Toss Gran in an HMO
A fresh Obamacare outrage

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  • New York hopes to move most of its 700,000 “duals” into a capitated model — that is, HMO-style care #Medicare #Medicaid

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  • ObamaCare's new scheme uproots the elderly poor who get treated under #Medicare herding many into state-run #Medicaid plans

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  • ObamaCare is designed to serve the existing health-care system, not than the patient @ScottGottliebMD

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If you like your doctor, you can keep her — unless you’re poor or disabled.

 The latest installment of ObamaCare is a scheme that’s uprooting the elderly poor and disabled who get care under Medicare and herding many into state-run Medicaid plans.

 All of these folks are dually eligible for both Medicare and Medicaid; they are low-income people who are elderly or have disabilities. But it’s hard to see how they’ll be better off in bare-bones, and sometimes poorly-run state Medicaid plans than by getting access to Medicare options they were entitled to before ObamaCare.


 The crux of the new policy is a “demonstration” program under ObamaCare. Starting in January in some states, it will turn over management of these “dual eligibles,” along with the money that the federal government was spending on their medical care."ObamaCare is treating the poor and disabled as one big group in shuttling them into state Medicaid plans." -- Scott Gottlieb

States that want to move their poor and disabled Medicare recipients into state plans must submit their proposals by June. Some are jumping at the chance to capture federal Medicare dollars for their Medicaid programs.

Some states have already said they plan to automatically place these folks in existing Medicaid plans — which often aren’t equipped to serve an older, sicker group of patients. That will mean big savings for the state and worse care for the vulnerable.

 New York hopes to move most of its 700,000 “duals” into a capitated managed-care model — that is, HMO-style care. It aims to enroll the bulk of the elderly poor and disabled by 2015. California plans to move up to 1.1 million duals into its state-run Medicaid managed-care system.

Real money is shifting around here. Wall Street estimates the entire “dual eligible” market at $350 billion a year. No surprise, Wall Street is bidding up the stocks of Medicaid HMOs on the expectation that many of these patients will end up in such plans.

Care is likely to suffer. Many of these elderly poor also suffer from a lot of chronic ailments like diabetes and lung disease. Although these 9 million “duals” comprise only 18 percent of people on Medicare, they account for about a third of all Medicare costs. The idea is that the states will be better able to more closely manage their costly health-care needs.

Strange: ObamaCare is treating the poor and disabled as one big group in shuttling them into state Medicaid plans. But these people have diverse medical problems, and have been most successfully served by Medicare programs that tailored services to their specific needs.

Indeed, many dualswouldhave been eligible for better-run, better-financed Medicare Advantage plans that already exist in the Medicare program, or for Medicare “Special Needs” plans designed to serve these vulnerable patients. Now they’ll be funneled into state Medicaid HMOs instead.

The federal Medicare agency won’t reveal how much it’s paying states to care for each of these “dually eligible” seniors — the ObamaCare law specifically empowers it to keep the data secret. Nor do we know how much of that federal money states will get to keep if they do lower the cost of caring for these patients.

But the real goal seems to be propping up state Medicaid programs.

Medicaid, after all, is essential to the underpinnings of ObamaCare. Up to 20 million of the “newly insured” under Obamacare are being put into the Medicaid program, and Medicaid plans will form the scaffold for the insurance offered in the ObamaCare exchanges.

The Medicare actuary now estimates that ObamaCare will raise the number of people on Medicaid 40 percent by 2016 — to more than 80 million Americans. That new estimate shows a 50 percent greater rise in Medicaid enrollment than what the Congressional Budget Office projected when President Obama signed the bill two years ago.

Yet Medicaid is a broken program. It pays providers at such low rates that many patients can’t get access to timely care. The “duals” gambit looks like an effort to shore up Medicaid by subsidizing it with Medicare dollars.

It’s another case of how ObamaCare is designed to serve the existing health-care system, rather than transforming it to meet the needs of individual patients.

Scott Gottlieb is a resident fellow at AEI.

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About the Author


  • Scott Gottlieb, M.D., a practicing physician, has served in various capacities at the Food and Drug Administration, including senior adviser for medical technology; director of medical policy development; and, most recently, deputy commissioner for medical and scientific affairs. Dr. Gottlieb has also served as a senior policy adviser at the Centers for Medicare & Medicaid Services. 

    Click here to read Scott’s Medical Innovation blog.

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