Reform to accelerate health care costs

The recently passed health reform law would add about 1 percent per year in additional cost growth, according to a new analysis
by the Medicare program’s chief actuary.

Richard Foster estimated the new law would raise overall health care spending by an additional $311 million over current
law—a higher estimate than Foster made in December when he first examined the legislation.

The bill would insure an additional 34 million Americans, Foster estimated, about 18 million of them through the federal-state
Medicaid program. Also, the law’s cuts to Medicare spending would push back the insolvency of the program by 12 years
to 2029—although they appear to do so by double-counting those savings, Foster wrote.

One other problem with the lower Medicare payments is that it will likely push 15 percent of hospitals into the red by 2019.
Also,
patients covered by Medicare and Medicaid might have trouble finding doctors, at least in the law’s early years, as
doctors raise prices or cater to patients with private insurance. Foster called those scenarios “plausible and even
probable.”

To read Foster’s full report, click here.

Please enable JavaScript to view this content.

Story Continues Below

Editor's note: IBJ is now using a new comment system. Your Disqus account will no longer work on the IBJ site. Instead, you can leave a comment on stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Past comments are not currently showing up on stories, but they will be added in the coming weeks. Please note our updated comment policy that will govern how comments are moderated.