AAFP Assails House-passed Budget Proposal as Threatening Access to Care

Measure Would Shift Costs Onto Patients, Physicians, Says Academy President

April 26, 2011 01:05 pm News Staff

The AAFP has strongly criticized a fiscal year 2012 budget proposal passed by the U.S. House that -- in an attempt to hold the line on the nation's burgeoning health care expenditures -- would fundamentally change the Medicare and Medicaid programs and threaten access to care for older Americans, disabled individuals and low-income working families.

"The U.S. House of Representatives' proposed 2012 budget is part of the needed discussion about controlling federal spending for Medicare and Medicaid," said AAFP President Roland Goertz, M.D., M.B.A., of Waco, Texas, in a prepared statement. "However, this proposal neither controls systemwide costs nor improves care for elderly, disabled and low-income working families who are our patients."

The budget proposal, H.Con.Res. 34(budget.house.gov), would convert Medicare into a voucher-style premium support program, eventually requiring Medicare beneficiaries to purchase health insurance on the open market. At the same time, the proposal would turn Medicaid into a block grant program.

According to Goertz, the proposal threatens to "undermine access to care for our most vulnerable citizens and exacerbate the already serious problems -- such as fragmentation and duplication of services or skyrocketing health care insurance premiums -- in our health care system."

In proposing a Medicare premium support plan that eliminates guaranteed benefits and substitutes vouchers to subsidize private insurance for beneficiaries, the measure follows in the footsteps of Medicare Advantage, which, Goertz pointed out, actually increased costs by 12 percent "because private insurance companies declined to offer coverage without additional government support."

Goertz stressed that the private insurance industry has no track record of controlling costs, enhancing patient or provider satisfaction, or improving the quality of public programs channeled through insurance vendors.

"Moving millions of elderly and disabled Americans to the private insurance market requires yet-to-be implemented insurance reforms -- patient protection provisions such as prohibiting annual or lifetime benefit limits or requiring insurers to cover pre-existing conditions -- that are currently opposed by many in Congress," Goertz said.

Without such reforms, Medicare premium support would push elderly and disabled patients into a market that locks them out by price and denies them coverage for pre-existing conditions, while capping the value of covered benefits.

"This premium support plan also creates an adverse selection in which healthy Medicare patients will flee to the low-cost, high deductible private plans, leaving the sick and disabled in Medicare, driving up premiums and reducing services," Goertz noted.

In addressing Medicaid block grants, Goertz acknowledged that block grants give states more flexibility. But a fixed federal contribution to state Medicaid programs puts the financial onus on states to keep pace with inflation, pay unanticipated demand resulting from economic downturns while covering unexpected costs resulting from events such as epidemics or large natural disasters.

Medicaid, as currently designed, gives states the financial flexibility to weather economic downturns that generate a greater demand for services when the financial resources of a state are most strained, said Goertz.

"Required to balance their budgets, states likely will cite decreased federal support and use their new Medicaid flexibility to impose higher out-of-pocket costs on the poor, limit covered services, restrict eligibility and impose waiting lists," Goertz said.

Moreover, he added, states could slash payments to physicians and other health care providers, further compromising access to health care services under Medicaid.

"In short, the number of uninsured, low-income working families and elderly will increase," said Goertz.

Overall, limiting financial support for Medicare and Medicaid will not reduce spiraling health care costs, Goertz warned, but instead will shift them to patients, physicians and other providers.

"Congress should continue to demand fundamental changes in the way we deliver health care services -- which must include rebalancing our system on primary care medical care, building the primary care physician workforce, implementing the patient-centered medical home, improving quality and paying for outcomes rather than the number of procedures," he said.

"Without these, changing from the current federal Medicare program to subsidized private coverage or from consistent national standards of care in the current Medicaid programs to capped annual block grants without coverage or eligibility minimums will only shift the costs from the federal budget to states, providers and patients."