"Mediscare" in Perspective

The first and great commandment is, Don’t let them scare you.

Elmer Davis (1890-1958), Head of Information Department in World War II

Medicare will start running out of money in 2024 -- five years earlier than projected last year — as a result of the sluggish economic recovery, the program’s trustees reported today.

The outlook for the federal health insurance program that covers 47.5 million elderly and disabled Americans is a dramatic shift from last summer. That's when the trustees, including Treasury Secretary Timothy Geithner and HHS Secretary Kathleen Sebelius, proudly projected that the new health law had extended the solvency of the program by 12 years from 2017 to 2029.

Kaiser Health News, May 13, 2011

Democrats and Republicans are trying to scare Americans about the future of Medicare.

According to Kathleen Sibelius, HHS Secretary, the hardhearted heartless Republicans have a plan that would have seniors “die sooner.” The Republicans meanwhile are saying the financially feckless Democrats are bent on destroying Medicare for generations to come with no motive other than political expediency.

The three triggers for this debate are:

- raising the debt ceiling to compensate for the $15 trillion deficit and the $50 trillion inf “unfunded liabilities."

-Wisconsin Representative Paul Ryan’s plan to allow future Medicare recipients to have a $15,000 “premium platform” to buy private Medicare plans.

-the Presidential election in 18 months.

At stake are the votes of 47.5 million current Medicare recipients and those 78 million baby boomers coming on board the Medicare bandwagon over the next 18 years.

So far polls indicate Democrats are winning the ballot battle, but the debate is still in its early stages. The liberal press – Washington Post, New York Times, the New Yorker, and the Huffington Post – have lined up on the side of the Democrats. The conservative media – Fox News, the Wall Street Journal, the Weekly Standard, and the National Review – back the Republicans.

The weak economy – 9% unemployment, a 10% plunge in the housing market, the mounting $15 trillion debt, a 7.3% health inflation rate, the cost of 3 wars – would seem to help Republicans. The Bin Ladin “kill” and lack of a credible Republican presidential candidate tilt the election toward Obama.

The continued recession hurts Medicare's $573 billion budget because payroll taxes used to support Medicare were $2.5 billion less than expected. Accelerated aging hurts too. In the last year, those 65 and older are now estimated to live 2.4 years longer than predicted.

Physicians are restless about Medicare.

• The health law gives inadequate incentives to produce the primary care physicians needed to take care of the 32 million new Medicaid recipients expected in 2014 and didn’t even begin to address the needs of baby boomers turning 65.

• The RUC (Reimbursement Update Committee), said by many to be a collusion between the AMA and CMS, has done nothing to narrow the gap between specialty and primary care pay.

• The idea of accountable care organizations, designed to “save” Medicare billions, is floundering due to administrative complexities and projected costs of $11 million to $26 million to set one ACO up.

• Doctors are profoundly skeptical about Congress' failure to fix the SGR formula to pay doctors, and many regard the Independent Payment Advisory Commission as a partisan joke to defund hospitals and doctors.

As a result of these collective attitudes, more and more doctors, in the 30% to 40% range in some parts of the U.S., are not accepting new Medicare patients, and even more are turning away Medicaid recipients. For doctors, Medicare is scarey proposition, worthy of its designation as "Mediscare."