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If Obamacare is canceled: Chaos for Medicare?

by on Jun. 01, 2012, under Health

If the Supreme Court rules the Affordable Care Act is unconstitutional, and the entire 2700 pages of rules, regulations, policies and programs must be stopped……..what happens then?

I was reading an insurance industry newsletter today that pointed out how a negative ruling will create chaos for Medicare, Medicare Advantage, and Part D.

Medicare Advantage should be especially hard hit because “bids” for 2013 plans must be submitted on Monday, June 4th, and these bids are based on payments, policies and rules that are part of the Affordable Care Act. If the rules of the game change at the end of June, when the Supreme Court ruling is expected, do the plans have to start all over again with their plan design and pricing?

How would Medicare Advantage plans make changes based on the new/old rules and get all this done in time for CMS (Centers for Medicare and Medicaid) to review and approve revised bids? The plans then prepare their marketing materials, all of which must be reviewed and approved by CMS. Materials must be printed and mailed to current plan members by the end of September.  Four months of work would have to be crammed into the month of August if plans are required to adjust to a negative Supreme Court ruling on the Affordable Care Act.

If the entire law is canceled by the Supreme Court, what happens to the hundreds (thousands?) of rules and payment policies that have already begun? Health and Human Services Secretary Kathleen Sebelius wrote to Congress outlining potential consequences last year. At that time, she said the administration might have to suspend payments to Medicare Advantage plans.

Just a few of the Medicare-related rules that are part of the Affordable Care Act are:

*Reduced payments to Medicare Advantage plans – but offset by star rating bonus payments;

*50% discounts on brand drug costs for people in the Part D donut hole;

*Changes to the donut hole to make it smaller and less costly to seniors;

*10% increase in payment rates for primary care doctors;

*Reduced payment rates for certain specialists and tests;

*A long list of preventive services newly covered by Medicare, including an annual wellness exam.

A recent article in the Boston Globe said:

Medicare’s payment system, the unseen but vital network that handles 100 million monthly claims, could freeze up if President Obama’s health care law is summarily overturned, the administration has quietly informed the courts.

Although Obama’s overhaul made significant cuts to providers and improved prescription and preventive benefits, Medicare was overlooked in Supreme Court arguments that focused on the law’s controversial requirement that individuals carry health insurance.

In Pima and Maricopa counties, 45% of Medicare beneficiaries are enrolled in Medicare Advantage plans. In Pinal County, 49% are enrolled in Medicare Advantage. This could be a very interesting and crazy time for Medicare Advantage in Arizona and around the country!

This entry was posted on Friday, June 1st, 2012 at 8:28 am and is filed under Health. Tags for this post: , , , . You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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  • OllieWood

    Do you then advocate keeping all features of Obamacare just because it is too late to change it now while we are mid-stream?

    Medicare has a history of changing it’s enrollment periods on short notice.  The Medicare Advantage could resubmit for 2013 with the 2012 features, benefits, and payments.  Annual enrollment periods could be extended thru the end of March to allow companies to resubmit MA plans based on changes resulting from a cancellation of Obamacare. 

    Flexibility in changing enrollment periods makes sense to me.  I am independent agent who has offered MA and Med Supplement plans for 8 years.     

  • Dennis Byron

    These are just silly Democratic-party scare-the-hell-out-of-seniors election-year tactics:
    – another commenter suggests a solution to Medicare Advantage filing deadline issues but I doubt it would even come to that; the GAO says that the Obama administration is using the “new bonus points” 2012/2013 formula to make up for the reduced 2012 Part C funding in PPACA so the two will wash
    – the 50% discounts on brand name prescriptions for seniors who use more than $2980 in drugs (2012 rule) only affects 6% of seniors and Big Pharma made this promise outside of PPACA in a side agreement; the drug companies are unlikely to withdraw their promise (not out of the goodness of their hearts but because the bad PR would not be worth the few billion in revenue they would recoup)
    – the third point is the same as the second; Sebelius must have wanted to make the list she sent to Congress longer
    – the Annual Wellness Visit is a joke since it is not a physical exam; a physical is actually what seniors want and need (see http://www.aarp.org/health/health-care-reform/info-07-2011/free-medicare-wellness-exam.html; but if you got a free physical this year, don’t tell your doctor; many aren’t reading the AARP bulletin )

    As for the quote from the Boston Globe, for starters consider the source, the most left-wing newspaper in the country. But not to worry. The 100 million claims a month (if that’s the right number — more than two for each of us seniors a month?) are all handled by private insurers and they won’t “freeze up” because they want to get paid (it’s called doing business, something the Democrats don’t seem to understand). 

  • Whew2

    Obamacare has at its core first theft from Medicare and eventually the elimination of Medicare. Yes I have read it, so best not to opine unless you have also.

    • Denise_Early

       Democrats want to eliminate Medicare? In fact, most Democrats want “Medicare for All”, and many were disappointed that Obamacare left the healthcare system at the mercy of for-profit insurance companies.  The mandate was a gift to insurance companies so they would not fight the reform.

      • Whew2

        Many make the mistake of thinking one payor is still Medicare. Instead of heading down the road of a one payor system we need to enhance the competition in the free market system. Drop barriers that prevent buying insurance across state lines, would be a start.

  • Carly_EngageAmerica

    A critical step toward fundamental Medicaid reform is to
    repeal Obamacare. The health care law significantly expands Medicaid without
    offering any solid reforms to address its sustainability. Without repeal, the
    problems facing Medicaid and the rest of the health care system are
    extraordinary.

    Another key step in fundamental Medicaid reform is to put
    Medicaid spending on a budget. Although states must balance their budgets,
    federal Medicaid spending has no limit. The more a state spends, the more
    federal taxpayers must pay out. Therefore, it is critical that federal Medicaid
    spending is put on a dependable and sustainable path.

    In conjunction with budgetary recommendations, policy
    objectives must be clear. These policies should reflect the broader goals of
    establishing patient-centered, market-based solutions that reduce.

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