. Each is a component in the federal budget reconciliation legislation.
Congress Proposes Reform
Among the provisions in the Medicare Reform proposals passed by the House and Senate are details regarding eligibility, monthly premiums, annual deductibles, health plan options, medical savings accounts, and hospital and doctor payments.
The Congress’s Medicare reform bill establishes a new Medicare Choice program that would allow senior citizens to join private plans offering Medicare coverage. Among those choices could be health maintenance organizations (HMOs), provider-service networks, preferred provider organizations, and medical savings accounts (MSAs).
The Congressional Budget Office reports that Medicare per capita costs are expected to grow by about 8.2% per year. The House/Senate proposals expect to cut this growth to about 5% each year.
MSAs permit individuals with a catastrophic-care health plan to maintain MSAs with which to purchase a high-deductible policy, with the beneficiary receiving a percentage of leftover monies at the end of each year. According to Alice Rivlin, director of the Office of Management and Budget, MSAs encourage healthy beneficiaries to opt out of traditional Medicare, leaving behind sicker beneficiaries. Over time, such adverse selections could raise costs for traditional Medicare while providing cash rewards to healthier beneficiaries. An MSA also serves as a disincentive to maintaining a strong program of preventive care.
As the Medicare debate has expanded from traditional reimbursement issues, the American Heart Association (AHA) has focused on a number of patient access issues. This fall, the AHA Board of Directors expanded the scope of its Quality and Availability of Care public policy priority to address issues affecting the prompt and effective delivery of care. Among the areas of interest to the AHA are the effects of expanding managed care to senior citizens and the ramifications to cardiovascular patients.
The AHA is now a member of the Patient Access to Specialty Care Coalition, a joint effort of more than 100 patient, senior citizen, and physician groups. The mission of the coalition is to ensure that prompt and direct access to medical and surgical specialists is available for the vast majority of the US population. The coalition maintains that while some limits or controls on such access are appropriate, others may not be. Among its recommendations are the following: (1) financial incentives for nonreferral to specialists should be prohibited; (2) health plans should allow access to a full range of specialized care; (3) voluntary health agencies and specialty societies should be involved in the development of guidelines on the appropriateness of referrals; (4) potential enrollees should be provided with information regarding the quality and range of healthcare services provided by their managed care group; and (5) steps need to be taken to reduce inappropriate early hospital dismissals.
Senator Jesse Helms (R-NC) successfully attached an amendment to the Senate Medicare bill that provides Medicare beneficiaries with a guaranteed point-of-service option to visit specialists outside their HMOs.
The AHA also has strong concerns over potential cuts in graduate medical education. Such cuts mean that support of training for cardiac subspecialties and other needed cardiovascular care providers would be in jeopardy. Funding for biomedical research, research training, and training of cardiovascular practitioners is of the highest priority. Support for academic health centers is crucial to developing innovative approaches to the diagnosis, treatment, and prevention of cardiovascular diseases. The AHA supports the establishment of a graduate medical education trust fund and has opposed the extensive cuts recommended in both the House and Senate Medicare proposals.
A third issue addressed by the AHA is the impact of managed care practices on emergency medical care in a way that sets up barriers to the receipt of prompt emergency care. As such, it has supported legislation drafted by the American College of Emergency Physicians that would (1) establish a uniform definition of emergency care, (2) encourage the use of and removal of barriers to the 911 system, (3) eliminate preauthorization for emergency care, and (4) ensure 24-hour access and timely authorization for approval of additional services. Several of these principles have been incorporated into the Senate Medicare reform proposal. On the basis of legislation introduced by Barbara Mikulski (D-Md), Senator Bob Graham (D-Fla) offered a successful amendment to the Medicare legislation.
At this time, the House and Senate conferees are working out the differences in their respective Medicare reform bills. The AHA will continue to follow the Medicare debate and will also identify other opportunities to address the effects of expanded managed care on those with cardiovascular diseases.
- Copyright © 1996 by American Heart Association