Latest news with #JonathanGruber
Medscape
25-07-2025
- Health
- Medscape
Medicare at 60: Good for Doctors, Patients?
Sixty years ago, Congress passed legislation that created Medicare . In 1966, its first year of implementation, there were 19.1 million enrollees. Almost a decade later, enrollment had grown to 22.5 million. Today, 68.8 million Americans have Medicare coverage, with about half enrolled in Advantage plans. The original idea for this insurance program was even bigger, with President Harry Truman endorsing universal coverage in 1945. As Medicare turns 60, Medscape convened an expert panel to discuss the successes — and shortcomings — of this landmark insurance program. Jen Brull, MD: For everyone on the panel, how might Medicare use AI (artificial intelligence) more generally over the next 50 years? Jonathan Gruber, PhD: As with many things, there's a right level of prior authorization, and we need to let data inform that. We need to be collecting a lot of data on who's using prior authorization, how it's being used, and how productive it is. And we need to recognize that the right answer is not "zero" or "every single visit." It's somewhere in between. We need to be putting more resources into studying that and figuring out what the right level is. I want to take a slightly more optimistic view of AI in two senses. One is, I think that right now a fundamental problem in healthcare is that not all people are practicing at the top of their professional abilities. We have doctors taking blood pressure in some places; doctors should never take a blood pressure. We have nurses who are unable to give pills in some places, and nurses should be perfectly qualified to give pills. I think AI can give us more confidence in allowing people to practice at the very top of their professional abilities. The other is long-term care. Elder loneliness is a huge problem in our country; proper long-term care is a huge problem. The attacks on immigration in this country — and there are attacks — are going to make the problems worse, because many of the caregivers in the United States are immigrants. My hope is that AI can play a productive role in helping provide care for our nation's elderly and disabled. So I have a slightly optimistic view of how AI can maybe make our healthcare system better. Improving Diagnosis Norman Ornstein, PhD: Let me give a slightly optimistic view. I have regularly read in the health and science sections in the Washington Post and The New York Times these stories about people who have horrendous health issues that go on for years that are undiagnosed or misdiagnosed until somebody realizes it's some rare thing that they had never encountered before, or you find a physician who'd encountered it once and they managed to deal with it and cure it. You can imagine AI being an enormous boon to physicians, allowing them to put in symptoms that somebody's having and a little bit of history and end up finding things that siloed physicians otherwise would not see. On the other hand, you can see AI being used, and sometimes misused, by insurance companies for billing purposes or to try to find ways to save money, but also to substitute for physicians — whether that will be a good thing or a bad thing. Claudia M. Fegan, MD: I think Jon made some very important points, that there are opportunities to use AI to assist physicians in diagnostic approaches. It also would be very beneficial in terms of identifying patients. We have a lot of patients who we are not touching, and there are preventive measures that we could take. Given a certain family history, given the vital signs, their weight and their background, you could anticipate certain problems that are not addressed. And I think that can push us to make better, data-driven decisions. It's an advantage that AI can provide, and we can easily put it in the hands of clinicians who are on the front line to make good decisions about patients going forward. But I think the threat here is insurance companies who may misuse it for other purposes, whether to deny coverage to people or to try to avoid expensive treatments that might be appropriate. Brull: Certainly, as one of the two primary care specialists in this group, I would say I'm very optimistic about AI and I see that it could be a team member. I also often say that I've never seen a chatbot give a hug to a patient. And as far as I know, patients don't just come to the doctor to plug their finger in and find out what's wrong. They come to partner, and so I think all of us see optimistic futures let's start with our two nonphysicians on the panel for this question. A Public Good Do you think Medicare has been good to the American people financially? Doctors complain all the time about reimbursement rates, but do you think those rates are reasonable? Let's start with you, Dr Ornstein. Ornstein: I think physicians in many instances have found ways around the lower reimbursement rates, which has often led to many unnecessary tests or other procedures so that they can get compensated adequately. I am very fearful, going back to a point that I made earlier, if these sequesters, this is the statutory Pay-As-You-Go plan that requires big cuts in Medicare because of the deficits being run up in the reconciliation bill, they limit them to 4% a year. But you know, that could even cut reimbursement rates more, and that will create a big problem. It may mean more physicians who decline to take Medicare, and that is going to create a burden for an awful lot of people along the way. Gruber: In terms of your specific question, what has it meant for the financial health of Americans, it has unambiguously been incredible. Amazing studies show that the introduction of Medicare led to massive reductions in the financial uncertainty facing elderly Americans with their medical spending. Has it been good for doctors? Unambiguously. It has been a huge boon to their business. One thing we know from every health economic study is, if you lower prices, more people use more medical care. Medicare did that. They lowered prices and people use more medical care. It's been a huge boon to the medical industry. I think the big question going forward is how to set the rates and in a way that balances our fiscal needs against the needs to have qualified physicians participate in Medicare. Quite frankly, it seems like the direction of that is clear: Medicare overpays subspecialists and underpays primary care doctors. And that's because the panel that set Medicare rates has been politically captured by the subspecialists. I find it hard to believe that if orthopedists made $700,000 instead of $1 million per year, they'd quit Medicare. But it is plausible that a primary care physician making $150,000 or $250,000 might actually quit Medicare. These are people who could go into other lucrative professions. I want to second Claudia's call for more data. We need to really understand how physicians will respond to reimbursements, and we need to set reimbursements in a way which balances these two needs. Ornstein: Let me add one thing. Just do a thought experiment. What if we'd never had Medicare? What if we didn't have any program with government support for a population of older Americans? The number of people who would've died prematurely, the number who would've used up every portion of their assets trying to cover just basic medical care, would've been enormously high. Society would've been so much poorer overall if there had been no Medicare. And if we see assaults on these programs, we're going to go back to having bankruptcies and people who won't get the care because they can't afford it. Brull: Dr Fegan, as a physician, what are your thoughts? Fegan: I think Medicare has made a tremendous difference. And if you just want to look at the data on life expectancy for Americans compared to other wealthy nations: If you look at the top 17 wealthiest countries in the world, we are really near the bottom up until age 65. And the dramatic change that occurs after 65 in terms of life expectancy in the United States, compared to other wealthy nations, is that we shoot to the top. And this is because Medicare has provided access to care for people who didn't have access to care. For physicians, and it really depends on the population of physicians you're talking about, it guaranteed that they were going to be compensated for patients that they may have been taking care of without appropriate compensation. The majority of hospitals in this country would not survive without Medicare. The majority of patients in hospitals in the United States are Medicare recipients. I would say that prior to the Affordable Care Act, 80% of our outpatients were unfunded and 56% of our inpatients were unfunded. Now we bounce between 60% and 65% of all our patients being funded, which made a tremendous difference for us. Medicare has made being a primary care physician feasible, whereas previously it was a financially precarious situation for many of them, in terms of being compensated for the services that they were providing. They might provide services for a chicken or for a free meal, as opposed to knowing that they would be paid at the end of the day, and they would know the rate they were going be paid. The challenge with Medicare is that it pays different rates within the city. I live in Chicago, and if you have an office downtown, the rate you receive is different from if you're on the South Side or West Side. We have to look at how we make those kinds of decisions. What We Pay Our Doctors Brull: Dr Ornstein, legislation in 1993 set targets for spending growth in physician services but did not account for inflation in practice costs. Why can't Congress seem to take care of the so-called doc fix? Ornstein: I think there are two reasons. One is obviously money. It means a lot more money, and they have been at least cognizant of the problems with the solvency of the program, looking at the long run. The second is that doctors have really not been a very effective lobby. To circle back to Medicare Advantage, I'd say the prime reason reimbursement rates are 130% or whatever, when they were supposed to be 90%, is because of the effectiveness of the insurance lobby with Congress. Congress could have stepped in and done something about that. If you look even, for example, at the Affordable Care Act, it was actually then-Senator Al Franken [D-Minn.] who said, 'If you're providing coverage under the Affordable Care Act, 85% of the money that you take in has to go back to patients.' There are ways for Congress to deal with this, but they respond to the lobbying that they get and the effectiveness that they've seen. And frankly, physicians have not been very effective. The physician community was extremely effective in keeping Medicare from being enacted for decades when the [American Medical Association] was an extraordinarily powerful lobby, until the Great Society and these enormous numbers of Democrats coming into Congress in 1964 enabled it to happen. But, if we're looking at weakness in lobbying efforts, physicians are in the top 10. More Pay Cuts Brull: Another one for you, Dr Ornstein. The recently passed budget reconciliation bill includes cuts in government spending. The Congressional Budget Office projected that this will include about $500 billion in mandatory reductions in Medicare spending between 2026 and 2034, or about a 4% reduction in payments to hospitals and physicians. Congress could act to block the cuts. Do you project that they will do so? And if they do not, what may be the effect on physicians and the program over the next decade? Ornstein: It's kind of interesting. We've had these so-called pay-go rules — pay-as-you-go — in one form or another since 1990 and the budget agreement that then-President George Herbert Walker Bush enacted with Congress, which was highly controversial because it violated the 'Read my lips: no new taxes" pledge. It has worked reasonably effectively, at least at different times. But in the past, when we have seen pay-go implemented, Medicare is one of the prime elements that gets these cutbacks or sequesters. Whenever it's happened, Congress has then stepped in and ameliorated it because they saw that it was going to have a bad effect. I'm not 100% sure it's going to happen this time. And the fundamental reason is that we know Republicans, certainly going back at least to the Newt Gingrich era in the House, have wanted to take over the Medicare program. Medicare as we know it would not exist if they had had their way. It would be in some other form. The sequesters don't allow cuts in Medicaid, but they have these big cuts in Medicare, and I think it's a dicey proposition. But let's just note, Jen, that if we do see these cuts, they will hit the reimbursement rates for hospitals and for physicians. Just start with hospitals for a minute, where we know the Medicaid cuts are going to have a devastating effect, especially on rural hospitals that have already been reeling even without these cuts. What we know is that if any hospital closes, it puts enormous pressure on other hospitals, and the other hospitals are not going to get the money. They're going to cut back on services. We've seen in Atlanta, for example, where an urban hospital had to close, and every other hospital found that their emergency room services were suddenly just completely overloaded. This system looks like it's separate parts private care, Medicare, Medicaid, but they're all interrelated, and it's like a set of dominoes. If one begins to fall, the others are affected by it. These cuts would be catastrophic if they are allowed to take place, and whether enough Republicans will join with Democrats to ameliorate that, which of course then means bigger deficits, we don't know for sure.
Medscape
25-07-2025
- Health
- Medscape
Medicare at 60: Care, Cost, Control
This transcript has been edited for clarity. Jen Brull, MD: Sixty years ago, Congress passed legislation that created Medicare. In 1966, its first year of implementation, there were 19.1 million enrollees. Almost a decade later, enrollment had grown to 22.5 million. Today, 68.8 million Americans have Medicare coverage, with about half enrolled in Advantage plans. The original idea for this insurance program was even bigger. It started as a plan for all Americans, with President Harry Truman endorsing universal coverage in 1945. Today we'll take a look back at how we got there and look ahead to the next 50-60 years. How might the future of medicine be shaped by Medicare policy? I'm Jen Brull, MD, president of the American Academy of Family Physicians. We represent nearly 130,000 family physicians across the country, residents, and medical students. I'm also a senior advisor for clinical strategy and physician well-being at Aledade, where I help physicians in independent primary care succeed in the shift to value-based care. I'm delighted to be joined by three outstanding panelists. Dr Claudia Fegan recently retired as chief medical officer at Cook County Health in Chicago, the third largest public health system in the country, providing care for over 190 years. She is also the national coordinator of Physicians for a National Health Program, which advances a universal health system. Thank you for being with us, Dr Fegan. Dr Jonathan Gruber is joining us from the Massachusetts Institute of Technology in Cambridge, where he chairs the economics department. He previously consulted for the administration of former President Barack Obama in crafting the Affordable Care Act. He was also instrumental in creating Massachusetts 2006 health reform law, which led the state to the lowest uninsured rate in the nation. Dr Norman Ornstein is a retired scholar from the American Enterprise Institute and co-host of the podcast Words Matter . He has written extensively about Medicare, privatization, Part D, and the program's inability to negotiate drug prices. He's also the author of numerous books, including Intensive Care: How Congress Shapes Health Policy . Thank you all for being here today, and let's get started. Five years from now, the last of the baby boomers will turn 65 and 1 in 5 Americans will have Medicare coverage. Dr Fegan, I know that many physicians debate about opting out of taking Medicare and perhaps only seeing patients with other insurance or going the direct primary care route. Paying the Doctor Brull: Can physicians survive without taking Medicare patients? Do you think more physicians will do so in the next decades? Claudia Fegan, MD: I think that the advancement of concierge medicine, where physicians are entering into direct financial agreements with the patients they're seeing, as opposed to using Medicare as a payer, is a trend. However, the majority of physicians in this country today are in an employment arrangement as opposed to being in private practice, which is where the majority of us were, say, 40 years ago. I would say that those large groups, as well as hospitals, cannot survive without Medicare. The majority of people over the age of 65 use Medicare as their insurance. As you pointed out, the majority of Medicare recipients today are now in Medicare Advantage plans, which are private plans. But without Medicare, I don't think it's economically feasible for the majority of physicians to survive. There will always be some who are catering to a group of patients who have the financial wherewithal to afford their care. But that is not the majority of Americans in this country. And more importantly, I would say that the majority of hospitals and large outpatient facilities cannot survive without payments or reimbursements from Medicare. Shaping Care Brull: Dr Gruber, you've done a lot of research on insurance policy design, like the use of copayments and formularies and decreasing utilization of unnecessary care and specific services that patients receive. How has Medicare policy impacted the types of drugs, imaging, and treatments that physicians can prescribe or perform? Jonathan Gruber, PhD: That's a great question. Thanks for having me here. Medicare influences [coverage] a lot through the copayments that they charge. Remember, Medicare, at least 30 years ago, was not actually that great of insurance. Most employer plans had very low copayments and deductibles. Medicare actually had relatively high copayments and deductibles. Today, Medicare looks more like a typical employer-provided health insurance plan in imposing copayments and deductibles on people using services. There is mixed evidence on the implications of that. My general read is that when you impose a copayment or deductible, people use less of all services, both necessary and unnecessary. But there does not look to be enormous evidence that, at least at the level of current Medicare copayments, it significantly impacts their health to be using less of those services. But then there's the long run, which is when Medicare covers services; it changes the shape of innovation in the United States. If Medicare says, "We're covering this surgery," people are going to innovate and create surgeries covered by Medicare. Setting Prices Brull: Medicare has a huge impact on the long-run structure of what is provided by healthcare in the United States, and that's important to consider as well. As a follow-up for anyone on the panel: As technological innovation in medicine advances, how might the program manage patient access and costs? Fegan: I think it's important to use data to make these decisions, and as clinicians, we appreciate — for example — peer-reviewed articles which compare whether something is a useful or beneficial service or not. You know the slogan about when you have a hammer in your hand, everything looks like a nail? When there's a new innovation, there's an inclination to want to use it. But I think the most important way to make these decisions is to do studies where we look at whether there's a real benefit to the innovation. And when clinicians use studies and examine outcomes, they make better decisions than just what happens to be the most exciting or innovative approach. Gruber: I want to strongly endorse that comment.I think we are facing what I call sort of a tsunami of incredibly effective but incredibly expensive new treatments, from GLP-1s for weight loss to new cell and gene therapies. Society is going to have to face a choice of how much we're willing to pay for those. And the only way to make that choice is not to leave it to the free market, because the free market is broken in healthcare. I teach basic economics, and I teach the reasons why the free market might not work. As Kenneth Arrow wrote in 1963, every one of those reasons applies to healthcare. Healthcare is a broken market. The government needs to be involved in setting prices, but the only way it can do so is with evidence on what works and what doesn't. This is what the rest of the world does. Norman Ornstein, PhD: Those are hard questions to ask, and we need to really invest resources in asking them. Let me just add that we don't know what impact artificial intelligence (AI) is going to have on the practice of medicine, at least not entirely. Something like 25 years ago, I went to a series of conferences with healthcare providers and talked about how I expected that within a short period of time — just as we saw with automobiles where you could plug something in and get a complete readout of what the issues were with the car — it wouldn't be long before people would go to a nurse practitioner, put their finger into a little device attached to a computer, and get a readout. And that would make general practitioners almost obsolete, and they would go right to specialists if there were issues. Obviously, that hasn't happened, but AI could be a game changer in terms of both providing great opportunities where physicians might miss things because they're siloed but also where it will change the whole provider community. The Medicare Advantage Paradox Brull: Dr Gruber, in 1997, Congress created Medicare Advantage plans as a way to help curb growing expenditures. About half of all beneficiaries are now enrolled in this type of coverage. We know that Advantage plans are more aggressive in using prior authorization. As these plans grow, what are the implications for patients and physicians in the coming years? Gruber: Economists don't often come to a fairly consistent answer on a question, but there are a lot of studies which I think perhaps surprisingly show that Medicare Advantage saves money. These plans deliver care more and cost-effectively. Medicare Advantage doesn't save federal spending, and I'll come back to that, but it delivers care more cost effectively without actually harming health in a measurable way. I know people are upset about prior authorization and other things, and I'm not saying it doesn't have negative effects on people's mental health and well-being, but the truth is, there are a number of nicely done papers now which show that people in Medicare Advantage plans aren't in immeasurably worse health as a result. So, I think care management can be productive. The problem is, and Norm is the expert on this, that we set up a program which was originally designed to save money and took on a life of its own. Remember: When we set up Medicare Advantage, it paid at first 95% and then 90% of what Medicare paid. It then went up to 132% of what Medicare paid. How can a program save money if it's paying 132% of the alternative? The answer is, because it became a goal that people should have managed care, not that Medicare should save money — and that's the problem. I think Medicare Advantage can be a proper part of a well-functioning system, but we have to fix the reimbursement so we're not overpaying the plans, and this is becoming the major money maker for all insurance companies in America. Who's Overseeing Utilization Management? Fegan: One of the problems with Medicare Advantage is that the insurance companies have learned to game the system and figured out how to get better reimbursement. The other problem with prior authorization is that the Kaiser Family Foundation published a study that showed Medicare Advantage averaged two prior authorizations per enrollee at a time period when traditional Medicare averaged only one prior authorization for every 100 enrollees. While prior authorizations may have an appropriate place, they're designed to decrease utilization and decrease particular services. Patients who have a prior authorization denied, less than 10% of them appeal that denial. But on the other hand, when the denials are appealed, over 80% of the denials are overturned. The prior authorizations use AI. I think what happens with the appeal is that it goes to a physician who thinks this was a reasonable study or care to provide and therefore they're overturned. So prior authorizations may work in terms of decreasing the amount of more expensive care and studies and medications, but it's not clear to me that they meet the standard of care that most physicians would like to give. Brull: You read my mind in terms of our next question. You have written about the practice of Medicare Advantage companies using AI to deny claims. I wonder if we could go into that a little bit more deeply. [Centers for Medicare & Medicaid Services] recently said it's going to experiment with AI for this same use, but for its traditional fee-for-service Medicare members, starting next year. I wonder if you could talk a little bit more about that. Fegan: Traditional Medicare uses prior authorization, but as I pointed out, much less often than Medicare Advantage. As a result, when traditional Medicare denies a prior authorization, it's not overturned on appeal the majority of the time. It would seem that it's been a more appropriate use of the prior authorization. Traditional Medicare continues to use prior authorizations, but in a more judicious manner. I have concerns about the large number of prior authorizations, because for certain populations, that prior authorization is difficult for patients to navigate. Sometimes patients are missing out on things that we would think to be appropriate care. I have concerns about AI. I think there's a place for it, but we have to be careful in terms of the data we put in to arm the AI. And there should always be a backup in which experts who have experience in that particular field can have a say if they disagree with what would be in an algorithm.
Miami Herald
23-06-2025
- Business
- Miami Herald
Trump Administration Says Health Insurance Move Will Save $12 Billion
The Centers for Medicare & Medicaid Services (CMS) has announced it is in the final stages of implementing a new rule that it says will 'lower individual health insurance premiums' by 5 percent on average. CMS said the move is expected to save American taxpayers up to $12 billion in 2026, by 'combating the surge of improper enrollments in the Affordable Care Act (ACA) Exchanges.' Concern has been raised by some that these new measures will push many Americans off their health coverage. 'They will indeed save government money, but only by throwing off the ACA rolls millions of individuals who deserve to be on,' Jonathan Gruber, a professor of economics at Massachusetts Institute of Technology, told Newsweek. Newsweek has contacted CMS via email for comment. According to a CMS release, the new rules are being brought in to tackle 'waste, fraud and abuse' in health insurance markets-an issue that is at the forefront of the Trump administration's policies. A Government Accountability Office (GAO) report from 2024 found that $100 billion was discovered in 'improper payments' in 2023 across the Medicare and Medicaid programs. While wasteful spending in health insurance markets has been targeted by the administration to lower the tax burden for Americans, critics are concerned that sweeping cuts and changes will only push many off health coverage, subsequently driving up costs in the long-term. The new regulation, known as the 2025 Marketplace Integrity and Affordability Final Rule, will target 'improper enrollments' in the Affordable Care Act (ACA) Exchanges via a number of measures. It would repeal the monthly special enrollment period (SEP) for individuals with household incomes at or below 150 percent of the federal poverty level, which CMS called was a kind of loophole for unauthorized enrollments. The policy has been 'used by some agents and brokers to improperly enroll ineligible consumers and perform unauthorized plan switching to gain commissions,' CMS said. Income verification will now be required for most new and auto-renewed enrollments receiving premium subsidies to 'ensure people qualify for the premium subsidies they receive,' CMS added. There will also be additional eligibility requirements for the majority of enrollments through SEPs, in order to close 'loopholes that allowed people to wait to enroll until they needed care,' CMS said. In addition, the rule will reduce advanced payments of the premium tax credit (APTC) by $5 a month for auto-renewed plans without eligibility verification. Most of these policy changes are temporary and will expire after the 2026 plan year-they are simply being used as measures to 'immediately tamp down on improper enrollments and the improper flow of federal funds,' according to CMS. Experts have warned about the impact these measures could have on Americans, with Timothy S. Jost, a professor of law at Washington and Lee University telling Newsweek, 'as many as 1.8 million people could lose ACA coverage.' 'This is an addition to the 4.2 million who will lose coverage because the Congress is not extending the enhanced premium tax credits that were adopted during the Biden administration,' he added. Additional actions being made by CMS in regard to ACA Exchanges include a move to ensure federal ACA subsidies will no longer be available 'to help cover the cost of specified sex-trait modification procedures to align an individual's physical appearance or body with an asserted identity that differs from the individual's sex.' Jonathan Gruber, a professor of economics at Massachusetts Institute of Technology, told Newsweek: 'This is classic doublespeak. These actions will throw millions of people off the ACA rolls by setting up arbitrary administrative barriers that make it hard to enroll.' He added: 'There is undoubtably fraud in ACA exchange enrollment. But this is a blunt solution that will remove many deserving enrollees for every undeserving enrollee and lead to hardship for millions.' Timothy S. Jost, a professor of law at Washington and Lee University, told Newsweek: 'The rules that have just been published will dramatically reduce enrollment in the health insurance exchanges by creating barriers to enrollment leaving many people uninsured. The rules are likely to increase premiums rather than reduce them because the added bureaucratic barriers to enrollment will discourage healthy individuals from enrolling and those covered will be much sicker and more costly. To the extent that rules do reduce premiums for some, it will be primarily because the policies they will be buying will be of lower value, with higher deductibles and co-payments and because the premium tax credits they receive will be reduced.' He added: 'The rule may reduce government expenditures, but simply because it reduces the number of Americans covered and the value of their coverage. There has been some fraud by brokers in the federal marketplace but this was already being addressed by excluding fraudulent brokers.' Robert F. Kennedy Jr., U.S. Health and Human Services Secretary, said: 'We are strengthening health insurance markets for American families and protecting taxpayer dollars from waste, fraud, and abuse. With this rule, we're lowering marketplace premiums, expanding coverage for families, and ensuring that illegal aliens do not receive taxpayer-funded health insurance.' Dr. Mehmet Oz, CMS Administrator, said: 'CMS is restoring integrity to ACA Exchanges by cracking down on fraud, protecting American taxpayer dollars, and ensuring coverage is there for those who truly need it. This is about putting patients first, stopping exploitation of the system, and realigning the program with the values of personal responsibility and fiscal discipline.' The finalized policies will apply to plan years 2025 and 2026, after which they are set to expire. Related Articles Aflac Cyber Breach May Expose Customer Health Data, Social Security NumbersMedicare Update: Lawmakers Introduce Bill to Expand Health Care ProgramNew Yorkers Warned of 38 Percent Spike in Health InsuranceMap Shows States Where People Are Being Removed From Health Care Plan 2025 NEWSWEEK DIGITAL LLC.
Newsweek
23-06-2025
- Health
- Newsweek
Trump Administration Says Health Insurance Move Will Save $12 Billion
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. The Centers for Medicare & Medicaid Services (CMS) has announced it is in the final stages of implementing a new rule that it says will "lower individual health insurance premiums" by 5 percent on average. CMS said the move is expected to save American taxpayers up to $12 billion in 2026, by "combating the surge of improper enrollments in the Affordable Care Act (ACA) Exchanges." Concern has been raised by some that these new measures will push many Americans off their health coverage. "They will indeed save government money, but only by throwing off the ACA rolls millions of individuals who deserve to be on," Jonathan Gruber, a professor of economics at Massachusetts Institute of Technology, told Newsweek. Newsweek has contacted CMS via email for comment. Why It Matters According to a CMS release, the new rules are being brought in to tackle "waste, fraud and abuse" in health insurance markets—an issue that is at the forefront of the Trump administration's policies. A Government Accountability Office (GAO) report from 2024 found that $100 billion was discovered in "improper payments" in 2023 across the Medicare and Medicaid programs. While wasteful spending in health insurance markets has been targeted by the administration to lower the tax burden for Americans, critics are concerned that sweeping cuts and changes will only push many off health coverage, subsequently driving up costs in the long-term. File photo: a Department of Health and Human Services form proposed for use to apply for low-cost insurance from Medicaid or the Children's Health Insurance Program. File photo: a Department of Health and Human Services form proposed for use to apply for low-cost insurance from Medicaid or the Children's Health Insurance Program. J. David Ake/AP What To Know The new regulation, known as the 2025 Marketplace Integrity and Affordability Final Rule, will target "improper enrollments" in the Affordable Care Act (ACA) Exchanges via a number of measures. It would repeal the monthly special enrollment period (SEP) for individuals with household incomes at or below 150 percent of the federal poverty level, which CMS called was a kind of loophole for unauthorized enrollments. The policy has been "used by some agents and brokers to improperly enroll ineligible consumers and perform unauthorized plan switching to gain commissions," CMS said. Income verification will now be required for most new and auto-renewed enrollments receiving premium subsidies to "ensure people qualify for the premium subsidies they receive," CMS added. There will also be additional eligibility requirements for the majority of enrollments through SEPs, in order to close "loopholes that allowed people to wait to enroll until they needed care," CMS said. In addition, the rule will reduce advanced payments of the premium tax credit (APTC) by $5 a month for auto-renewed plans without eligibility verification. Most of these policy changes are temporary and will expire after the 2026 plan year—they are simply being used as measures to "immediately tamp down on improper enrollments and the improper flow of federal funds," according to CMS. Experts have warned about the impact these measures could have on Americans, with Timothy S. Jost, a professor of law at Washington and Lee University telling Newsweek, "as many as 1.8 million people could lose ACA coverage." "This is an addition to the 4.2 million who will lose coverage because the Congress is not extending the enhanced premium tax credits that were adopted during the Biden administration," he added. Additional actions being made by CMS in regard to ACA Exchanges include a move to ensure federal ACA subsidies will no longer be available "to help cover the cost of specified sex-trait modification procedures to align an individual's physical appearance or body with an asserted identity that differs from the individual's sex." What People Are Saying Jonathan Gruber, a professor of economics at Massachusetts Institute of Technology, told Newsweek: "This is classic doublespeak. These actions will throw millions of people off the ACA rolls by setting up arbitrary administrative barriers that make it hard to enroll." He added: "There is undoubtably fraud in ACA exchange enrollment. But this is a blunt solution that will remove many deserving enrollees for every undeserving enrollee and lead to hardship for millions." Timothy S. Jost, a professor of law at Washington and Lee University, told Newsweek: "The rules that have just been published will dramatically reduce enrollment in the health insurance exchanges by creating barriers to enrollment leaving many people uninsured. The rules are likely to increase premiums rather than reduce them because the added bureaucratic barriers to enrollment will discourage healthy individuals from enrolling and those covered will be much sicker and more costly. To the extent that rules do reduce premiums for some, it will be primarily because the policies they will be buying will be of lower value, with higher deductibles and co-payments and because the premium tax credits they receive will be reduced." He added: "The rule may reduce government expenditures, but simply because it reduces the number of Americans covered and the value of their coverage. There has been some fraud by brokers in the federal marketplace but this was already being addressed by excluding fraudulent brokers." Robert F. Kennedy Jr., U.S. Health and Human Services Secretary, said: "We are strengthening health insurance markets for American families and protecting taxpayer dollars from waste, fraud, and abuse. With this rule, we're lowering marketplace premiums, expanding coverage for families, and ensuring that illegal aliens do not receive taxpayer-funded health insurance." Dr. Mehmet Oz, CMS Administrator, said: "CMS is restoring integrity to ACA Exchanges by cracking down on fraud, protecting American taxpayer dollars, and ensuring coverage is there for those who truly need it. This is about putting patients first, stopping exploitation of the system, and realigning the program with the values of personal responsibility and fiscal discipline." What Happens Next The finalized policies will apply to plan years 2025 and 2026, after which they are set to expire.
Boston Globe
20-05-2025
- Health
- Boston Globe
Congress' budget aims to target Medicaid fraud. In Massachusetts, the reality is more complicated.
Locally, the cost of MassHealth, the state's Medicaid administrator, grew almost 50 percent in inflation adjusted dollars from 2014 to 2023, according to the 'The growth that we've seen, that line item year over year, that has to flatten,' said State Representative Marc Lombardo, a Billerica Republican. Related : Advertisement The proposal passed Sunday by the House Budget Committee would make it more difficult for people to apply for Medicaid, such as by requiring some beneficiaries to be employed and requiring the state to more frequently confirm MassHealth members' eligibility. The proposal could cut the national deficit by $625 billion over 10 years, according to a by 2034, according to the CBO. Advertisement It's a myth that there are hordes of people fraudulently receiving Medicaid benefits, experts said. 'These are right-wing rhetorical covers for kicking people off Medicaid,' said Jonathan Gruber, an MIT economics professor who specializes in health care. Many of those who could end up uninsured are people who are eligible for Medicaid but would struggle to overcome barriers, such as additional paperwork and record keeping, which the Congressional proposal would likely create, he said. MassHealth officials offered a 'high estimate' that the budget proposal could make Medicaid inaccessible to hundreds of thousands and could cost the state $1 billion. More people participate in MassHealth than they did a decade ago, but the increasing cost of the program is also attributable to the increasing cost of health care and because MassHealth recipients tend to have more serious health needs. At the heart of Congressional Republicans' budget priorities are trillions in The Centers for Medicaid & Medicare Services reported about 5 percent of Medicaid payments nationally, about $31 billion, were About three-fourths of those improper payments are attributable to paperwork or record-keeping errors, not intentional fraud, said Timothy Hill, senior vice president for Health at the American Institutes for Research, a nonprofit that works with providers to improve health care delivery, in a recent discussion about Medicaid fraud and abuse hosted by the health policy analysis organization KFF. 'It doesn't mean a service wasn't provided, it doesn't mean somebody didn't get care,' Hill said. 'What it does mean is that the rules that the agency established for getting payment weren't followed. All those errors could be corrected.' Advertisement When it comes to spotting true fraud, Massachusetts has a complex, overlapping screening process that involves the Office of the State Auditor, the Office of the Inspector General, the Attorney General's Office, the federal government, and MassHealth itself. They run algorithms that spot questionable billing patterns and assign state investigators to pore over records and interview MassHealth recipients, doctors, and care providers. What they find accounts for far less than one percent of the state's $20 billion MassHealth budget. Gina Cash, a lawyer who runs the state auditor's Bureau of Special Investigations, described the process her team uses to investigate fraud. Their focus is usually on individuals improperly receiving benefits, and the work starts with hundreds of tips, reports of people whose spending habits have raised questions about whether they are eligible for the MassHealth benefits they receive. About half of those warrant investigations, including scrutiny of people's circumstances and medical conditions. Her office identified close to Cash received public assistance to help pay for child care when she was a young mother just out of law school and has empathy for those who need such services. Related : 'The solution is not to cut, it's to continue to make oversight reforms,' she said. Experts noted fraudulent billing from providers, not individuals seeking benefits dishonestly, accounts for the vast majority of Medicaid fraud. Such cases can be prosecuted by the state Attorney General's Office Medicaid fraud unit. One recent case includes indictments against a Advertisement Massachusetts reported 13 Medicaid fraud convictions and 21 settlements in fiscal year 2024, according to the U.S. Department of Health and Human Services The state Office of the Inspector General focuses on specific aspects of the health insurance system, primarily looking for improper practices from providers. In a review of MassHealth services for children with autism from 2022 and 2023, the inspector general identified more than $17 million in 'We put a decent web together with the oversight agencies in the Commonwealth,' said Jeff Shapiro, the state's inspector general. Health policy experts noted that fraud has a specific definition: intentional deception to obtain an undeserved benefit. Waste and abuse are more subjective. Waste can involve a provider taking advantage of billing rules, but it's harder to identify. What may look like a glut of unneeded tests, for example, could turn out to be warranted after a deeper investigation into a person's medical needs. What qualifies as abuse can also be a matter of policy preferences. Almost all states use revenue from taxes on health care providers to support Medicaid expenses, and in the process boost their federal reimbursements. Some federal legislators say it's a way to Advertisement Massachusetts is expected to raise $2.3 billion through these taxes in fiscal year 2025, according to the Gruber, the MIT economist, said he generally doesn't like loopholes, but states wouldn't be able to afford coverage for poorer populations without taking advantage of this one. 'They are dramatically cutting the ability of states to take advantage to help Medicaid pay for underfunded programs,' he said. He is infuriated, he said, about the hypocrisy of public officials who are outraged by the idea of taxpayer money wasted through Medicaid. He contrasted the rhetoric around Medicaid fraud with the decision to cut staff at the 'Catching one or two rich tax cheats would raise so much more money than we can save with these provisions,' he said. Jason Laughlin can be reached at
