Medicare cuts may burden doctors

A plan to slash more than $500 billion from future Medicare spending -- one of the biggest sources of funding for President Obama’s proposed overhaul of the nation’s healthcare system -- would sharply reduce benefits for some senior citizens and could jeopardize access to care for millions of others, according to a government evaluation released Saturday.

Medicare cuts, proposed by the House in its healthcare package, were likely to prove so costly to hospitals and nursing homes that they could stop taking Medicare patients altogether, said the report, which was requested by House Republicans.

Congress could intervene to avoid such an outcome, but “so doing would likely result in significantly smaller actual savings” than is currently projected, according to the analysis by Richard Foster, the chief actuary for the Centers for Medicare and Medicaid Services. That would wipe out a big chunk of the financing for the healthcare overhaul package, which is projected to cost $1.05 trillion over the next decade.

More generally, the report questions whether doctors and hospitals would be able to cope with the effects of a package expected to add more than 30 million people to the ranks of the insured, many of them through Medicaid, the public health program for the poor.

In the face of greatly increased demand for services, providers are likely to charge higher fees or take patients with better-paying private insurance over Medicaid recipients, “exacerbating existing access problems” in that program, according to the report.

Though the report does not attempt to quantify that effect, Foster wrote: “It is reasonable to expect that a significant portion of the increased demand for Medicaid would not be realized.”

The report offers the clearest and most authoritative assessment to date of the effect that Democratic healthcare proposals would have on Medicare and Medicaid, the nation’s largest public health programs.

It analyzes the House bill approved this month, but the Senate is also expected to rely on hundreds of billions of dollars in Medicare cuts to finance the package that Majority Leader Harry Reid (D-Nev.) hopes to take to the floor this week. Like the House, the Senate is expected to propose adding millions of people to Medicaid.