It appears that federal costs for reimbursing private health insurers are beginning to drop, after Patient Protection and Affordable Care Act (ACA), also known as Obamacare, has begun to come into effect.

The Medicare Rights Center released a report today that provides an analysis of Medicare benefits through the Medicare Advantage (MA) program in New York. Before the ACA went into place, its detractors said that insurers would exit the market and prices would rise for everyone. This doesn’t appear to be the case.

The mandating of private healthcare was one of the landmark issues of the Obama campaign and both marked and marred the first two years of his presidency, with some states even calling it unconstitutional and challenging the government’s right to force patients to buy health insurance. Others called it a hidden tax, or slush money for insurance companies.

Government healthcare is always a controversial issue and although the National Health Service (NHS) in the UK seems to be holding together, government run projects often fall into the trap of lacking performance incentives once the profit motive and efficiency demanded by the private sector is removed.

One country that seems to have a sensible, although expensive model is Switzerland, where all residents must purchase private health insurance through more than a hundred different providers that compete for the business. Wait times and access to procedures and technology is amongst the best in the world and while it is hard to compare a small wealthy country with a large, complex and heavily indebted one like the United States, perhaps the concept is beginning to work and comparisons with massive institutions like the British NHS are unfair.

Doug Goggin-Callahan, Director of Education and New York State Policy at the Medicare Rights Center was glad say:

“The doomsayers were wrong when they said that a reduction in plan payments would increase costs, decrease benefits and diminish plan choices in the MA market … In fact, in New York, plan availability and affordability has remained relatively unchanged and has improved in some areas, according to our survey.”

The report, entitled New York’s Medicare Marketplace: Examining New York’s Medicare Advantage Plan Landscape in Light of Payment Reform, analyzes the 2011 and 2012 MA plan in New York State to see if changes in plan enrollment, benefit offerings or costs changed after the ACA measures were put in place. Joe Baker, President of the Medicare Rights Center said

“The experience we document in New York is roughly similar to what has happened in the MA market nationwide, and it is reassuring that the overall MA plan landscape in 2012 appears to be as robust as it was in 2011 … However, as changes in reimbursements to MA plans move forward, we must continue to monitor plan benefits and make certain that insurers’ efforts to control costs and maintain their bottom lines do not fall on the backs of beneficiaries.”

With presidential election time looming ahead, perhaps we should take the positive glow with a small pinch of salt – there is certainly an incentive to put some window dressing on what was and will be one of the most expensive undertakings of the Federal Government in decades.

Written by Rupert Shepherd