Lower Medicare Costs Linked to Continuous Coverage

Margaret Dick Tocknell, for HealthLeaders Media , January 22, 2014

Fewer Physician Office Visits
Beneficiaries with prior insurance coverage made 23% to 50% more physician office visits during their first 5 years in Medicare than those without prior coverage. According to the report, this utilization pattern may indicate that beneficiaries with prior continuous insurance continued to access medical services differently because they were more accustomed to having benefits that physician office visits.

During the first year, beneficiaries without prior insurance spent more on physicians and other non-institutional spending—$381 or 17% more. But after the first year, the beneficiaries with prior coverage spent $589 or 30% more in year four and $511 or 28% more in year five. We know that they visited physicians more often, so this higher expenditure makes sense.

The GAO report seems to confirm that having healthcare insurance as required by the Patient Protection and Affordable Care Act helps lower beneficiary Medicare costs not sometime in the undefined future, but within the first years of enrollment.

Could the much-maligned PPACA and its equally maligned individual mandate could help save Medicare? Stay tuned.

Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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