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A growing access to care crisis is developing in Alaska – and as a primary care doctor serving the Anchorage community, I’m worried about its implications for Alaska patients and families. Underpayment from Medicare and Medicaid are already having serious impacts for patient health outcomes and the ability of patients to access both primary and specialty care across Alaska. We simply can’t afford for the private insurance sector to go the same way.
Medicare patients already have trouble accessing the doctors and services they need, because reimbursement rates are so low that many doctors can’t afford to take on new Medicare patients. On top of that, this year’s 10 percent state-driven cuts to Medicaid payments will bring similar challenges for Medicaid patients. And now, our state’s largest private insurer is threatening to bring these same challenges to the private market -- by basing all its payments off Medicare rates.
Combined with insurer efforts to undermine patient protections for out-of-network care by undoing the 80th-percentile rule, the consequences for patients will be dire, leaving them with growing out-of-pocket costs and paying for insurance that doesn’t cover the care they need. As these shifts leave many providers with no way to keep their doors open, patients will have fewer options and longer wait times.
Medicare is a government program created to be a safety net for seniors who had difficulty purchasing private insurance. It wasn’t intended to cover the cost of services provided, and it’s completely inappropriate to use it as a standard for all rates for all patients. Medicare doesn’t even have established rates for huge areas of services that people younger than 65 need – like pediatric and obstetric care. Politicians in Washington, D.C., establish rates that have nothing to do with local markets and costs, and those rates get cut every time Congress spends money on other programs. U.S. hospitals already lose $48 billion per year through Medicare underpayment, and the 2018 Medicare Trustees Report notes that Medicare updates haven’t kept pace with physician costs increases, warning that without adjustment, this will become a significant access to care issue. In fact, inadequate increases in Medicare rates have resulted in a 20 percent reduction in real compensation for physicians nationally.
In my practice, Medicare only covers about a third of overhead costs, and many small practices have been forced to limit or even stop seeing new Medicare patients to keep their doors open – making it difficult for Medicare patients to get the care they need.
In 2017, Alaska cut Medicaid payments by about 10 percent for primary, specialty and acute care. More than 25 percent of Alaskans, about 200,000 people, depend on Medicaid/CHIP for their health care. Slashing reimbursement rates for a large percentage of patients is now having a significant impact on practices that primarily see Medicaid/CHIP patients and they are beginning to limit the number of these patients they can take. Medicaid clinics have waiting periods several months long, and Alaska Medicaid patients are finding fewer doctors who will accept their insurance. In short, these cuts are bringing the challenges we see for Medicare patients to the much larger Medicaid market in Alaska.
Private insurance companies are now following this bad example of government programs underpaying. The largest, private health insurer selling plans in Alaska is floating a dangerous new policy, unilaterally claiming it will base compensation to physicians who are already “in-network” on Medicare rates and, beginning in 2019, will decrease payments to physicians by offering contracts that are significantly lower than what is currently paid. At the same time, insurance companies are pushing vehemently to eliminate the 80th-percentile rule in Alaska and pin out-of-network reimbursement rates to Medicare as well.
These reductions in coverage for patients have nothing to do with reducing patient costs. In fact, they just shift costs to patients and doctors. Deductibles and premiums can still be as high as ever – the insurer is simply paying less to doctors for the actual care patients need. The Medicare rates they want to use are made up by politicians for a program funded by taxpayers – they have nothing to do with local market costs and are completely inappropriate for a private-sector entity making record profits right now from patient premiums.
Alaska already deals with a primary care physician shortage. Medicare patients already struggle to visit a primary care doctor, and the state’s reduction in Medicaid reimbursement has brought these same issues to Medicaid patients. Underfunding by private insurance will greatly intensify these problems across Alaska, making it harder for patients to access primary and specialist care. As access becomes more restricted, more patients will forgo or delay primary care and end up in the emergency room, which worsens health outcomes and ultimately costs patients more. In the long term, it will also mean less jobs in a state where nearly one in 10 workers is employed in the health care sector.
At a time when the largest six health insurance companies are making record profits – more than $20 billion through the third quarter of this year nationally and up several billion dollars from last year – and are raising their earnings estimates for 2019, slashing payments to care providers and causing an access to care crisis for patients across the state does not seem like a productive step.
Dr. Mary Ann Foland, M.D., is a primary care physician in Anchorage, Alaska. She is the past president of the Alaska Academy of Family Physicians and the Alaska State Medical Association.
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