What is the Regional Impact of the Medicare Fee-for-Service and Medicare Advantage Payment Reductions?

by Robert A Book and Michael Ramlet, University of Minnesota Carlson School of Management Medical Industry Leadership Institute, September, 2012

On July 24, 2012, the Congressional Budget Office (CBO) released an updated analysis of the Medicare payment reductions included in the Affordable Care Act (ACA).1 Notably, this updated CBO estimate represents the first time that the Medicare payment reductions are accounted for in the full 10‐year budget window. Totaling an estimated $716 billion between 2013 and 2022, the Medicare payment reductions comprise a majority of the Affordable Care Act’s budgetary savings. However, the payment reductions are not uniformly distributed across the U.S. geography. To better understand the regional impact of the Medicare fee‐for‐service and Medicare Advantage payment reductions, we have revised and updated our earlier MILI working paper to reflect the state and county‐level impacts based on the updated CBO estimate.

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Hawaii Medicare payment reductions included in the Affordable Care Act

State/County	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022	total 2013-22
Hawaii State	$8.89 M	$96.61 M	$161.9 M	$209.73 M	$212.02 M	$218.61 M	$258.72 M	$291. M	$323.29 M	$371.23 M	$2151.99 M
HAWAII Co	$1.35 M	$12.45 M	$20.73 M	$26.81 M	$27.23 M	$28.79 M	$34.33 M	$38.95 M	$43.58 M	$50.03 M	$284.25 M
HONOLULU	$6.12 M	$72.64 M	$122.48 M	$159.98 M	$158.09 M	$161.26 M	$190.22 M	$213.11 M	$236. M	$271.01 M	$1590.91 M
KALAWAO	$.M	$.01 M	$.01 M	$.01 M	$.01 M	$.02 M	$.02 M	$.03 M	$.03 M	$.04 M	$.19 M
KAUAI	$.52 M	$4.21 M	$6.9 M	$8.69 M	$9.47 M	$10.19 M	$12.21 M	$13.94 M	$15.67 M	$17.99 M	$99.78 M
MAUI	$.9 M	$7.3 M	$11.78 M	$14.25 M	$17.21 M	$18.35 M	$21.94 M	$24.97 M	$28.01 M	$32.15 M	$176.87 M

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