Physicians fees, budget assumptions and Medicare Advantage Plans

2013

When a government agency such as the Congressional Budget Office (CBO) does budget projections or other cost estimates it must use assumptions based on existing law. Makes sense, right?

One area where that logic doesn’t currently make sense is Medicare. The law says that physician fees will be cut by some 27%. The law has prescribed significant cuts for years and each time they have been blocked by Congress, including this year. The CBO always puts a caveat in its reports noting the difference between their assumptions and the likely reality.

Now The Center for Medicare Services (CMS) is planning a cut in payments to Medicare Advantage Plans (Part C) of 2.2%, This cut is in addition to the required cuts in Obamacare. Together the cuts are between 7 to 8%. The CMS reasoning is that the fees paid to physicians will be cut thereby lowering plan costs ….. that is the same cut that Congress has not allowed to happen for years …

Does anyone seriously think that these cuts to Part C plans will not in the end lower benefits and/or raise premiums for Medicare beneficiaries? And there you have one of the great concerns about Obamacare … shifting costs from one segment of society to another along with unintended consequences.