The Medicare program is the largest purchaser of health care in the United States, spending more than $700 billion annually. As of February 2021, the Congressional Budget Office predicts that the Hospital Insurance (HI) Trust Fund (one of two funds that pay for parts of the Medicare program) will be insolvent by 2026—meaning it will no longer have sufficient resources to pay for the entire cost of beneficiary health care services. While the HI Trust Fund has long faced a likely shortfall, this is only the second time in its existence that insolvency has been predicted within five years. Additionally, COVID-19 recovery and rebuilding efforts may present opportunities for Congress to reduce Medicare spending while offering more equitable access to services for beneficiaries.
This briefing provided an overview of the Medicare Trust Funds, the nuances of solvency, and the consequences of not resolving funding shortfalls. Panelists explored short- and long-term policy options to address solvency and offer equitable access, as well as the potential impacts on providers, plans, and most importantly, Medicare beneficiaries.
- Jonathan Blum, MPP, Vice President, Federal Policy and Managing Director, Medicare, Health Management Associates
- Adaeze Enekwechi, Ph.D., MPP, Research Associate Professor of Health Policy and Management at the Milken Institute School of Public Health at the George Washington University; Board Member, Alliance for Health Policy
- Cori Uccello, MAAA, FSA, MPP, Senior Health Fellow, American Academy of Actuaries
- Gretchen Jacobson, Ph.D., Vice President, Medicare, The Commonwealth Fund (moderator)
This briefing was made possible with support from the Commonwealth Fund.
(listed chronologically, beginning with the most recent)
“Options for Extending Medicare’s Trust Fund: The Commonwealth Fund Solvency Series.” The Commonwealth Fund. January 28, 2021. Available at http://allh.us/Mv3F.
“The Coming Crisis for the Medicare Trust Fund.” Muhlestein, D. Health Affairs Blog. December 15, 2020. Available at http://allh.us/8qgf.
“The Uncertain Future of the Medicare Trust Fund.” Frank, R. The Commonwealth Fund. October 13, 2020. Available at http://allh.us/C7Ax.
“Covid-19 is Accelerating the Medicare Trust Fund’s Dive Toward Insolvency.” Jacobson, G. STAT. September 3, 2020. Available at http://allh.us/u8vj.
“Medicare: Insolvency Projections.” Davis, P. Congressional Research Service. May 29, 2020. Available at http://allh.us/YKgr.
“Medicare Is Not “Bankrupt”.” Van De Water, P. Center on Budget and Policy Priorities. May 1, 2019. Available at http://allh.us/KY9D.
“Three Ways to Lower Health Care Costs.” Committee for a Responsible Federal Budget. February 23, 2021. Available at http://allh.us/tAvV.
“Racial and Ethnic Health Inequities and Medicare.” Ochieng, N., Cubanski, J., Neuman, T., et al. Kaiser Family Foundation. February 16, 2021. Available at http://allh.us/uq6t.
“The Budget and Economic Outlook: 2021 to 2031.” Congressional Budget Office. February 2021. Available at http://allh.us/q6uM.
“Medicare Financial Outlook: What Do Trust Fund Solvency Projections Mean?” Komisar, H. AARP. May 7, 2020. Available at http://allh.us/7kNF.
“COVID-19 Pandemic Adds to the Urgency of Medicare Reform.” Moffit, R. The Heritage Foundation. May 1, 2020. Available at http://allh.us/3juJ.
“Will COVID-19 Bankrupt Medicare?” Antos, J., Capretta, J. American Enterprise Institute. April 22, 2020. Available at http://allh.us/ReV9.
“Medicare’s Financial Condition: Beyond Actuarial Balance.” American Academy of Actuaries. April 2020. Available at http://allh.us/9qAb.
Jonathan Blum, MPP
Health Management Associates, Federal Policy and Managing Director, Vice President, Medicare
Adaeze Enekwechi, Ph.D., MPP
Milken Institute School of Public Health at the George Washington University, Research Associate Professor of Health Policy and Management
Gretchen Jacobson, Ph.D.
The Commonwealth Fund, Vice President, Medicare
Cori Uccello, MAAA, FSA, MPP
American Academy of Actuaries, Senior Health Fellow
Experts and Analysts
Mehlman Castagnetti Rosen & Thomas, Principal
Robert Berenson, M.D.
Urban Institute, Institute Fellow
Juliette Cubanski, Ph.D., MPP, MPH
Kaiser Family Foundation, Associate Director, Program on Medicare Policy
Neeraj Sood, Ph.D.
USC Price School of Public Policy, Vice Dean of Research
Joseph Antos, Ph.D., M.A.
American Enterprise Institute, Wilson H. Taylor Scholar in Health Care and Retirement Policy
Amy Bassano, M.A.
Center for Medicare and Medicaid Innovation, Deputy Director
James E. Matthews, Ph.D.
Medicare Payment Advisory Commission (MedPAC), Executive Director
Cheri Rice, MPP
Centers for Medicare and Medicaid Services, Deputy Director, Center for Medicare
Eric De Jonge, M.D.
Capital Caring Health, Chief of Geriatrics
Harriet Komisar, Ph.D.
AARP, Public Policy Institute, Senior Strategy Policy Advisor
Judith Stein, J.D.
Center for Medicare Advocacy, Executive Director
(This is an unedited transcript. For accurate quotes and presentations, please refer to the full-event video.)
Hello, everyone. Thank you for joining today’s webinar, Medicare Solvency, Projections, and Potential Solutions. I’m Kathryn Martucci, director of policy and programs at the Alliance for Health Policy.
For those of you who are not familiar with the Alliance, welcome, we are a non partisan resource for the policy community dedicated to advancing knowledge and understanding of health policy issues.
And the Alliance for Health Policy gratefully acknowledges the Commonwealth Fund for supporting today’s webinar.
And I have some quick housekeeping items, and then I’ll introduce our moderator. So, I want to remind everyone that you can join today’s conversation on Twitter, using the hash tag #AllHealthLive. And join our community at all health policy, as well as on Facebook and LinkedIn.
And we want you to be active participants in today’s discussion. So please, be getting your questions ready, and you should see a dashboard on the right side of your web browser, and it has a speech bubble icon with a question mark.
And you can use that to submit questions you have for the panelists at any time. We’ll be collecting these and addressing them throughout the broadcast.
You can also use the chat to send any technical issues that you may be experiencing.
And then, finally, please be sure to check out our website, all health policy dot org, where you can find background materials, including a resource list, and an expert list, and then a recording of today’s webinar. And the slide deck will be made available on that website soon.
And now, I am so pleased to introduce doctor Gretchen Jacobson to moderate today’s discussion.
She’s the Vice President of the Medicare Program at the Commonwealth Fund.
Prior to joining the signed, Dr. Jacobson was at the Kaiser Family Foundation, where she served as Associate Director of the Organization’s Program on Medicare Policy. And she was also an analyst in healthcare financing at the Congressional Research Service and holds a doctorate in health economics from Johns Hopkins Bloomberg School of Public Health.
So we can think of no one better to leave this conversation and doctor Jacobs. And I’m very pleased to be leading this discussion in your expert hands. So thank you for joining us. The discussion is yours.
Thank you, Kathryn. As Kathryn said, I’m Gretchen Jacobsen and vice-president of Medicare at the Commonwealth Fund.
For those of you who aren’t familiar with the Commonwealth Fund, we’re a private foundation, focused on advancing access to affordable, equitable, and high quality care for all.
As we all know, the Medicare program serves a critical role in our health care system by helping to provide health and financial security to some of the most vulnerable people in our society, but also acting as a strong lever, innovation and a catalyst for change for the broader US health care system.
The Commonwealth Funds Program on Medicare supports research and analysis on the health needs to beneficiaries, models of care delivery, and ways to ensure equity and the care provided.
The last year, we’ve also taken a closer look at how to ensure Medicare remain solvent and able to meet the needs of current and future beneficiaries.
three of us work with highlighted a range of policy options and supported modeling of some of these to understand the implications for beneficiaries and health care providers as well as federal spending.
Just two weeks ago, the Congressional Budget Office really just their updated economic outlook that protected the Medicare Hospital Insurance Trust Fund, vans solvent and 2026 and we will not be able to fully cover the cost of beneficiaries hospital bills.
That’s just five years from now.
Put this into context.
This is the shortest period until protected insolvency 997, 24 years ago.
As you can see on this chart, privacy protections have greatly varied over time.
Different pieces of legislation helping to expand the life of the class.
As we will discuss, a trust fund projections are a function of not only healthcare spending and money flowing out of the fund, but also the economy and the amount of revenue flowing into the fund from payroll tax.
So, today, we have a fantastic panel, are here to talk with us about the solvency of the trust fund and how discussions around solvency can also provide the opportunity to ensure the Medicare Program is meeting beneficiary’s needs.
Our first panelist is Cori Uccello, is an actuary and Senior Health Fellow at the American Academy of Actuaries.
And this role, she promotes the formulation of Sound Health Policy by providing non partisan, technical assistance, federal and state policymakers, and regulators.
She served two terms as commissioner of the Medicare Payment Advisory Commission, or MEDPAC, and was a member of the 2010 and 2011 technical review panel of the Medicare Trustees Report.
Next, I am pleased to introduce Jon Blum, vice president, and Managing Director of Medicare at Health Management Associates, has more than 20 years of senior level experience, working in public and private health care financing organizations, including, of course, CMS.
And, finally, I’m pleased to introduce Dr. Adaeze Enekwechi, a Research Associate, Professor of Health, Policy and management at the Milken Institute School of Public Health.
At George Washington University.
Se most recently served as the President of Impact Policy Research and Implementation Company, and she also serves on the board of the Alliance for Health Policy.
Thank you for talking to us.
Are going to start today hearing from Cori Uccello, turn it over to you.
All right, thank you, Gretchen, and welcome everyone. If I could have the next slide, please, and the next one, so, I’m here today to give some information about the basics of the Medicare Trust Funds and the solvency picture.
So there are actually two Medicare trust funds.
The first is the Hospital Insurance Trust Fund, or the HI Trust Fund.
And that covers inpatient hospital and post acute care under Medicare Part A And it’s financed through payroll taxes.
The other Trust Fund is the supplementary medical insurance or SMA trust fund.
It covers benefits under Part B that’s the physician and outpatient care, as well as the Part D Prescription Drug Program.
The SMA trust fund is financed through beneficiary premiums in general tax revenues.
Now a lot of focus right now is on the HE Trust Fund.
This next slide tells us why I can have the next slide, please.
Come back up. Yep.
So currently and for an hereafter, income, or expenditures under the Trust Fund, exceed the income coming into the trust fund.
Over the next few years.
Sets that have accumulated in the trust fund will be drawn down in order to meet that deficit.
However, after the trust fund is depleted in a few years, there won’t be enough money coming in to pay for all the benefits going out.
Next slide, please.
So, when is that going to happen?
So, recent depletion dates that have been projected from CVO and the Medicare Trustees have ranged from 2024 to 2026.
And the reasons for this, these fluctuations husband uncertainty, about coven nineteen’s effects on spending and payroll taxes.
In the short-term, there were reductions in benefit costs, due to people different care.
However, that’s been rebounded and utilization is returning.
Payroll tax revenue has declined due to the economic downturn.
The bottom line, whether we’re talking about a depletion date of 2024, 2025 or 2026, doesn’t it doesn’t really matter here.
The depletion date is really just right around the corner, whichever that of those states it is.
Next slide, please.
So what happens when the trust footnote?
If you can backup one, what happens when the Trust Fund is depleted?
Well, the 2020 Medicare trustees estimated that when the Trust Fund is depleted in 20 26, revenues coming into the program would cover only 90% of expected expenditures.
And that deficit over the next 75 years would amount to about three quarters of a percent of taxable payroll.
Eliminating that deficit over the next 75 years would require either an immediate, 26% increase in payroll taxes, or an immediate 16% reduction in expenditures, or some combination of the two.
And I just want to highlight here that these are the changes that would be needed if action were taken right now.
If action is delayed, that would require larger increases in payroll taxes or reduction in expenditures.
Now, it might be too heavy of a lift to address the whole 75 year deficit, so if we look at what would be needed over the next 10 years, that cumulative shortfall in the trust fund is about $500 billion.
Next slide, please.
It’s important, though, to think about Medicare’s financial condition beyond just the HI depletion date.
We need to think about this, the spending and the income for the program as a whole.
So, for example, the SME trust fund will remain solvent but only because its financing is reset every year to make sure that the revenues coming in are enough to meet the expenditures going out.
But those increases in semi expenditures over time mean that we’ll need significant increases in beneficiary premiums and general revenue contributions.
Next slide, please.
And we also need to think about Medicare sustainability beyond just solvency and financial challenges.
We also need to to think about whether the program is meeting the needs of the beneficiaries in terms of benefits coverage, what’s the out of pocket costs are for beneficiaries and in terms of racial and ethnic disparities.
So, when some policies should aim to ensure that Medicare beneficiaries have access to high quality healthcare, that’s affordable, both to them and to the nation as a whole.
So, I’ll leave it there and pass it on to Jon.
Great, Thank you for the opportunity, and really want to build of the comments. Cori talked about, we go the next slide, please.
one more slide.
Really want to echo some of the points in this first slide that the court was making, I think the first point is that if Congress decides and will have to decide to address the solvency issues that the dollar size to, these changes are much bigger than, that, didn’t really. Consider. Before, in the past to our estimates, Congress would need 500 to 2, $200 billion during the next 10 years, just through Part A. Policy changes. These dollars are massive. They’re huge and much bigger than that Congress has considered during previous discussion regarding Medicare solvency. This doesn’t even include Part B changes, Part D changes that Congress made, that they choose to consider.
Think, just to built a core’s point, that if the trust fund does go, just go and solve and there are real consequences to how hospitals get paid, how post acute care providers get paid. And Medicare private plans, they get paid to the part a trust fund to as well.
But given these massive changes that are that are needed to address solvency, we also think that it’s very important to take and inquiries points that these changes not only affect the trust funds. But they have direct consequences to, to, to beneficiary benefits, their cost sharing, their premiums, but also to the, to the finances, how health care providers get paid hospitals, post acute care.
Providers, which really kind of causes us to, to think about the need for a more comprehensive Scorecard to really assess different policy choices, depending on their design, Depending on their structure, there, are not only going to affect Part a trust fund balances, but to also affect different providers, different beneficiaries and those who have a greater need, those providers that are more dependent on dollars coming for them.
For the Part a, part a trust fund will have differential impacts, depending on the policy structure and how Congress chooses to to build those policies.
Next slide, please.
So, through the work that we did for the Commonwealth Fund, we have constructed what we’re calling a kind of unified, comprehensive tool to assess Medicare.
Policy changes. The goal here is for us to take a policy that could affect hospitals, that could affect benefits. That could affect how the program really gets financed and to to build measures that not only assess the overall finances are also assess how these policies will shape hospital finances pay, particularly, close attention to, to those hospitals, that are more vulnerable to Medicare policy, change dish, hospitals, rural hospitals, but, also, to assess which beneficiaries And, depending on their, participation, in the program. Whether they’re, in the fee for service program, or belong to, to a private plan, Whether they have high need, low name, Whether they’re high income.
Lower income to really assess their own particular?
Kind of fate through these policy changes that our goal is to take different policies and really, you know, run them through different models to assess those those particular impacts. Depending regarding whether there are providers, beneficiaries. So just, taking one policy, we’re not here to say this is the right policy, but just taking one policy that would change how plans get paid and to change the, the overall structure from the current structure to one where plans get paid based upon their bids. You want to ask three questions, the first, the first question being, how does it change the overall financing to the program?
Just policy, given its current design, would save $470 billion to the next 10 years, but only change the solvency.
Right two years, because this policy would save both both part A dollars and part B dollars, lower part A chain per capita spending by about 1%.
We don’t think this is going to change how, how providers get paid, really, with the assumption being that the plans pay the same amount as the day of traditional fee for service program. But the real impact happens to two, to Medicare beneficiaries.
We think, given this construct, that that fewer plans will choose to, to participate within the program. That will change beneficiaries, spending plans, generally, provide low cost sharing and protection.
Then, the traditional Medicare program, as plans begin to pull out more beneficiaries, will be served by the traditional Medicare, and those that have poor health, and have greater health care need.
We’ll turn to pay more.
The goal here, really, is to kind of illustrate that these changes will have differential impact, particularly those that have large dollar impacts will really begin to affect beneficiaries differently. So, we think it’s very important. one for Congress, Not only to, to fully understand the the dollar impact, but also to understand which beneficiaries which providers really will have the most impact as we can see about these very difficult tradeoffs that that Congress will have to back. So, with that, I’ll stop in the interns.
OK, thank you.
Again, thank the Alliance for Health Policy and for the time for hosting this webinar and for the series that that patient.
My name is Adaeze Enekwechi. Next slide, please, and I want to move into next slide.
So an area of discussion that I think comes up frequently than some of the photos in case that we often hear about in the Medicare program, Cory has said it quite nicely with an explanation: The Medicare Trust Fund, Part A, and Part B and apart. And the fact that insolvency is essentially in policy terms.
Imminent, you know, whether it’s 2024, which isn’t alkylation, due to co vary, according to estimates, or 2020, it feels like.
Given the size of this policy concern, as John nicely laid out, 500 to $600 billion insolvency over the next time, in terms of what the shortfall would be, we’re talking about an issue that requires a policy response. That probably should have started yesterday.
So it’s an opportunity, I think, for us to discuss the broader structural issues that affect the Medicare program, both in terms of spending, and of course, in terms of financing. So that’s what brings us to this topic of health equity.
What is it, and is it relevant in Medicare?
So this is an opportunity to levels that health equity is achieved, when everyone has a fair opportunity to attain their full health potential, and no one suffers from any disadvantage in their opportunity to achieve that goal.
I think it’s fair to say that most of us know that many vulnerable people do not enjoy a fair opportunity at optimal health, And this, of course, is irrespective of what type of health care coverage you have.
So it’s an important points, a level set.
There’s an unfortunate misconception that health disparities are an issue only in Medicaid.
It’s a puzzling, misconception, because we know that opportunities to advance health and improve your health, existing commercial space, it existed in Medicaid. And it certainly exists in Medicare.
So the Kaiser Family Foundation just published a report last week showing some findings that show the extent to which we have an issue in the Medicare program, and therefore an opportunity to improve.
So in order for the Medicare program to design a system that is responsive to beneficiaries needs, the program has to confront the poor health outcomes that are often caused by lifelong effects of racism and structural inequities in the United States.
And that’s what I think is nice about this opportunity to, to have this broader discussion about Medicare in general. Next slide, please.
Thank you. As I mentioned, the insolvency discussion presents us with this.
Oh, back, please presents us with, Yes, and I would say, to have a broader discussion.
And 2020 and covert has show all of us that inequities exist, and access to care and information. And, of course, in outcomes, again, with this public health, emergency, and catastrophe.
Let’s talk about why these are suitable populations, suffer consequences.
Vulnerable populations suffer consequences that I think are even more magnified because of their vulnerability. For example, I think we just saw me life expectancy was no one year Shaved off of the general population is life expectancy.
My video turned off, as I hope people can still hear me, but for African Americans, the loss of years of life expectancy was 2.9 or 2.7 years. For Hispanics, it was 1.9, so again we find that depending on how you define vulnerability to any sort of a calamity and tends to head vulnerable populations much, much harder.
40% of Medicare beneficiaries do not have broadband to access.
So if we are thinking about infrastructure in the Medicare program, which was one of the the main routes to securing any sort of care in 20 20, a good chunk of Medicare beneficiaries were left off of that. that trade, because they didn’t have broadband, they couldn’t participate in videoconferencing, which is still the bulk of Telehealth and Telemedicine today.
So, this discussion requires a major policy effort to incorporate, or to develop both short and long-term policies to strengthen the Medicare program.
In terms of short-term fixes, there are many that we can discuss. A bunch of them are in the, in the blog posts that we, that, I just referenced. But we can think about Congress making up, no policy decision to go all in on site neutral payment policies.
Or to do something about drug prices, to negotiate drug prices, for example, or my favorite, that I just read from Richard Frank and Thomas, McGuire, clawing back some of the wastes law firm and make plans. That they realize in 20 20 there are a lot of things we can do to shore up the card A trust fund. And perhaps even Part B across the program in the near term. But the longer term discussion around what to do about health or the health, the demand for health, among some of the most vulnerable the sickest beneficiaries of folks who have predisposing social and economic conditions that leave them much more vulnerable to embrace and care or the gaps in the system.
That is, that is a conversation we need to start having in the Medicare programs.
Next slide, please.
So, what to do? What is what should Medicare’s role be in advancing health equity?
Let me preface this slide by say that it actually feels overwhelming, especially for people who have not been living in this space, in research for for many years.
When you’re talking about social structural problems that often are not related to health, feels overwhelming to think about how we deal with it in the healthcare space.
And I also think that we should preface this slide by saying that we won’t solve every social problem in healthcare.
Every social sort of breakdown and housing and transportation can’t be addressed entirely in the health care system, And that’s not the point.
But a lot of talk, I think, signals, the right intention, which I have to give the policy community credit for, a talk isn’t necessarily equal to action, And that’s where we need to start. Working on, in the very near future, healthcare has a role to play. Medicare certainly has an opportunity to lead, which leads me to my first point.
Medicare has an opportunity to lead in the discussion around health equity.
We can take the lead and rethinking how we define network adequacy, or populations that have diverse set of needs and structural gaps, in terms of where providers tend to locate.
We can think about how we incentivize physicians and other providers, and value based frameworks that we’re developing and refining right now, So, there are a lot of things we can do, but the issue is, Medicare has an opportunity to take a lead in this space.
The second thing is to incorporate dynamic screening for social factors. The revenue model for this hasn’t been fully sorted in a private sector. So, perhaps, is an opportunity for Medicare, too.
Test and incorporate some screening, dynamic screening for social determinants of health.
Vulnerable people don’t just have one gap.
They tend to have A cockney of challenges. And if you don’t document and measure and account for them, it’s hard to know what you’re supposed to be solving for.
Guess also what you don’t know. So, there’s a great need to incorporate that as we think about payment systems in the Medicare program.
The third point here is to combat, bias and enhance, enhance cultural competence among providers. There’s a big gap between discussions about this and experiences in clinical settings.
Many people of color, irrespective of socio economic status.
So, it could be richer than before, do not feel listened to. They are often dismiss their concerns and not always attended to when they interact with clinical, you know, with, with clinicians, or nickel in a clinical setting.
There’s some high profile examples, I’m sure many of you who’ve read, but it’s important to note that those are not want to ask. These tend to be quite universal among people of color among people who speak English as a second language. And there’s a huge opportunity for Medicare to take the lead and recognizing this.
And instituting training, clinical clinician training in this space, to help mitigate against what we now know, it can be a huge barrier to adherence to trust, and everything that we know presents a challenge when we need to, then, sort of, implement, you know, public health measures.
The fourth thing, and I’m going very quickly here, so use all of the data that we can, that we can collect, and that we have socioeconomic and counter claims clinical data. In Medicare, we tend to default to claims data because that’s what we have readily available, but it is rare to see a claim on any one individual over a 12 month period.
That tells you everything you need to know about that person.
So, it’s, it’s, it’s amazing, I think, what you can learn, when you bring on some of the service data. And what, I hope we can begin to collect around social determinants of health.
Again, to paint a fuller picture and understand how perhaps the health care setting can be the hub for what would be a sole focus you will, of other community based providers to help fill out what we hope will be a more responsive payment system.
And the fourth fish, but not the least, of course, is to harness technology and the delivery of care technology is necessary. It is an inevitable components of how we will deliver care in the future. I think the payment system has a lot of work to do catch up. And I, as an analyst here, I understand what the challenges are.
But at the same time, I think, from the beneficiary’s perspective, one good example is, if a 40 year old is struggling to sign up with a system that’s been developed to sign up, there are 75 year old parents to receive the Covid-19 Vaccine.
And the system is, you know, not user friendly? Can you imagine what?
It’s like for the 75, 85 year old Medicare beneficiaries that we’re expecting to navigate pretty complex and difficult to use systems. So we have the conversation around technology is broad and rich, and we have a lot of work to do in that space in terms of leveraging how we use it to address health equity concerns.
And with that, I will turn it back over to Gretchen.
All right? Thank you so much as a fabulous, really terrific overview. Now.
Take questions from our audience and remember to use the questions panel to submit your questions at this time.
So, while the questions populates, let’s start first.
Biggest questions. What happens? sometimes not.
But I think we’ve talked a lot about the importance of a trust fund and that lesson Israeli, I’m critical, but what happens if it’s not addressed?
So, so, I can take that. So, if we go by then, the Medicare Trustees estimate that 90% of Expenditures would be able to be covered by payroll taxes.
What that means isn’t that, um, people would only get 90% of their care, or something like that.
What it means is that, providers would be delayed in getting their payments, so people could go to the doctor, but the provider might, it might take a little while.
They have to wait for the payroll tax revenue to come in, so they can then pay the provider.
So that’s generally technically what would happen.
The question then becomes, though, what are the impacts of that?
Do people then face delays in getting care, because providers are getting delayed in their payments? And if that’s the case, then it’s the people who have higher health needs that are going to face more problems, so people with heightened health needs, more vulnerable groups, may may potentially have more problems accessing care.
I think just to add to that, the law is silent to what happens when the trust fund runs out.
There’s no kinda playbook that would describe the operational procedures, and I think that we can only speculate what would happen if funds were there to pay current benefits.
I think one risk would be that providers may decide not to take Medicare patients or to really kind of backlog care or are potentially health plans they choose not to participate within the program.
If I can just echo of one of the points Jorge just raised. I think it’s helpful to play that out.
If there are delays in care, who are the folks who are most likely to suffer the greatest consequences? It’s likely, the more, The more vulnerable to those who can least afford gaps in care.
This is one of the things, one of the questions is asked in the Medicare current beneficiary, sir.
Same thing, you cut out on us.
OK, well, hopefully I daresay well, able to tune back and with her international. Sorry about that.
Let’s turn to another question, and hopefully we can get back to it as a point.
How does focusing on trust fund overemphasize certain approaches?
In some ways, a lot of the focus on the Hospital Insurance Trust Fund are we overlooking other approaches are on premium the Medicare program out. Great!
I don’t know how you heard.
Cori, Jon, do you want to jump in and answer that?
And that is, focusing on the …, really, and some ways might force us to have certain solutions.
I’ll start, and then Jon can. Yeah, time and again.
So if we’re focused on HE, then we’re going to be focused on the providers and the benefits that are in a tie as well as the revenues that are coming in.
So that’s gonna lead us to focus on hospitals and on and on payroll taxes, and look at solutions that address spending in that area, which looking at those things No, may be appropriate. But we’re ignoring a whole other set of things that might help improve the program. So some of John’s work, he’s looked at and others have recommended, looking at site neutral payments, which make a heck of a lot of sense, right, But they don’t help The HE trust fund at all. Even though they can reduce spending its spending in Part B?
Um, the other thing I think that, looking, just solely at HSI, is that it’s, it creates some weird opportunities.
I guess it’s not quite the right word to, you know, shift costs from Part A to Part B, Well, that might help the HI trust fund, which is fine.
But it doesn’t lower Medicare costs overall. So, it’s, it’s the way it’s structured. So, you know, we need to look, and that’s why we keep saying that. We need to look not just at a high, and what makes sense for bringing that trust fund into better financial status, but what makes sense for the program as a whole?
Just to add to that, the Part B side currently is projected to grow faster than than part A, and due to the choices that Congress made back in 1965, there’s two different mechanisms that have two different rules, But it doesn’t necessarily get to, which services really have the highest growth pattern that have the highest spend that have the highest burden on beneficiary cost sharing.
Beneficiaries pay relatively low, cost, Sharon four, Part A services. So, I think there really needs to be the Smarter Balanced Scorecard, more balanced set of financial measures. Provider measures beneficiary measures to really assess the true solvency questions.
But if you just take a kind of pure spending perspective, Part B part is currently growing faster, and may have the more kind of budget pressures, but not necessarily the same solvency type type issues.
So, talking more about how this ought to be addressed, what are stirring the pros and cons of taking?
Given that size of that amount, changes and savings, that we need to be achieved to significantly expand the trust fund, as Jon has had.
And so what are the pros and cons? I’ve taken more a piecemeal approach, versus a beggar.
Larger protests think it really gets back then. It gets back to the goal.
So, if the goal is to extend the solvency and two, to extend the kind of crisis period or are really push it out policies that have bigger savings during the first kind of several years, we’ll have more more solvency.
Delay if the goal really is to address the overall cost of the program, to address the overall fiscal situation, given how Medicare currently is, is paid.
For the policies that, you know, tend to a structure more carefully, war, peace, feel, or piecemeal may have lower kind of policy. Standards going forward, given the dollar size, given the rationale.
But just the math, if the goal is to really delay solvency and 15 years, then you need to really think about sizable changes. You need to think about more kind of earlier, changes.
That’s very difficult to do, just to find those savings, given the current dollar size which may argue that Congress really have to take more of a kind of stepwise approach to ensure that the kind of policies don’t create huge disruption as large policies can do.
And, I’ll add onto that, that we really need to think about whether we’re doing everything at once, or doing things more incrementally, you know what is our ultimate goal of what we want this program to look like.
And you could get there by making big changes at once, or you can get there incrementally.
But, if we’re just have this focus on solvency or things like that, and we just implement a whole menu of things, that save money, that are coming from different options and different silos, then, it’s not necessarily getting us to where we want to be, in terms of what this program should look like.
And so, I think we need to think about that, too, as we’re moving forward. And John’s tool, I think, really tries to get at that a lot by looking at a lot of different metrics rather than just solvency. But where is it that we ultimately want to be?
And, unfortunately, I don’t think there’s necessarily agreement on that.
But making sure that things that we’re putting in makes sense toward that goal, I think, is important. I don’t even think we’d have full fledged discussion. I’m sure my bandwidth will kick me off again. So, if it knocked out my video, that’s fine.
But quite just agreeing with you, I don’t think we’ve had a full fledged discussion as to what that both what the options are. It’s hard for me to see Medicare.
Long term, in its current structure, as more people age into the program, as people live, longer, was more serious chronic conditions over a longer timeframe.
The current financing structure, and we haven’t touched on revenues very much so far, But it just doesn’t seem like it’s structurally sound, which is why, you know, as I was sort of thinking about, was this traumatic thinking about the demand side, as well.
How do we reduce the pressure, perhaps, and take a longer view on the program? But that’s, that’s a conversation.
None of us here are pie in the sky tide of Medicare people. We know how difficult it is for Congress to grapple with.
very tough choices, all of us for around four, the undoing of SGR and how long that took in 2015.
And I know that there’s not a lot of appetite to sort of delve back into this space but we’re presented with an opportunity I say.
Just by virtue of the party insolvency issue and I think we just have to meet the needs of the moment.
That makes a lot of sense.
Know it as I had started to touch on that, and perhaps you want to continue your thoughts on. What else actually considered in terms of improving Medicare are involved.
People are thinking about insolvency and trying to address a trust.
What else do you think ought to be part of that bigger picture?
Well, I think, you know, I mentioned some other options, once, young man.
Who was like, well, we should think if you think about healthy people, 20, whatever, particular decade, 2010 and 20, 20. It’s kind of like a public health goal, right? There are lots of different measures, lots of different things that, you know, CDC would put out. There is an apparatus in the country that gets at meeting some of those goals, even CMMI would see on my design, some of the interventions around meeting the goals. It’s funny, you know, Healthy People, 2000, whatever. Funders are W J. Macquarie would design funding initiatives around those those.
Imagine if Medicare, under some construction, had something like that, and we focus on, say, obesity and obesity, because it’s like the all purpose contributor of everything that in Medicare, it leaves everything. You know, whatever the problem is in terms of Medicare spending obesity is is one of the main undergirding factor.
So imagine if one has a unified goal in reducing obesity and looking at that through the equity lens for the most vulnerable. These are some of the costliest people they’re not, they become ESRD, chronic kidney disease.
Obesity is one of the predisposing conditions, right? So taking perhaps a more public health view, a longer term view to see from the programmer more.
On a more sort of structurally sound swing from the beneficiaries perspective, I mentioned technology.
It would be to see a past 30 years from now where technology is not a key part of how we deliver care. We’ve learned that in 2020.
So, how do we incorporate that more as part of how we deliver care?
Beneficiaries recognizing I was at medpac, I know that we have A real concern around program integrity and having it now be additive as opposed to, you, know, using technology in lieu of services in person. So, you know, we have some policy work to do to catch up providers, and physicians have a lot to contribute in that space.
I protest about, you know, lots of ideas that Congress never taste of.
H if you worked at Medpac was the easier the timezone ever taken.
But, you know, I don’t think it should dissuade us from continuing to come up with ways to think about, we framing our conversations, so that they’re not a series of short-term fixes to what are structurally difficult problems that we have to address with more compounds solutions, makes a lot of sense.
Um, let’s turn to the pandemic. First talk about how has a pandemic affected by a trust fund.
one of all the various solvency protections from my hands on.
Oh, happy to start.
I don’t think we fully know what the, the, the overall changes will be, that there’s kind of several dimensions to think about.
The first dimension is, how is care returned to its current to it, to it pre covert pattern? Pick the best data, says that the last part of 2020, that care really came back to it, to its true at … level. But what we don’t know is kind of how much care was avoided.
How much preventative care didn’t take place, that could really cause cost to jump. We don’t know how the economy is going to bounce back. The cart, A trust funds really sensitive to tax changes, changes to the economy. We have CBOs, best guess right now. But it’s very sensitive to those changes. But we really need to, I think, you know, calibrate carefully going for the current numbers that we shared.
Our are based upon the current CBO projections, but that will change due to better health care data that are sent to how take care patterns change going for, and does the economy, you know, bounced back, you know, quite quickly, as what, what CBO CBO now says, or take your time to get back to a critical levels. But these numbers will change. Don’t bounce. And Congress will have to make the best decisions going forward, given very changing knowledge, circumstances, going forward.
I think you’re on mute.
Sorry. You’re on mute.
And The question is more around a pandemic are also in terms of how it and changed views in terms of payment arrangements.
In terms of how it’s affected various providers, let’s start with payment arrangements to our providers. More open to different types of payment arrangements now. Has it has a pandemic rally? Open those doors a bit more?
I think, I’ll start, I think that’s the expectation, right.
That providers, especially those who suffered really redactions in their revenues, maybe open to different payment arrangements that may help smooth out their revenues. So this could be an opportunity to implement, to go down that path more.
The flip side, I think there’s some concern about even further consolidation of providers moving forward.
Yeah, I do, so I don’t know. But I don’t know if they’re expecting different arrangements.
But my sort of take away from lots of different conversations is there certainly expecting to be page. They want to retain some of them.
The new provisions that came about due to the public health emergency declaration which sort of I don’t want to open the floodgates, opened up, you know, the opportunity to be, to, you know, to, to bill four, um, tell it telehealth.
What I think providers don’t grapple with, as much as the point I alluded to earlier, which is, the program is already stressed and even on the commercial side, there’s very little interest in payers, pay for it.
Yet another way to just sort of add and add and add to care that has no demonstrable impact on health outcomes and that because that’s sort of the definition of waste.
And so while we believe in the value of opening up access points to care that are perhaps not brick and mortar, that should be less expensive, at least fixed costs, over time, should be coming down.
There’s no, I think providers grapple less, with the program integrity question, which is a problem for policymakers, because that’s part of them.
It’s probably the main reason for the reticence around, at least in the Medicare program, the reticence around sort of opening up the gates to telehealth. So there’s still a lot of room for a meeting of the minds, and what this looks like.
Moving forward, I think that one question that does not known is, Do Medicare beneficiaries believe they can get better benefits, graduating private plans, rather than the traditional Medicare program? And during coven private plans have more flexibility.
Then they are the traditional program to offer supplemental benefits, to offer more telemedicine benefits. they’re covered by fee for service, they could provide meals, support, transportation, support.
I think one question might be to do beneficiaries believe that they can get, get better benefits, more benefits that would kind of help navigate the kind of pandemic. Response rather than the traditional fee for service program.
That’s a great question, and I want to make sure we get us and we’ve gotten a lot of questions on this as actual funding for that trust fund and general revenues.
In general, and that’s why this one of the most in there, um, and the recommendations that we had, Medicare thought leaders put together for the Commonwealth Fund, one of the most frequently recommended ones, was essentially redirecting the net income investment tax toward the trust fund and essentially providing a new source of funds or the trust fund.
I’d like to get the panel’s thoughts on what sort of the appetite for increasing payroll taxes. Redirecting existing taxes should be thinking about.
Different sources have financing for the trust time as a whole.
Anyone wants to check that out?
No, I’ll start and avoid the question, but.
Yeah, when there’s a gap, there are two options, right.
Reducing the expenditures are increasing the revenues, so it’s appropriate, I think, to consider some of these ways to increase revenues, to help reduce that, that gap.
I think, you know, the question that Congress really has really has debated, I think, the past 15, 20 years is kinda what kind of mechanisms?
Should be consider to really think about checkpoints or kind of stopgaps. When those triggers get, get met, Depart a trust fund has kind of very precise triggers, that kind of solvency date creates rural.
Are real consequences per pig doesn’t have those. Part B gets just a continuous funding coming from, from current general tax sources or federal deficits spending.
I think the question really is, how to finance.
But does Congress need to have new measures, different measures, to really create those checks, Those kinda stop gaps, to really assess the overall program.
So I don’t have much to add, President. You can probably tell this is one of those questions. It’s just a minefield.
The only thing I would add is that no quiet, it’s not either Or.
The Congress should debate, not just same aims. Know, that we can realize in the program, right, and how we can reduce. I call it reducing sort of pressure, expenditure pressure on the program.
But also, on the revenue side, who we didn’t talk very much about, and this is probably, I don’t know, I’m not the one I supposed to lead that conversation, So, a different group should really weigh in on what should we do about financing, you know, the, right on the revenue side. What additional sources of income should we be thinking about?
The one thing I will say, so it’s not either or but the one thing I would add is that and new monies funding a program that is structurally sound to meet the needs that we know are coming in 20, 30 years is not a solution is just sort of delaying them the inevitable. So consider both, but we should be really having a much tougher conversation around what what does Medicare, you know, 30 years from now, what should it look like?
Well, thank you all for really trying to deal with that tough question. I appreciate you say we’re at the end of our time.
I want to thank you all for your insights on this, and thank you for your really excellent presentations.
Really terrific panel, or take time to complete the evaluation survey. And also, a recording of this webinar and additional materials are also available on the Alliance’s website.
Korea, China, as a thank you, again, for joining us. Assess them, Absolutely terrific.