Medicare and Medicaid Cuts Essay

The debate on health care spending has been highly contested and remains the top most agenda on the Obama administration. The U. S government has been pursuing effective health care reforms for quite a long period of time. Focus has been on developing a plan that reduces government spending on heath and home care reimbursements while increasing the regard for insurance cover. An important aspect of these reforms is the reduction in budgetary spending on Medicare and Medicaid programs (Meena, et al. 006). President Obama in 2009 announced the $ 313 reduction in Medicaid and Medicare efficiencies as a move to accomplish the proposed savings essential for facilitating the administration’s heath-care plan. Currently, the cut on Medicare reimbursements paid for health care access costs by psychiatric patients, the elderly and the disabled stands at about 21%. In justifying these cuts, the U. S government points out that the funds would be less essential in the light of a new health care reform. However, at the current economic status and the increasingly declining rates of hospital revenues, this move has resulted into the rationing of medical and home care services, high payroll taxes, and closure of departments and hospitals. According to a study conducted by the American Hospital Association (AHA) regarding these cuts, about one in every five hospitals have already reduced a number of health care services such as outpatient services, post-acute care and behavioural health; as they have had to reduce overhead costs resulting from the cuts (Shen, 2003). These cuts will affect millions of people especially seniors, military families and the disabled who depend greatly on Medicare. This is because accessibility to physician help will be minimized. In support of medical practitioners, The American Medical Association (AMA) argues against these cuts on the basis that they are derived through an unreliable method of determining the physicians’ reimbursements and which according to them ought to be reviewed. It is imperative to also note that the effects of these cuts are being transferred to the public through increased insurance costs. Effects on Access, Cost and Quality of Psychiatric Care There is evidence that patient’s access to health and home care has been increasingly diminishing in the past few years and even got worse following the recent 21% Medicare cuts. Physicians argue that this has been prompted by the increased costs in the provision of medical care services due to the reimbursement cuts. For instance, by the year 2005, medical care provision costs had been projected to be about 40% more than the in 1991 (White, & Dranove 1998). In 2008, about $ 879 million was spent by hospitals in Michigan in subsiding services for the patients affected by the cuts. There have also been care rationing, reduction in provision of vital medical services and closure of hospital departments has been prevalent. This means that access to heath care services by concerned individuals has reduced significantly. A number of medical practitioners have been forced to stop providing psychiatric services to patients due to high overhead costs (Meena, et al. 2006). The reduced Medicare and Medicaid reimbursements have made it impossible for psychiatrists to effectively provide care to long-term-care clients as well. There are reports of psychiatrists declining to provide consultation services in nursing homes as result of the lower rates of Medicaid and Medicare reimbursements received. According to the chair of the Geriatric Psychiatry committee for the Maryland Psychiatric Society, Allan Anderson, the cuts are a drawback to the willingness of the psychiatrists to provide care for the Medicare-based patients (Mulligan, 2002). Geriatric patients currently are underserved. Psychiatrists argue that due to a reduced access to psychiatric care such in cases demanding early interventions, most psychiatric patients are ending up complications. Doctors note that the cuts make it difficult for them to meet the requirements of their practice such as administrative issues and thus end up restricting their caseloads on Medicare. Currently, Medicaid does not take responsibility of the complete co pay for patients on both the Medicaid and Medicare and this has made a number of clinics to close to avoid the extra burden of absorbing the costs of treating these patients. For instance, Minnesota’s Mayo Clinic incurred a loss of about $ 34. 2 million in years 2002 and 2003 due to these cuts and it is such losses that are pushing clinics to close down minimizing access to health acre even more. Access to healthcare for the Medicare patients is increasingly becoming expensive and complicated given that the ability to pay currently determines this access (White, & Dranove 1998). Most heath facilities have had to cut down on their provisions of vital services that the seniors, the metal disabled and the military personnel within the community rely on to protect their bottom lines. Affected patients are being forced to skip visits to hospitals and this has prompted the providers to restrict access through costs. Impact on Psychiatrists and Other Medical and Home Care Providers A study of about 14,000 anaesthologists and surgeons indicate that most medical care providers will change their practice thus jeopardizing health care provision. A third of those studied said they will cease to practice as Medicare psychiatrists. This will adversely affect their quality of life. Practical challenges are forcing the providers to halt providing some Medicare related services, cutback on staff, minimize time allocated for Medicare patients and/or halt further purchase of equipments essential for serving such patients (Konetzka, et al. 2005). This will limit the doctor’s practice adversely. Some medical and home care providers have been forced to quit their practice following the high overhead resulting from the high costs incurred in attending to Medicare patients. Hospitals are being forced to resize on Medicare patients’ staff since hospitals have had to absorb care costs. Individual practitioners are more affected. Reimbursements cuts are prompting hospitals to focus on other non-reimbursement-dependent care services while closing down departments as well as cutting back on services to enable hospitals protect their bottom lines. This trend is prevalent even in community hospitals. In this regards, hospitals and home care provision establishments have had to reduce the number of practitioners providing these services and hence most are on the verge of losing their jobs should the cuts continue as anticipated (Mulligan, 2002). This implies that the government will only be solving on problem while creating multitude of others such unemployment. Many hospitals have also resulted in freezing of workers’ salaries and hence compromising their motivation. Impact on Taxpayers According to Randall (2009), the 2005’s 3 % reimbursement cut resulted into a $ 49 billion in terms of cost on permanent reforms. Currently, the Medicare reimbursement cut stands at 21% at a reform cost of about $ 210 billion. Medicare and Medicaid programs are funded by pay roll taxes. According to the health care reform bill, there will be an expansion of the pay roll tax associated with the Medicare to cover unearned income. It is projected that beginning year 2018; insurance firms will be required to pay an excise tax of about 40% for plans where family premiums range from $ 27, 500 and above (Sam, 2006). Experts note that these payroll tax effects will be transferred to employees in terms of lowers wages and benefits or in terms of higher premiums. This comes at a time when the government is focused on laying strict measure to ensure that people have health insurance. Further, it is also projected that from year 2013, adjustable spending accounts which currently enable users to skip various expenses on health care, will reduced or limited. In regards to the high income earning population, families earning in excess of $ 250, 000 will be required to spend way above what they spend currently on medical payroll taxes. Moreover, the now exempt unearned income will also be subjected to 3. 8 percent in payroll taxes. Individuals and families are definitely feeling the weight of these Medicaid and Medicare cuts through increased payroll taxes. This is because the federal government is focusing on insurances an alterative to help patients meet their health care costs. A 2005study by the Kaiser Family Foundation on employer health benefits indicates that family coverage premiums had increased by an average of about 9. 2 percent (Sam, 2006). Health insurance expenses have made it costly to employees as they are subjected to deductions for the same. At the same time, the mean per month contribution by employees on family plans increased to $ 226 in year 2005 form 2000’s $135. These are some of the costs that the citizens are bearing at the expense of the reduction in Medicare and Medicaid cuts.