Economics, Entitlements

Obama’s health-care reform cuts: How they affect Medicare patients

White House Flickr stream

White House Flickr stream

It’s fair to say that President Obama’s attacks on the Romney-Ryan campaign’s Medicare proposals didn’t work out exactly as planned. Instead of the reliable beat-up-the-Republican routine, the Obama campaign is on the defensive regarding its own plans to cut over $700 billion from Medicare.

What’s unclear is how these cuts actually would affect seniors covered by Medicare. The Obama campaign argues that these aren’t cuts but “savings.” Medicare patients will still be entitled to the full range of benefits. What Obamacare cuts is the amounts Medicare will pay doctors and others who provide those services.

Here’s the problem: The government can pay what it wants, but it can’t force doctors to accept it. Doctors are already saying no to Medicaid, which pays doctors at lower rates than Medicare. A study published in Health Affairs found that nearly one-third of doctors won’t accept new Medicaid patients, and the GAO found that kids on Medicaid had even poorer access to doctors than children with no insurance at all.

Under Obamacare, Medicare reimbursement rates will fall below Medicaid levels by 2020. Some Medicare patients will have trouble finding a doctor and may instead use the emergency room. For instance, a person who retired to Florida would need to find a new physician, but currently only 59 percent of Florida doctors will accept new Medicaid patients. In addition, the quality of doctors who will accept low Medicare reimbursements may be lower than retirees are used to currently, and wait times for these doctors may increase. Some Medicare patients already wait longer for doctor’s appointments than other patients; diminishing Medicare reimbursements for doctors will only accelerate this trend. In short, Medicare patients may become the bottom tier in a two-tier health system.

But don’t worry, seniors, all is well.

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