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Obamacare doesn’t help America’s sickest and poorest.

December 13, 2013

As stated repeatedly and loudly by its proponents, the  goal of the ACA  was to provide healthcare to America’s sickest and poorest. In reality it does not attain that goal either in practice or by design.

To fund Obamacare, the law mandates cuts of over $500 billion from Medicare and Medicaid. Some estimates say that figure is as high as $716 billion. This includes cuts to two of what are arguably the least expensive forms of healthcare for the sickest and poorest, home health and hospice care.

Many chronically ill and disabled Americans depend on some type of home health care to survive. The terminally ill, i.e. the people that use the most intensive comfort care services during the last few months of life depend largely on palliative or hospice care to make their final days as comfortable as possible. It is a given that you will never be any sicker or poorer than when you are dealing with a chronic debilitating disease, disability, or terminal illness.

People with debilitating chronic diseases, the terminally ill and  low income senior citizens will see cuts in provider payments averaging 14% over the next four budget years. Beginning in 2014, the Centers for Medicare and Medicaid Services, or CMS plans to cut payments to providers by the maximum allowable by law, or 3.5% annually. Their justification is that by reducing the payments to providers they are making healthcare more affordable. Most of the Obamacare enrollees to date are being shoved onto Medicaid, the same Medicaid that is seeing its budget shrinking every year. To quote John Boehner, “ARE YOU KIDDING ME!?”

The alternative to people being cared for at home by family members with the assistance of home health workers is to place them in long term care facilities, i.e. nursing homes.

Home health and hospice care is paid to the providers through Medicare and Medicaid. It is  based on a convoluted daily rate calculation that derives from data based on hospital charges, and is adjusted up or down based on averages that are determined according to what CMS says should be the average cost of care for that area, normally at the county level, but sometimes adjusted for higher or lower cost pockets at the city level.

The 2013 Medicare “base rate” for hospice care (which is palliative or comfort care only for the terminally ill) was proposed at about $153.00 per day, and that rate is adjusted up or down according to a formula. That can vary the actual provider rate substantially, cutting it as low as $139.00 per day.  Interestingly, hospice care does not allow for separate billing to CMS for drug costs, medical equipment, social services or physical therapy and other patient-based services, nor does it allow the entire balance of  under-reimbursed costs to be billed to the patient. Hospices in general operate on a 4% profit margin, and under the current payment structure, are expected to be operating at an 11% loss in four years. Even using the highest proposed rate, caring for a terminally ill patient at home currently totals out at $4590 monthly.

By contrast, the average nursing home that provides 24-hour skilled nursing care is $230/day or  roughly $6900/month according to the Genworth 2013 cost of care report. Nursing homes most assuredly CAN bill the patient for costs over and above government reimbursement. Money Magazine published an article citing the Genworth report, concluding that home-based care is less expensive. Why then do we see the incongruity between “providing affordable healthcare to the sickest and poorest” and cutting back that care under existing government programs?

There are two stark points highlighted by this incongruity. One is that if the government pays for your healthcare, the government will decide how much of it gets paid for, and if you can’t pick up the difference you are just SOL. In effect that means the poorest and the sickest will simply have to go ahead and die, sooner rather than later. Medicare already places a cap of six months or approximately $29,000 on hospice payments for each individual. The ACA doesn’t even address terminal care payments by traditional insurers in its ten mandated coverages.

The second point is that the whole ACA law was either intentionally misrepresented, or was so poorly thought out that it can’t possibly deliver on its promise to provide adequate care for the sickest and poorest among us. It doesn’t seem to be about healthcare at all. It is about money and power, and  the manipulation of those two things to the government’s advantage.

Another interesting area is the incongruity between raising the minimum wage and cutting healthcare costs. Many home health services are typically provided at the patient level by relatively poorly paid home health aides, many of whom start at or very near minimum wage. If you cut provider reimbursement, but raise the aide’s wages to $9, $10 or $15 dollars an hour, how long will their employers be in business? No employer means no job. How does that help the sickest and poorest?

Big government simply doesn’t do this sort of big social program well. Every “good fix” depends on taking more from something or someone. The government mandated that everyone should own a home, decided that they would make that possible by coercing lenders to finance the homes through a series of ill-thought out subsidies and we all know how that turned out. The government decided that we shouldn’t own old but reliable and paid-for cars, so it subsidized new car purchases, and the price of used cars tripled, often putting them out of reach for the poorest would-be car owners. Healthcare workers, particularly the aides that are the literal backbone of home-based healthcare, now often can’t afford to buy a dependable car, although their job requires them to provide their own transportation to the patient’s home.

The problem with all of these programs is that they rely on a bait-and-switch tactic to make them work, and then the bait, which is the subsidy and in the case of the ACA, the promise that if you liked your previous healthcare insurance situation, you could keep it, goes away.

Does anyone see a pattern here?

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