Turning the Screws on Medicare

A turn of the screw makes a bad situation worse, especially in order to force someone to do something.

Cambridge Dictionary Online

January 25, 2013 - The following paragraph in President Obama’s inaugural speech is being interpreted by critics as Obama  saying he will not allow Medicare, Medicaid, or Social Security cuts.  In the case of Medicare, this may not be possible because Medicare is the main economic engine driving the national debt towards possible national bankruptcy. 

Obama’s position is ironic because Obamacare already cuts Medicare by  unprecedented, unreognized, and unacknowledged amounts.

Paragraph from Obama's Inaugural Address

“We, the people, still believe that every citizen deserves a basic measure of security and dignity. We must make the hard choices to reduce the cost of health care and the size of our deficit. But we reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future. For we remember the lessons of our past, when twilight years were spent in poverty, and parents of a child with a disability had nowhere to turn. We do not believe that in this country, freedom is reserved for the lucky, or happiness for the few. We recognize that no matter how responsibly we live our lives, any one of us, at any time, may face a job loss, or a sudden illness, or a home swept away in a terrible storm. The commitments we make to each other - through Medicare, and Medicaid, and Social Security - these things do not sap our initiative; they strengthen us. They do not make us a nation of takers; they free us to take the risks that make this country great.”

Inevitability of Medicare Cuts

The critics may be right. Medicare cuts must be made at some point or the program will go belly-up.  President should acknowledge this inevitability, and he should admit that Medicare cuts on a massive scale are already underway under Obamacare.

 Look at it this way.  The government spent $528 billion on Medicare in 2010.  This will rise to over $1 trillion in 2020.  The new health law cuts over $913 billion (During the campaign, the GOP claimed the true amount was a modest $716 billion) from existing Medicare programs, at the rate of over $ 90 billion a year over the next ten years as follows:

·         Medicare spending cuts,   $458 billion

·         Medicare payment rate cuts, $196 billion

·         Medicare Advantage plan cuts, $136 billion

·         Other Medicare/Medicaid cuts,  $123 billion

Total Medicare Cuts =$913 billion

Where the Cuts Will Come From

These cuts come out of the hide of hospitals, skilled nursing facilities, home health agencies, physicians, and other health professionals serving Medicare patients.   These Medicare providers have several options – raises prices, cut services, or refuse to accept Medicare patients.  To makes these cuts stick and to regulate prices charged, Congress has created the Independent Payment Advisory Board (IPAB).  The IPAB will consist of 15 unelected experts nominated by the President.  To overturn IPAB decisions, Congress must vote to do so by a three-fifths majority, an unlikely outcome.  Republicans would like to end IPAB.  So would the pharmaceutical industry,   hospitals, and doctors.

Medicare Cuts Not Popular

To bring about new Medicare cuts will not be easy.  A recent poll indicates Americans want to trim the federal deficit, but not anything related to Health care by these margins.

·         Medicare, 58%

·         Medicaid, 46%

·         Health Insurance subsidies, 40%

Those polled were against raising the eligibility age of Medicare from 65 to 67 (51%) and requiring all seniors to pay higher Medicare premiums (95%). Instead they preferred to get a “better deal” from the pharmaceutical industry for lower income seniors (85%) and asking high income seniors to pay more (59%).

Summary

Americans like Medicare as it is, even at the risk of future bankruptcy or having future generations pay more.  Most Americans seem unaware that massive Medicare cuts are already underway under Obamacare.  President Obama’s position that no more entitlement cuts should occur will be politically popular, but economically unfeasible.

Nearly 60% of Americans do not favor Medicare cuts,

Of this salient fact, polls indicate no ifs, ands, or buts,

Little do people know, Medicare cuts are already in motion.

Medicare cuts are the main engine of the ACA’s locomotion.

Medicare cuts turn the Medicare screw by cutting its fiscal guts.

Sources

1.      The title of this post, “Turning the Screws on Medicare, “ is borrowed from the title of Chapter 10, ObamaCare Survival Guide, Humanix Books, 2013. 

2.      Margaret Agnes Carey, “Americans Want Deficit Addressed without Medicare Cuts,” Capsules KHM Blog, January 24, 2013.