Earlier this month, the Centers for Medicare and Medicaid Services announced plans to cut Medicare’s payment rates to physicians by nearly 4%. The announcement comes just days before the program turns 56 on July 30.
The pay cut, which has received intense pushback from several physician groups, is slated to go into effect in 2022. But it won’t just affect doctors. It could have a host of negative consequences for the nation’s elderly.
Medicare’s payment rates are considerably lower than those from private insurers. According to one analysis from the Kaiser Family Foundation, private insurers pay healthcare providers up to 2.5 times more than Medicare. A separate study from the National Bureau of Economic Research reported that private insurers pay 25% more than Medicare for the same hospital services.
To get paid by the federal government, physicians have to complete loads of burdensome paperwork. Filling out those documents can take several hours per week — and thereby deprive doctors of time they could be spending with patients.
As a result, some have stopped seeing patients with Medicare. Nearly 30% of primary care physicians aren’t accepting new Medicare patients. Thousands of providers have opted out of the program entirely.
In some cases, seniors are purchasing Medicare supplemental plans or enrolling in privately administered Medicare Advantage plans for up to hundreds of dollars in additional expense in order to see doctors who refuse to participate in traditional Medicare.
Further decline in Medicare’s payment rates could cause even more doctors to leave the program. That’s concerning, given our country’s aging population. More than 61 million are currently enrolled in Medicare. And about 10,000 people turn 65 every day.
Seniors require far more care than other groups, from frequent screenings for cancer to specialty treatment for chronic conditions. More than 80% of seniors have at least one chronic disease. All told, patients aged 55 and older account for over half of all U.S. healthcare spending.
The Centers for Medicare and Medicaid Services’ proposed payment cuts may seem to hit doctors hardest. But if they respond to those cuts by limiting how many Medicare beneficiaries they’ll see, then seniors may not be able to get the care they need.