Over the past two weeks, theres been a lot of coverage of the Presidents misleading promise that "If you like your plan, you can keep your plan. No matter what. Period." But we mustnt forget that there was a second part to that promise: "If you like your doctor, you will be able to keep your doctor. Period." It turns out that isnt necessarily true, either. On Saturday, the Wall Street Journal reported that, due to Obamacares cuts to Medicare Advantage, among other factors, UnitedHealth expects its network of physicians "to be 85 percent to 90 percent of its current size by the end of 2014." The result? Some retirees enrolled in Medicare Advantage will need to find new doctors. And its a trend that could accelerate in future years.
Obamacare cuts Medicare to fund coverage expansion
First, some background. Over the next ten years, Obamacare was designed to spend around $1.9 trillion on expanding health coverage to the uninsured. The law pays for this new spending with $1.2 trillion in new taxes, and $716 billion in cuts to Medicare, relative to prior law. Of the $716 billion in Medicare cuts, more than one-fifth—$156 billion—comes from cuts to the market-oriented Medicare Advantage program. Medicare Advantage, also known as Medicare Part C, allows private insurers to administer the Medicare benefit; more than one-quarter of all seniors are enrolled in this program.
The logic for cutting Medicare Advantage—and its not an unreasonable one—is that prior to Obamacare, taxpayers paid $1.14 to cover a Medicare Advantage enrollee for every dollar they paid to fund someone in the traditional, single-payer Medicare program. The Affordable Care Act cuts 14 cents from the Medicare Advantage reimbursements in order to bring the two programs in line.
‘Doctors in at least 10 states have received termination letters
The private insurers who supply Medicare Advantage plans, like UnitedHealth and Humana, have been responding to the cuts by squeezing out inefficiencies in the way they deliver care. One obvious way to do that is to pay doctors and hospitals less—or kick out the providers who refuse to accept lower reimbursement rates. And thats what United has done, according to the WSJ report from Melinda Beck.
"Doctors in at least 10 states have received termination letters, some citing ‘significant changes and pressures in the health-care environment," writes Beck. "The notices also tell doctors they can appeal within 30 days. That means many physicians and patients wont know for sure who is in or out of UnitedHealths Medicare Advantage networks before the open-enrollment period to switch Medicare plans ends on Dec. 7."
According to Beck, "Among the practices UnitedHealth has dropped are Moffitt Cancer Center in Tampa, Fla., and the Yale Medical Group in New Haven, Conn., which includes 1,200 faculty physicians." Yale physicians are not the most sympathetic group; the Yale-New Haven Health System exerts near-monopoly power in Connecticut, and uses that power to keep prices high. Its not surprising that UnitedHealth would drop them in an effort to keep costs down.
Notably, Beck reports that Uniteds competitors are not shrinking their networks as aggressively. "Other Medicare Advantage [plan] providers, including Humana Inc., Aetna Inc., and WellPoint Inc., said they are always evaluating their provider networks, but doctor groups say none appear to be shrinking them to the extent of UnitedHealth." But United is the nations largest supplier of Medicare Advantage plans, due in part to their marketing deal with the AARP.
Another unrealistic—and misleading—Obama promise
Given the fiscal unsustainability of the Medicare program, its a good thing that insurers are doing everything they can to keep costs down. But keeping costs down will involve shutting thousands of doctors out of the physician networks that private insurers use. And these Medicare cuts arent being used to make Medicare more solvent or to reduce the deficit. Theyre being used to offset increased spending elsewhere.
The President made a categorical promise: "If you like your doctor, you will be able to keep your doctor. Period." Its another promise without which Obamacare would have never become law. And its a promise the President could never have sincerely intended to keep.
Original Source: http://www.forbes.com/sites/theapothecary/2013/11/18/do-you-like-your-doctor-obamacare-drives-unitedhealth-to-downsize-its-medicare-physician-networks/