Medicare and the other entitlement programs are putting our fiscal future in danger. ObamaCare includes $500 billion in cuts to Medicare, but Medicare’s Chief Actuary doesn’t believe they’ll ever happen. “This led Foster to his central argument:. Rather than face the draconian consequences of its decisions, Congress will step in to prevent the cuts and restore services… Health care reform was sold to Congress as an act of fiscal prudence. It’s beginning to look more like an exercise in profligate spending.”
A USA Today story highlights the attempts of educational organizations to teach people the truth about ObamaCare, but instead ends up perpetuation misinformation. Seniors are correct to be concerned about cuts to Medicare benefits and rationing.
The presidents of Texan medical schools are concerned about new costs from ObamaCare that will cause them to train fewer doctors. Teaching hospitals rely on Medicare and Medicaid patients, and they will be reimbursed less per patient by the government according to ObamaCare’s new payment schedules. Given that new insurance subsidies will drive up the demand for medical services, a restriction in supply could result in higher premium costs or rationing of care.
“Obamacare’s apologists would like Americans to believe they have set in motion a sophisticated and carefully considered plan to slow cost growth in Medicare — and the rest of the health system for that matter. But the truth is that all they have done is put into law a formulaic requirement for deeper price cuts in Medicare. That’s it. Presto! Problem solved! But of course, the problem is not solved. Arbitrary price controls always and everywhere drive out willing suppliers of services. Who will see Medicare patients at 33 cents on the dollar?”
Democrats are trying to convince senior citizens, a key voting demographic in the upcoming mid-term election, that ObamaCare is good for them. Seniors aren’t being persuaded, and still strongly oppose the bill. A significant reason is because of the huge cuts in traditional Medicare and Medicare Advantage. “But political observers, even those who have served in Democratic administrations, are skeptical as to whether those benefits can offset seniors’ concerns about reduced government payments to Medicare Advantage.”
“Politicians have deliberately written the ObamaCare rules, as they have for all entitlements, so the real costs are disguised and hard for taxpayers to figure out. During the ObamaCare debate, Mr. Foster was honest enough from his Medicare perch to expose the plan’s true costs, and his new Medicare demarche continues this public service. He ought to receive the Presidential Medal of Freedom, or at least some media attention. But in Barack Obama’s Washington, his honesty will be rewarded with obscurity.”
ObamaCare cut over $500 billion in Medicare payments to health care providers over the next 10 years. These cuts were in an arbitrary, across-the-board manner, and are unlikely to work properly because it’s difficult to second-guess how medicine will advance over the next decade. “This is an inherent defect of Medicare not found in markets. Competitive markets automatically translate productivity gains into lower prices for consumers. Medicare protects providers at the expense of enrollees and taxpayers.”
The Medicare Trustees issued their annual report outlining the financial status of Medicare last week. At the end of the document was a formal rebuke from the chief Medicare actuary, casting doubt on the rosy portrayal of the main report. “It is difficult to overstate how unusual this development is. The normal process with the annual Trustees’ Reports is for the Trustees to develop and publish the best available projections for the future finances of Social Security and Medicare. The respective Social Security and Medicare actuaries then sign a pro forma blessing of those projections, which is tacked to the back of the report when released to the public.”
“The ‘spin’ surrounding the Trustees Reports will largely involve what the new health care bill did and did not do to ‘solvency’ and other metrics. Unfortunately, the real ‘news’ in the reports is that the window for reform to slow the growth of these programs and to keep taxes at historical levels has nearly closed. Program beneficiaries need to be told of changes before they retire so they can adjust their life plans accordingly. If someone knows in advance that Social Security benefits will be lower or Medicare Part B premiums higher, they can delay retirement and make other changes. When people are informed of these changes in retirement, that flexibility has been taken away, leaving them worse off. Yet, if reforms are passed in say 2013 (a soon but reasonable timeframe) and they exempt future beneficiaries within 10 years of retirement, the reforms will (or can only) address less than 40% of the entitlement cost growth. In short, the painful process of adjusting to a much larger government will have already been baked into the cake.”
“In the 2010 Annual Report of the Board of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, the Board warns that ‘the actual future costs for Medicare are likely to exceed those shown by the current-law projections.’ The Trustees Report is necessarily based on current law; as a result of questions regarding the operations of certain Medicare provisions, however, the projections shown in the report do not represent the ‘best estimate’ of actual future Medicare expenditures. The purpose of this memorandum is to present an alternative scenario to help illustrate and quantify the potential magnitude of the cost understatement under current law.”