There has to be more to the Democrats’ 400 billion dollars in Medicare cuts than just saving money on purchasing drugs. That would only add up to 112 billion dollars. So how did they plan to make the rest of the missing 288 billion dollars in cuts? Here are a few possible sources for answers:
In a Politico article, “No Medicare Hit For Seniors? Good Luck with that.” (By Jennifer Haberkorn & Paige Winfield Cunningham.), the authors reviewed possible significant cuts to Medicare which might approximate the cuts demanded by the Republicans and proffered by the Democrats, although undefined by the latter. Their basic theme is that if either party claims that Medicare can sustain significant cuts without reducing benefits to recipients, they are being unrealistic. (I cannot access a link to their article because it is behind a paywall.)
There is another document available on the internet which does outline cuts to Medicare: The Senior Protection Plan by the Center for American Progress. The Orwellian title (Those sound like ’broken promises’ to seniors to me.) belies facts regarding the billions of dollars involved in each of the proposed cuts. The 49 page “deficit hawk” document is worth reading, if only to convince you that the Beltway wizards think they have a real plan. However, Haberkorn & Cunningham demonstrate the long-range implications for these proposed cuts: either beneficiaries are hit with higher copays, deductibles, premiums, and have difficulty finding insurance coverage if eligibility age is raised; or providers are zapped with reduced payments for doctors services and hospital services. If eligibility age is raised to 67 from 65 (not in the broken promises to seniors plan/s) there would be 148 billion dollars in ‘savings’, reduced by higher costs in other government healthcare programs. It would raise medical costs for those reluctantly buying insurance in the private market. In addition, in another significant cut, pharmaceutical companies would have to agree to significant cuts around 112 billion dollars. Other smaller cuts to Medicare cuts would reduce payments for training future doctors (residencies) and payments to hospitals serving special underserved zone hospitals, such as those in rural areas. The CAP plan makes cuts sound all so painless, but the healthcare analysts show that cuts have real consequences for patients and providers.
The most significant change to Medicare found in the Orwellian “Senior Protection Plan” was a strategic move to place Medicare patients into a statewide form of HMO managed care. While advertised as more care for less money, I would describe this as the “least amount of healthcare imaginable”, especially as the organization receiving the total payment can skim 60% of the savings of not providing care they were paid to offer.
Here’s a quote:
Under the Affordable Care Act, teams of providers can form “accountable care organizations” that are accountable for all of a patient’s care. Medicare sets a target for Medicare spending for each accountable care organization. If actual spending falls below the target, accountable care organizations can keep up to 60 percent of the savings. They must meet performance targets on measures of the quality of care, and can keep higher shares of savings for higher performance.
Similarly, at a macro level, states should have the option to form “accountable care states.” Accountable care states would have a global target for all health care spending by both public and private payers. They would be encouraged and empowered to achieve savings by implementing innovative payment and delivery system reforms (including reforms to scope of practice), price transparency initiatives, and administrative efficiencies. Accountable care states would receive enhanced flexibility and implementation grants to develop and implement savings plans.
If actual health care spending falls below the global target, states would be eligible for substantial bonus payments. To receive bonus payments, states would need to meet performance targets on publicly reported measures of cost, quality, and access—and would receive higher bonus payments for higher performance. “
The other insidious reduction made is to Medicaid by mandating that HMO’s in Medicaid stick to a competitive bidding process instead of receiving a fixxed payment from States (which currently sets the standard of care). Folks, this is a race to the bottom. 71% of people in Medicaid were placed into managed care programs (as per a 2010 50 State study.) Two-thirds of the studied States reported that their members had trouble accessing services. The new healthcare law makes Medicaid available to uninsured people under 133% of the FPL. In a healthcare setting reduced through competitive bidding, and with restricted care through managed care systems, more access to Medicaid does not sound desirable or even safe for medical patients.
Reinforcing that this is the Democrat’s plan is the subsequent Tax/Spending reform report, out today, from CAP, which includes 385 billion in cuts, identified as those described above. Spending cuts begin on Page 17. Jared Bernstein, former Obama Administration economist, rolls out the CAP plan as the ‘progressive’ plan in a HuffPo post HERE. This is a classic bait-and-switch, because within this Tax reform/fiscal cliff plan lurks the “Senior Protection Plan”.



9 Comments

Raisng the ae to 67 is a death sentence for many. It seemed like my spouse and I might make tit to be 65 and then get some MediCare needed health care. Upping it by two years means we have to hang in therir fore stalling our needed care for another 24 months.
Buty htank yo for at least offering us a place to read up about the doom and gloom./ When I try to point out to people how broken the government and our Congressionalleaders are, I am often told “it’s not as bad as yousayit is.” Now I have somelinks to offer them.
And adding those links and your comments (BELOW) so I can access readily through my activity page here at FDL:
details on “cuts to Medicare: The Senior Protection Plan by the Center for American Progress. The Orwellian title (Those sound like ’broken promises’ to seniors to me.) belies facts regarding the billions of dollars involved in each of the proposed cuts. The 49 page “deficit hawk” document is worth reading, if only to convince you that the Beltway wizards think they have a real plan. However, Haberkorn & Cunningham demonstrate the long-range implications for these proposed cuts: either beneficiaries are hit with higher copays, deductibles, premiums, and have difficulty finding insurance coverage if eligibility age is raised; or providers are zapped with reduced payments for doctors services and hospital services. If eligibility age is raised to 67 from 65 (not in the broken promises to seniors plan/s) there would be 148 billion dollars in ‘savings’, reduced by higher costs in other government healthcare programs. It would raise medical costs for those reluctantly buying insurance in the private market. In addition, in another significant cut, pharmaceutical companies would have to agree to significant cuts around 112 billion dollars.”
Good luck to you and your husband in obtaining medical care as you face the future. The list of the sponsors of the CAP recommendations is loaded with Wall Street former executives. Why the CAP plan should be described by Democrats as ‘their plan’ is beyond me. The whole phoney tax rise crisis and these draconian cuts are not getting honest coverage. Raising MA eligibility age to 67 was in Obama’s 2011 debt-ceiling negotiations offer, so Durbin, Kerry, Hoyer and others may try to float it again. The pattern has been for Obama to ‘secret away’ the cuts in guised form: the chained CPI is such a mechanism, which can be touted as ‘savings’ through changing the formula for benefits, while all the while denying that benefits will be reduced. So shifting MA to an HMO structure would also be a path to deny that they are making cuts, while they are reducing payments to providers who would be rewarded for reducing medical services utilized. The pols could claim ‘greater efficiencies’ while the dirty work of denying care would be done for profit by the HMOs.
HELL of a diary, thanks Mr. Englehardt for all these.
Rcc’d, of course.
The dirty little secret. Those bad things happen only if medical system CEOs don’t get the message that they can’t keep inflating their $1 million salaries; if specialists don’t learn that a medical degree is not an unlimited license to print money; if there is no anti-trust action to force competition in the medical equipment, medical device, and medical supply industry; and if the cost of health care continues to discourage seniors from getting the preventive and primary care that can prevent large-expense illnesses. An increase in the Medicare eligibility age means even more people postponing care. Someone should do a cost model about whether decreasing the Medicare eligibility age counterintuitively decreases cost because of better access to preventive and primary care.
The deductible and co-pay nonsense is a huge issue as is the creative coding in a fee-for-service billing system. Providers can adjust the billing code to avoid delivering services without co-pays.
The dirty little secret abuot Medicaid is the large number of relatives of middle class families whose nursing home care is subsidized by Medicaid.
Despite the Affordable Care Act (or perhaps because of it) politically we are on a path that only ends with single-payer Medicare for All. It will probably take more folks’ employers dropping healthcare benefits before we get there, but that is also coming.
It is possible to cut Medicare costs by that amount, but not by having business as usual or by adopting another unregulated private model (managed care).
Markets allocate scarce resources by ability to pay. If you want to ensure that everyone has access to something, a market is the wrong way to deliver the services.
Whoops, on my part, thanks Kelly Canfield. NOT Englehardt, NOT TomDispatch, but Tom Thumb, and indie as I know it.
I fully concur with the basic premises of his diary, tho. If we don’t eliminate the middle men, and the actuaries, and make healthcare a single payer, government funded and run issue, then we will slowly die, or die quicker n we want to.
Delaying eligibility is “incremental privatization.”
Usually our little folks’ complaints about how we die get little notice, so when I read your comment I was reminded of this tragic result of austerity’s cuts on the British NHS: They are back to pre-WW II conditions in their hospitals. This woman’s husband died in a packed room with no attempt to send him to the ICU.
http://www.telegraph.co.uk/health/healthnews/9721900/Senior-MP-Ann-Clwyd-says-her-husband-died-like-a-battery-hen-in-hospital.html
This comment is in response to wigwam’s privatization comment in #6:
Whether it is by extracting profit for themselves from private ACA health exchanges, or just plain private insurance companies selling insurance to individuals, they are milking a public good, the Medicare program to build their own ‘wealth’. It is the same function when they extract profits by keeping as bonuses, 60% of unspent HMO payments from Medicare. The goal is to exploit a monopolized relationship with a government program, with guaranteed returns, paid for from reduced medical services to individuals. They extract their profits by not providing medical care.
Privatization means privatizing money from premiums we paid for retirement healthcare, by denying us retirement healthcare.
This liberal enabler implicitly endorses cuts by not opposing them, while ignoring the most egregious changes in the CAP plan, embracing the 2 year rise in MA eligibility age as possible.
Is this the cave of the Democrats on cuts which Glenn Greenwald anticipated?