A new study released today by the Lewin Group, one of the most well-respected health care consultancies in Washington, gives new estimates on “The Cost and Coverage Impacts of a Public Plan” like the one being considered by President Obama and the congressional leadership. The Lewin Group says that “If the public plan is opened to all employers…at Medicare payment levels we estimate that about 131.2 million people would enroll in the public plan. The number of people with private health insurance would decline by 119.1 million people. This would be a two-thirds reduction in the number of people with private coverage (currently 170 million people).”
The study also examined what the proposed plan might do to provider reimbursement rates. Lewin says that if current Medicare payment rates were to be used for a public plan option, physicians would see their net income drop by $33 billion dollars, and hospitals would see their revenue fall by $36 billion.
Last Wednesday, the New York Times published a story reporting that Doctors Are Opting Out of Medicare, in part because of low reimbursement rates:
Many people, just as they become eligible for Medicare, discover that the insurance rug has been pulled out from under them. Some doctors — often internists but also gastroenterologists, gynecologists, psychiatrists and other specialists — are no longer accepting Medicare, either because they have opted out of the insurance system or they are not accepting new patients with Medicare coverage. The doctors’ reasons: reimbursement rates are too low and paperwork too much of a hassle.
The piece ended up being ranked as high as third on the list of “most-emailed” stories on the New York Times’ Web site. If the soon-to-be-retired are concerned that their doctors will not accept Medicare, the entire nation should be cautious about the impact of a new public plan based on a Medicare model. If two-thirds of those currently covered under private insurance were to instead be insured under a new public plan, we would find ourselves well on our way toward a single-payer system, which, as Heritage fellow Robert Book recently warned, would have devastating effects on access to, and quality of, care:
The establishment of a “single payer” health care system would inevitably result in lower payments for physician and other health care providers. The immediate effect of having a single (”stingy”) payer would be lower incomes for physicians and a reduction in the supply of active physicians, thereby impairing access to health care for all patients. However, the result of “single/stingy payer” health care will not only be lower incomes for physicians now but reduced access and lower quality health care for future generations as well.