A $455 billion reduction in Medicare spending without benefit cuts? A look at the CBO numbers
by George Bennett | March 22nd, 2010How do you find $455 billion in Medicare savings without cutting benefits to seniors?
The health care legislation approved by the U.S. House of Representatives Sunday assumes Medicare spending will increase by $455 billion less than current projections over the next decade, but the bill’s supporters insist seniors won’t see a reduction in benefits.
The issue has especially big political consequences in senior-heavy South Florida.
The Medicare cuts are key to Democrats’ claims that the $940 billion health care bill will actually reduce the deficit by $138 billion over the next decade. But a look at the Congressional Budget Office estimates raises questions about whether Medicare savings of that magnitude can be achieved.
CBO Director Douglas Elmendorf, in a Saturday letter to House Speaker Nancy Pelosi, notes that the Medicare estimates are based on an assumption that “payment rates for physicians’ services in Medicare would be reduced by about 21 percent in 2010 and then decline further in subsequent years.”
Such reductions are the result of a Medicare “sustainable growth rate” formula that is built into law but routinely overridden by Congress.
A separate House bill sponsored by influential U.S. Rep. John Dingell, D-Mich., would increase physician payments by 1.2 percent in 2010 and change the Medicare reimbursement formula beginning in 2011. That bill, known as the Medicare “doc fix,” would cost an estimated $208 billion over 10 years and turn the health care bill’s advertised $138 billion in deficit reduction into a $59 billion increase in red ink, according to CBO.
Aside from the unlikelihood of deep cuts to physician payments, CBO notes that the health care bill assumes that “ongoing productivity improvements” will hold many Medicare cost increases below the rate of inflation over the next decade and that a new Independent Payment Advisory Board will be “fairly effective” in finding other efficiencies.
The health care bill calls for Medicare spending to increase “significantly more slowly during the next two decades than it has increased during the past two decades,” Elmendorf notes.
Elmendorf continues: “It is unclear whether such a reduction in the growth rate of spending could be achieved, and if so, whether it would be accomplished through greater efficiencies in the delivery of health care or through reductions in access to care or the quality of care.”
Between now and the November elections, expect Democrats to tout the “greater efficiencies” possibility while Republicans emphasize the possibility of reduced access and quality.
Where's the money? Use The Post's interactive database of who wants and who's getting federal dollars.
Use these interactive graphics to find and contact Palm Beach County and Treasure Coast legislators.
March 22nd, 2010 at 11:40 am
I can’t wait for November…. I want to see every pinhead who voted for this monstrosity of a bill to get “FIRED” by their electorate.
March 22nd, 2010 at 11:51 am
There is diminished likelihood that Medicare “savings” can be achieved. Health Care expenditures tend to increase over time (not decrease). With the steady growth of Florida’s Medicare recipient population and general inflationary tendencies in the Health Care sector, it stands to reason that “A $455 billion reduction in Medicare spending without benefit cuts?” is a solid question that deserves a sound answer. To date, that answer has not been provided to Floridians and Americans.
Sincerely,
Marion D. Thorpe, Jr. MD MPH
doc@marionthorpe.com
March 22nd, 2010 at 11:53 am
A day after the fact, the PB Post tells it’s readers the truth…
A day late and a dollar short
March 22nd, 2010 at 11:57 am
As a Presidential candidate Barack Obama said: “Maybe they should take a pill.” He meant it. For these savings to be real our most frail Seniors will need to make the ultimate sacrifice.
Sid
March 22nd, 2010 at 12:07 pm
Show me the Efficiencies…
(and until you have the political will to pay for the bill, don’t pass it! DUH — buy now, pay later got us into this mess…)
Also, why not look into the promised premium subsidies for low income people under the mandate? They conveniently dry up a few years in, meaning the “low income” are now required to buy insurance on their own (low income) dimes.
No thanks. Pro choice in healthcare — take out only policies you can afford; catastrophic w/huge deductibles.
March 22nd, 2010 at 12:08 pm
Amen, Mad Mike.
March 22nd, 2010 at 12:28 pm
The Democrats saying they will reduce Medicare costs over the next decade by $455 million with no reduction in services or quality is a complete joke. Reductions in physician reimbursement will not happen. Other savings will never materialize. They even folded the Student Loan takeover into this bill because it would supposedly reduce costs by $19 billion over the next decade. Does anyone really think the Democrats numbers are honest?
March 22nd, 2010 at 1:50 pm
Former Florida House Speaker Marco Rubio for now runs well ahead in a three-way race for the U.S. Senate in Florida, should Governor Charlie Crist decide to run as an independent.
The first Rasmussen Repots telephone survey of a potential three-candidate Senate race finds Rubio earning 42% support from likely voters in the state. Democrat Kendrick Meek picks up 25%, and Crist runs third with 22%. Eleven percent (11%) are undecided.
Rubio gets 53% of the male vote, while female voters are more evenly divided among the three candidates.
Sixty-six percent (66%) of Republicans favor Rubio in a three-way contest, while 20% of GOP voters prefer Crist. But Crist also earns 21% Democratic support. A solid plurality (47%) of voters not affiliated with either party favor Rubio.
March 22nd, 2010 at 1:59 pm
Thanks for giving your analysis AFTER the bill passes and your opinions in support of the bill BEFORE it passes. These cuts have been pending for about a year.
March 22nd, 2010 at 2:12 pm
I suppose since Obama made the comments late last year about the Veterans medical benefits (You know the one where they didn’t deserve any special treatment because they knew what they were getting into when they volunteered!) he will now be closing all the VA hospitals or converting them into care facilities for illegal aleins.
Maybe better yet he can convert them into abortion clinics and say on the cost of government paid abortions.
March 23rd, 2010 at 6:37 am
If the 21% physician reimbursement goes thru, we will see more physicians retiring early. How many businesses can sustain a 21% cut in income while expenses continually increase?
March 23rd, 2010 at 8:46 am
Dems have filibustered, blocked or just ignored the MMA 2003 required doctor fee reductions. The new Trustees for the Medicare Supplemental Trust Fund are quite candid they believe the Unfunded Liability projections are 21% deficit BECAUSE Congress has no intention of actuall honoring the law as written… (yes, those trustees include Tim Geithner, Kathleen Sebelius and two other BARAMAcare sympaticos…)
Typical of the PBP not to allow any real glimpse into any “news” containing facts about real issues – only stale and late into a political blog….
…even Pravada sparkles in a few actual facts into its party news!!
March 23rd, 2010 at 10:26 am
free healtcare