That Big New Spending Package and Medicare: A Medicare Customer Question

Just days before the new year, President Biden signed the $1.7 billion Consolidated Appropriations Act of 2023.

This omnibus spending package included emergency assistance for Ukraine, academic medicine policy provisions, pandemic preparedness funding – as well as funding cuts that could affect Medicare beneficiaries.

Given the scope of the bill and the reporting surrounding it, it can be difficult for beneficiaries to be sure what changes they may see and the potential impact it could have on their ability to access the care they need.

It's important for Medicare agents to understand what these changes will mean for beneficiaries and be prepared to provide their clients with the resources they have to navigate them.

The Question:

How will Medicare funding cuts affect my client's coverage in 2023?

The Answer

The current spending bill includes a 2% provider pay cut that took effect at the beginning of this month, which will increase to 3.5% in 2024.

However, this averts an immediate 4.5% cut, as was initially proposed, and gives providers time to prepare for the decreases in payment.

Some health care providers and professionals worry that this cut will affect practices' ability to take on new Medicare patients.

Medicare reimburses providers at lower rates than patients paying with ordinary commercial insurance or paying out-of-pocket. After adjusting for inflation, Medicare payments dropped 20% between 2001 and 2021, while the cost of running a medical practice surged 39%.

As a result, this cut could force providers to reconsider their Medicare patient load.

While any amount of funding cuts can sound daunting to beneficiaries, it's important for agents to know the full story.

The bill isn't designed to harm Medicare beneficiaries, and, in fact, it even makes some meaningful strides to support them in other ways.

For instance, it includes an increase in Medicare funding for rural hospitals, which will improve care delivery.

In addition, a 2% cut is not significant enough to upend Medicare beneficiaries' care access overnight.

Between 2019 and 2021, even in the midst of a global pandemic that stretched the health care system to its limits, the vast majority of beneficiaries were "satisfied with their care and did not experience difficulty accessing care," according to the Medicare Payment Advisory Commission.

Moreover, only 3% of beneficiaries had issues struggling to find a new primary care provider in 2020.

In reality, Medicare payments represent only a small piece of most physicians' business, and the vast majority of beneficiaries won't feel the effect of these pay cuts when they seek their standard care.

With all the talk about this omnibus spending bill and the changes to Medicare, it makes sense that beneficiaries may be uncertain and have questions about how they will be affected.

While many beneficiaries will not see any major change, it's true that, for some, the new developments may affect the coverage they have or want.

However, even if that is the case, agents can prepare today by gathering the information and resources their clients may need to ensure they never lose access to care.

Health care experts, such as those at Allsup, can provide resources, assistance and advice to help beneficiaries avoid confusion and maintain quality care services.

Even with the changes that lie ahead, there are always ways to help your clients make the most of their Medicare benefits and ensure they have the coverage they need.

Now more than ever, agents and health care professionals should be prepared to help them along the way.

Bethany Cissell is a health care insurance services specialist at Allsup.