Friday, April 23, 2010

There is No Surprise Here

The Actuary for Medicare and Medicaid, Mr R Foster, is quoted in the Hill today about the impact of the new health care bill on both programs.

He states:

The CMS analysis, provided to The Hill on Thursday, concludes that the healthcare overhaul will reduce the number of the nation's uninsured from 57 million to 23 million.

However, the report raises several warnings about the impact of healthcare reform.

Foster states, "The additional demand for health services could be difficult to meet initially with existing health resources and could lead to price increases, cost shifting, and/or changes in providers' willingness to treat patients with low-reimbursement health coverage."

The demand will be local, and the greatest impact will most likely be in lower middle class communities where the bulk of the new "customers" will come from. This will most likely not be a uniform impact. In addition it is not at all clear how this demand will be managed. If local then the peak could be quite excessive. In addition physicians still have the right to not accept new patients. Thus if you are in the system now you most likely are safe but getting in will be difficult.

The report continues:

The report also suggests that some employers will stop offering their employees healthcare coverage benefits: "A number of workers who currently have employer coverage would likely become enrolled in the expanded Medicaid program or receive subsidized coverage through the [Health] Exchanges. For example, some smaller employers would be inclined to terminate their existing coverage, and companies with low average salaries might find it to their -- and their employees' -- advantage to end their plans..."

This may or may not become a problem depending on the plans offered. If the new plans are PPO type plans, or worse HM plans, then there will be a drastic reduction in service quality for those on the plans.