Study: PPACA Changes to Medicare Equal Less Benefits, Fewer Choices & Decreased Enrollment

WASHINGTON, Oct. 13, 2011 /PRNewswire-USNewswire/ — The Patient Protection and Affordable Care Act (PPACA) will dramatically reduce the number and variety of healthcare plan choices available to seniors and reduce benefits and enrollment, according to a new study released today by the American Action Forum.  The report outlines that by 2017 nearly all Medicare Advantage (MA) enrollees will find that the plan they have chosen for themselves is either no longer available at all, or available with reduced benefits, higher out-of-pocket costs – or both. Many people who would have preferred a Medicare Advantage plan will now find themselves under Medicare fee-for-service, which will also be subjected to substantial cuts.

“The negative effects of the Affordable Care Act on Medicare Advantage are clear,” said Douglas Holtz-Eakin, President of American Action Forum. “The Affordable Care Act’s price-fixing, cost-shifting programs are fundamentally changing the American healthcare system in a way that is damaging to our seniors, our businesses and our economy.”

“What Changes will Health Reform Bring to Medicare Advantage Plan Benefits and Enrollment” calculates PPACA’s effects on Medicare and finds that Medicare beneficiaries will either lose their MA coverage altogether as plans withdraw from the market or be faced with higher out-of-pocket costs and/or benefit reductions. The report finds that by 2017, 14.8 million would-be MA enrollees will either lose their access to MA plans entirely or drop out due to reduced benefits. And, by 2017, the average person who was enrolled prior to PPACA would lose $3,700 in health care services per year, totaling almost $55 billion for all such beneficiaries. When the new formula is fully phased in, there will be 66% fewer choices available in each county in the U.S. on average, with at least 152 U.S. counties losing all access to MA plans.

“What Changes will Health Reform Bring” directly estimates the dollar-value reduction in healthcare services consumed, and provides a state-by-state report of the declines in Medicare Advantage enrollment, the value of lost benefits and the reduction in health care plan choices from the years 2013 – 2017. Highlights of the report include:

• By 2017, there will be a 50% reduction in Medicare Advantage enrollees; with 67% loss in D.C. and a striking 84% loss in Puerto Rico. Texas, California and Pennsylvania would also experience 60%, 51% and 49% less enrollment, respectively.
• Benefit loses by state vary, with the largest loss in Louisiana, at a high of $5,092 in lost benefits.
• By the end of 2015, plan reductions of at least 30% are observed in all states and by the end of 2016, over half of states are projected to have at least 50% fewer plan choices, on average, by county.
• One of the most damaging effects of the new law is the adverse effects for people with chronic conditions due to disruption in care from changing doctors and the loss of specialists’ ability to communicate with each other.