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Politics : Formerly About Advanced Micro Devices
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To: combjelly who wrote (613248)5/27/2011 1:28:50 PM
From: TimF1 Recommendation  Read Replies (1) of 1577593
 
Medicare Actuary: Obama Medicare Cuts Will Deny the Elderly Access to Care
Filed in New Health Care Law on May 23, 2011

For the second year in a row the CMS Office of the Actuary has released a dissenting analysis (to the Medicare Trustees’ report) of how the Affordable Care Act (ObamaCare) affects Medicare:

One of the most important factors in projecting Medicare expenditures are the annual payment updates to Medicare providers. The estimates shown in the 2011 Trustees Report are complicated substantially by mandated reductions in these payment updates for most Medicare services….. It is reasonable to expect that Congress would find it necessary to legislatively override or otherwise modify the reductions in the future to ensure that Medicare beneficiaries continue to have access to health care services.

Here is Chris Jacob’s summary:

The report estimates that, if the productivity adjustments were to remain in effect, by 2085 “Medicare and Medicaid payment rates for inpatient hospital services would both represent roughly 33 percent of the average level for private health insurance.” The report reiterates the actuary’s projection from last year that the productivity adjustments could cause approximately 40 percent of providers to become unprofitable by 2050. Likewise, if the SGR reductions remain in effect, “Medicare [payment] rates would eventually fall to 27 percent of private health insurance levels by 2085 and to less than half of projected Medicaid rates.” It’s also worth noting that all of the economists with whom the actuary’s office discussed these provisions “believed that the payment reductions were unsustainable,” including liberal economists like David Cutler, who served as an unpaid advisor to Barack Obama’s presidential campaign.

healthblog.ncpa.org

Of course the Medicare actuary is assuming that the "cuts" (really just reduction in future growth) will do nothing to reduce future prices. I think (if the cuts actually happen, and that's a big if) that they will have an effect on containing medical care cost growth. They would have a better effect (more benefit for each amount of pain) if they where more market based and less command and control, but they should have some positive effect if they ever actually happen.

But despite my disagreement with that point, the post is useful because it shows how the alternative is not "keep increasing payments forever as prices go up", its an issue of different ways to reduce the future growth in government payments. The projected growth in payments is unsustainable. Its going to be reduced at some point (likely without any actual cuts as real per capita spending will keep going up).
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