Wednesday, September 5, 2012

Campaign Medicare Debate

by George Burns

Several topics in this year's presidential campaign grab the headlines - some important, some not.  Charges and counter-charges are hurled about by the candidates, their surrogates and the media with each side assuring the public that what candidate A says is right while candidate B is wrong or vise versa.  The result is a bewildering array of propaganda mixed with truths and half-truths.  And, on occasion, outright lies.  So, absent trustworthy facts on which to base decisions too many votes will be cast for the wrong reasons (good looking, good speaker, nice smile, agreeable promises, etc.) or trusting the lesser informed opinions of others.  Consequently, the only way to cast an informed vote is to fact check credible sources ourselves.  
One of the more contentious issues in this campaign is Medicare, including the status of $716 billion taken from Medicare over the next decade to fund portions of Obamacare.  First, two relevant facts.  Medicare is in financial distress. The Medicare Board of Trustees in their 2012 Annual Report estimate that Medicare will only be able to pay 87 percent of expected benefits starting in 2024.  After that the "expenditures that can be financed with HI [health insurance] dedicated revenues will decline slowly to 67 percent in 2045, and then rise slowly until it reaches 69 percent in 2086."  These projections are based on an uncertain future.  Thus, they are more likely to decline than improve.  Second, over the past 30 years Medicare has doubled as a share of the nation's GDP and will double again in the next 30 years.  It is the second largest item in the entire federal budget and growing rapidly.  The pace of Medicare growth when coupled with Medicaid, Social Security and debt interest payments will consume the "entire" federal budget by 2025.  This means either dramatic cuts in government spending or huge tax increases will be required.

Past administrations and congresses knew serious funding shortfalls were looming, including Medicare, but chose to avoid the political fallout they would personally suffer if they attempted in any way to alter promised government benefits.  Instead, they applied temporary band aid fixes.  They "kicked the can down the road," knowingly compromising the nation's financial future and deceiving the public.  Both the political left and right are guilty.  So, innocent tax paying citizens will suffer the consequences of those selfish political decisions.  Such is the world of politics and why it is up to us to be diligent in choosing elected officials so they will, instead, suffer the consequences of their malfeasance.  To the 2012 campaign and the Medicare debate.

In a "nut shell" the debate is this.  The Obama camp contends that the $716 billion in question represents a savings in future Medicare costs as a result of implementing Obamacare and, therefore, is not a cut in Medicare funding.  Instead, the expected benefits of Obamacare will offset any losses to Medicare.  The Romney camp says this is not true.  They argue that it is, in fact, a real cut in Medicare benefits and that, if elected, they intend to restore the funding.  Hang with me as the details can get confusing.

Bruce Johnson in his 2 September 2010 article quotes from a 22 April 2010 memorandum Richard S. Foster, Chief Actuary of HHS's Centers for Medicare and Medicaid Services, entitled Estimated Financial Effects of the Patient Protection and Affordable Care Act, better known as Obamacare.  Johnson points out that Obamacare uses "the 'savings' from cutting the [Medicare]  programs mentioned [in Foster's memo] to reduce the cost of the Obamacare program."  But there is a hitch.  It seems that the supposed cuts in the first case are counted and then counted again in the second.  Johnson reinforces this point with two videos. 

Here is a lift from Johnson's article:  "From ABC News, 2009 interview with Obama.
TAPPER: "One of the concerns about health care and how you pay for it - one third of the funding comes from cuts to Medicare."
BARACK OBAMA: "Right." Video
Yet it is also declared, by the Administration, that the cuts and savings are to assist in extending Medicare. That is double counting.
In Congressional testimony, Sebelius, Dept of HHS, responded thusly to a question.
Question: Are you using it (Medicare cuts) to save Medicare or pay for health care reform (Obamacare)?
Answer: Sebelius: "Both". Video "
Confusing, no? 

It is well known that Republican Congressman and Vice Presidential nominee Paul Ryan's recent budget proposal includes similar cuts to Medicare.  But, the Romney camp claims that the money saved will not be used for another program.  Instead, Mr. Romney has pledged to restore the funds in order to extend the life of Medicare. Neither the Obama nor Romney camps' positions deny the need to reform Medicare.  But which side has the political will to make it happen?  If history is any guide "real" reform is unlikely no matter who wins the election.  

So, where are we?

In his 16 August 2012 article, Ryan and the Real Enemy of Medicare, Steve Chapman points out that Obama's "own Simpson-Bowles commission called for a variety of measures to slow its galloping growth, some of which could inconvenience seniors. However, Obama ignored their proposals.  Chapman also notes that "Ryan's plan, contrary to what critics like to pretend, would not mean draconian cuts for people already on Medicare or about to be. The only people subject to most of the changes are those under age 55."  The Obama camp charges that the Ryan plan will end Medicare as we know it and, using scare tactics, claims Ryan wants to throw seniors off a cliff.  In reality both proposals would alter the program in measurable ways.  

Chapman continues by quoting from former President Clinton's budget director, Alice Rivlin. In her April 2012 congressional testimony Rivlin said that the Ryan approach "seeks to combine the tools of market competition and cost-effective regulation in hopes of maximizing the chances of improving health care for seniors at a sustainable cost."

A 15 August 2012 article by James C. Capretta reports that the Congressional Budget Office (CBO) confirms that Obamacare cuts more than $700 billion from Medicare.  Capretta adds that the cuts are "arbitrary and across the board. They reduce reimbursement rates for all who provide services to Medicare patients, regardless of how well or badly they treat their patients. Among the cuts is a $156 billion reduction in payments to Medicare Advantage plans over ten years. These cuts will force seniors to pay $3,700 more for their health care by 2017, according to a study I co-authored with Robert Book (for those who might be interested, the cuts are distributed by congressional district here). The Medicare trustees project that the cuts will drive some 4 million seniors out of Medicare Advantage plans between 2012 and 2018."

Further, Capretta says, "the Medicare cuts in Obamacare would slash payment rates for hospitals, so much so that the chief actuary of the program has warned repeatedly that the cuts will jeopardize access to care for seniors. He has estimated that if the cuts go into effect, 15 percent of hospitals and nursing homes will have to stop taking Medicare patients to avoid the large financial losses that result from getting paid at Medicare rates. By 2030, some 25 percent of these institutions would need to drop out of the Medicare program." The Obama camp claims the reductions are fair because of bloated overpayments to doctors and hospitals.

Capretta adds that "The Democratic response to these points is that Representative Ryan’s budget plan, which passed the House in April, includes these Medicare cuts, too. But that’s an oversimplification. The Ryan budget retained the savings associated with the Obama Medicare cuts largely because they are in the current-law baseline, and the GOP wasn’t able to find enough spending cuts elsewhere to offset them. But that doesnt’ mean the specific cuts in Obamacare were endorsed. They weren’t. Ryan’s budget allows the substitution of sensible ways of saving money in Medicare for the arbitrary and harmful cuts contained in Obamacare."

Is all this clear?  Who is right?  Whose stated position is more truthful?

This is but one of many examples of obsfucation of the issues in this campaign.  It is hard to know who to trust.  Seek the facts for yourself. The below sources provide additional detail not covered but may assist in a search for the truth.



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