The Office of the Actuary of the Centers for Medicare & Medicaid Services (CMS) recently released two new memoranda on the “Patient Protection and Affordable Care Act,” as approved by the Senate on December 24.

In one memorandum, CMS Chief Actuary Richard Foster discusses the impact the bill would have on costs, savings, and coverage. The analysis estimates that the Senate-passed bill would increase national health expenditures, from 2010 through 2019, by a total of $222 billion, or 0.6 percent, over the updated baseline projection that CMS released in June 2009. It further projects that the bill’s coverage provisions would cost an estimated $882 billion over the first ten years. Also, an estimated 34 million currently uninsured people would gain comprehensive coverage by 2019 through the health insurance exchanges, their employers, or Medicaid.

The memo also notes that industry fees imposed on health insurance plans (e.g., the premium tax), prescription drug manufacturers, and medical device manufacturers generally would be passed through to consumers in the form of higher drug and device prices and higher health insurance premiums. The memo suggests that these provisions would increase overall national health expenditures by an estimated $5.8 billion in 2011 and $13.8 billion in 2019.

A second memorandum briefly discusses the Senate bill’s impact on Medicare. This memo notes that the proposed Medicare funding cuts and the increased Medicare payroll tax for high-income persons would postpone, from 2017 to 2027, the date of exhaustion for the Medicare Part A trust fund. It also emphasizes, however, that the savings resulting from these provisions cannot be simultaneously used to finance other federal outlays, such as coverage expansions, and to extend the solvency of the Medicare trust fund. The memo further cautions that “reductions in Medicare payment updates to Part A providers, based on economy-wide productivity gains, are unlikely to be sustainable on a permanent annual basis.”

Tags:

This entry was posted by Adam V. Russo on Tuesday, January 19th, 2010 at 2:37 pm and is filed under Health Care Legislation, Medicaid, Medicare. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.