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Getting the latest healthcare news for you
Getting the latest healthcare news for you
A law meant to save Medicare money may actually be draining federal coffers. A new study finds that while the Medicare Secondary Payer Act saves over $3.6 billion annually in direct Medicare spending on dialysis, lost tax revenue from lower wages nearly wipes out those gains — and could soon tip the balance into a net loss for the government.
A decades-old federal law designed to keep Medicare costs down for dialysis patients may be doing the opposite. The Medicare Secondary Payer Act (MSPA), enacted in 1980, requires private employer health plans to be the primary payer for end-stage kidney disease patients for 30 months before Medicare takes over. A new study in the Journal of the American Society of Nephrology reveals that while this arrangement saves Medicare money upfront, it comes with a hidden fiscal cost.
The catch? Private insurers pay five to six times the Medicare rate for dialysis — some of the highest markups in all of healthcare. Those sky-high costs eat into employer profits and employee wages, shrinking the tax base and costing the federal government billions in forgone income and payroll taxes.
By the Numbers:
Why it matters: Researchers warn that if dialysis prices keep rising, the MSPA will soon cost the government more than it saves. They propose two fixes: making Medicare the sole payer for dialysis, or capping private insurer payments at 300% of Medicare rates. Either way, the status quo is funneling money to for-profit dialysis chains rather than toward improved patient care.
