Free Markets, Free People

Medicare


Can Doctors Afford To Stay In Medicare?

There’s a very interesting but probably little noted piece at Fox News by Dr. C.L. Gray, who is, interestingly enough, the president of Physicians For Reform. His general premise is that while reform is needed in the medical field, what Congress is chasing is not at all the answer. And he uses Medicare as the vehicle to make his point.

I’m sure you remember the story that came out not long ago about the Mayo Clinic deciding not to take anymore Medicare patients. If you’ve been staying abreast, that’s just a very well known clinic doing what a lot of lesser known clinics and doctors have been doing for quite some time. Gray claims that Mayo lost “840 million” caring for medicare patients.

He lays the physician trend away from Medicare to two overall reasons.

The first is simple—the math:

1) For the past decade Medicare consistently paid physicians 20% less than traditional insurance companies for identical service.

2) On January 1, 2010 Washington made hidden cuts to Medicare by altering its billing codes.

3) Medicare will cut physician reimbursement by another 21% on March 1. The CBO said this cut must take place if the Senate healthcare bill was to “reduced the deficit.”

4) Even more, Congress pledged to cut Medicare by yet another $500 billion. Again, the CBO said this additional cut must take place if the Senate healthcare bill was to “reduced the deficit.”

Many physicians were operating at a loss even before this series of massive cuts. In 2008, Mayo Clinic posted an $840 million loss in caring for Medicare patients. No businesses can survive when patient care expenses exceed revenue.

No business can survive operating at a loss, and that’s essentially what has been happening with Medicare prior to “reform”. With more cuts promised by “reform” it becomes a financial “no brainer”. We’re talking about a business decision. To remain a healthy business, and all practices are businesses, that which is causing a loss and overall negative drag on revenue has to be cut out to bring the revenue flow backto positive in order for the business to survive. That’s called a profit – something it would seem the government finds distasteful.  But profit is what allows you to serve your clientele with adequate and appropriate staff, treatment and equipment.  Mayo made that decision after it surveyed the impact of that particular group of patients on its bottom line and the impact of their removal. Obviously Mayo felt that continuing to serve that group, at the tremendous loss they were suffering, was effecting their overall ability to deliver the finest health care possible to the rest of their patients.

Expect to see more of that if “reform” is passed.

The second reason Gray gives is much less obvious than the first. But it provides just as powerful an incentive to ditch Medicare as does the first:

The second is more ominous—Washington’s increasingly abusive posture toward physicians.

President Obama reflected this attitude last summer. On national television, he stated as fact a surgeon is paid between $30,000 and $50,000 for amputating a patient’s foot.

In reality, a surgeon is paid between $740 and $1,140 to perform this unfortunate, but often life-saving procedure. This reimbursement must cover a pre-operative evaluation the day of surgery, the surgery, and follow-up for 90 days after surgery—not to mention malpractice insurance, salaries for clinic nurses, and clinic overhead. It is frightening to think our president is so wildly misinformed even as he stands on the cusp of overhauling American health care. But it gets worse.

Given massive federal deficits, Washington now faces increasing pressure to cut Medicare spending. One way to do this is to intimidate physicians into under-billing. To do this Washington intends to spend tax payer dollars to ramp up physician audits using Recovery Audit Contractors (RAC audits) to randomly investigate private physician’s Medicare billing.

Gray characterizes the RAC as unqualified bounty hunters and gives examples of his contention. The most egregious example is this:

For example, one patient the auditor alleged the group had “fraudulently” billed for was a man undergoing a chemical stress test. The allegation was the patient should have undergone a cheaper traditional treadmill stress test. The difficulty with this accusation was this man was a double amputee—he had no legs. This made a traditional treadmill test impossible. The auditors clearly were not trained health care professionals—they were bounty hunters. (It is worth noting the investigators are given legal immunity from a countersuit for conducting a “fraudulent investigation.”)

It is a good example because even the layman can appreciate why this particular case is so absurd. However, the doctors in question had to spend money to defend against this allegation of wrong doing. It brings up a critical point. One of the promises of “reform” is it will help remove the insurance company from between you and your physician. But as is obvious here, in a government plan such as Medicare, there is still someone between you and your physician who is no more qualified than some insurance drone.

The point, of course is that the drastically reduced Medicare payments to physicians coupled with increased meddling and second-guessing through RAC has driven doctors to a fish or cut bait point as it pertains to Medicare. They are forced into a business decision which requires them to give their practice a financial physical and cut out the portion which will cause the practice to die if not excised.

It is obviously a tough decision that I’d bet most doctors would prefer not to have to make, but as seen with the Mayo Clinic, they’re being driven to do so. This is the future of medical care if government runs it. Anyone who can’t see the rationing inherent in the “reforms” to Medicare is simply remaining willfully blind to the facts. Government must ration. And physicians must act in their own best self-interest. That means fewer physicians seeing more Medicare patients. The result is inevitable and as usual, the patients are those that will suffer.

~McQ


Health Reform Bill – Makes Bernie Madoff Seem Like A Piker

Today the Wall Street Journal asks what many of us have been asking for quite some time – why aren’t the numerous and specific warnings about the real cost and destructiveness of the proposed health care plan being heeded?

Of course the simple answer is those who are determined to take health care under the government’s purview really don’t care – they finally have the opportunity long denied them and they plan on taking advantage of it. So, much like the “science” of man-made global warming, they’ve picked their narrative, settled on it and will not entertain anything which might impede them from attaining their goal – government control of the health care market.

Those who’ve read this blog are very familiar with how Democrats have gamed the system (CBO’s statutory 10 year window) and used cheap accounting tricks (collect taxes immediately, don’t start paying benefits for 5 years – gives the appearance of bending the cost curve down) to make the case that they’re actually spending less on health care over the years and saving us from the bankruptcy they claim the status quo will eventually bring.

Another report, which I mentioned last week, carries a devastating warning about the plan being considered behind closed doors by Congressional Democrats. Yet it has received no major media exposure.

It is the Centers for Medicare and Medicaid Services (CMMS) report. And chief actuary Richard Foster is very candid about the impact of what Congress is planning. Not the smoke and mirror show Congress puts out there, but a peek at the reality of what Congress is proposing:

Richard Foster, the chief actuary for the Centers for Medicare and Medicaid Services, reports that under his analysis national health spending will rise under the bills by $222 billion over the next 10 years. In other words, ObamaCare really does “bend the cost curve”—up.

Even that estimate exists only on paper, as Mr. Foster has the honesty to admit. Because “most of the coverage provisions would be in effect for only six of the 10 years of the budget period, the cost estimates shown in this memorandum do not represent a full 10-year cost for the proposed legislation,” he writes. The report is punctuated by phrases like “unrealistic” and “doubtful,” and Mr. Foster adds that “the scope and magnitude of these changes are such that few precedents exist for use in estimation.”

Let’s stop right here with the obvious point to be made. The $222 billion, as mentioned, is the estimate for the next 10 years. However, as Foster points out, the spending would occur in only 6 of those 10 years. So that spending is offset by 4 years of revenue collection. If we remove that buffer and simply take 6 into 222 and then multiply it by 10, we’re most likely a bit closer to the real spending number than the contrived one – $370 billion, a difference of a mere $148 billion. Or, in reality, the $222 is a number that was tweaked to ensure when it was added to the other numbers the total fell below the threshold of $900 billion – the point at which it was claimed the cost curve would be bent upward. Had Congress found that to get to the number they needed they would have to collect taxes for 10 years and not provide benefits for 8 years, that’s how the bill would have been written.

It was never really about actually bending the cost curve down – it was all about creating the perception that the cost curve was being bent down, nothing more.

And there’s more to understand about that $222 billion number:

That $222 billion is a net figure, even after accounting for the fact that most of the newly insured—18 million people—will be dumped into Medicaid, “where provider payment rates are well below average.” And for the fact that ObamaCare is “paid for” only in the sense that Medicare’s payments to doctors are assumed in the bill to be cut by more than 20% this spring and even deeper after that, which will never happen in practice.

Mr. Foster adds that other planned Medicare cuts would damage doctors and hospitals: “Over time, a sustained reduction in payment updates, based on productivity expectations that are difficult to attain, would cause Medicare payment rates to grow more slowly than, and in a way that was unrelated to, the providers’ costs of furnishing services to beneficiaries.” This is how price controls would work in practice, even as Medicare has hit its spending targets only four times in the last 25 years.

Again, we know that Congress plans a “doc fix” which will amend the law to keep the 20% cut from taking place this year. And there’s nothing, given the history of this program, that argues that 20% cut will ever take place. It is a figure based on an assumption that will most likely never happen. Note well the last sentence – with an addition of 18 million new Medicaid insured, how many times in the next 25 years do you supposed Medicaid will hit its spending targets? You might also want to keep in mind that is mostly a federally mandated program administered by the states who share the cost. What will this addition of 18 million new insured do to state budgets – especially if the assumed cuts in payments are never made?

But let’s say Congress, somewhere along the line, finds the intestinal fortitude to cut those payments to providers as they say they are. What would be the impact?

He says many providers will be forced to stop accepting patients who are insured by the government, as opposed to those who have private coverage “with relatively attractive payment rates.” The resulting two-tier health-care system “should be considered plausible and even probable initially.”

If they cut, those patients they bring on may not be able to find a health care provider, so the patients suffer. If they don’t make the cuts, spending goes through the roof and the taxpayer suffers. It’s a lose/lose. But what should be patently obvious to anyone reading all of this is the $222 billion net spending claim by Congress for this particular part of the health care reform bill is as bogus as their promise of transparency.

Just delving into the particulars of this one portion of the bill should disabuse any objective person of the belief that what is being proposed is going to cost less than what we presently have. It is all a wretchedly wrought political façade designed to gain your support for long enough to pass this monstrosity. And my guess is should it pass, we’ll all be poorer and eventually sicker for its passage.

~McQ


Reid’s Compromise Plan – More Costly To Taxpayers

It would appear the “Gang of 10 (Senators)” compromise bill which Harry Reid has been touting but refusing to give details about would bend the cost curve way up:

Senate Democrats have provided few details about their latest health care proposal, but this much seems clear: Anyone who wants to buy the same health benefits as members of Congress, or to buy coverage through Medicare, should be prepared to fork over a large chunk of cash.

According to the Congressional Budget Office, a family of four earning $54,000 in 2016, when the health legislation is fully in effect, would be eligible for a subsidy of $10,100 to help defray the cost of insurance under the health legislation being debated by the Senate. By then, one of the most popular federal plans, a nationwide Blue Cross and Blue Shield policy, is projected to cost more than $20,000.

That could leave the family earning $54,000, slightly more than the current median household income, with monthly premium costs of more than $825.

The Democrats’ proposal would also allow some people ages 55 to 64 to “buy in” to Medicare, starting in 2011. That could cost about $7,600 a year per person or $15,200 for a couple, according to a budget office analysis of an earlier version of the concept. No subsidies would be available until 2014.

So why are many Democrats so “enthusiastic” over the proposal. Well, let’s knock off all the spin and be blunt about it:

“Extending this successful program to those between 55 and 64 would be the largest expansion of Medicare in 44 years and would perhaps get us on the path to a single-payer model,” said Representative Anthony Weiner, Democrat of New York.

That is the name of the game here and don’t ever loose sight of that. Liberals want a government run single-payer system. And whether they get there via a “public option” or expanding Medicare doesn’t matter one whit to them.

~McQ


Medicare Buy In: Worst. Idea. Ever.

What in the world are the Senate Democrats thinking?  Isn’t this supposed to be about “health care reform”?  Apparently their idea of reform is to take a system that has trillions of dollars in unfunded liabilities and expand it without ever addressing the underlying reason for the huge future debt?

Brilliant.  Just brilliant.

But apparently winning the process (passing something called “health care reform”) has become more important than the original purpose of “reform”.

This is just a stunningly bad idea, but one that seems to be generating some “enthusiasm” among Democrats and “progressives”:

Now, it appears, negotiators are making headway to ensure that the [Medicare] expansion would take place at a far quicker pace than any proposed public option. According to the well-placed source, Democrats are rallying behind a proposal that would allow a portion of the 55-64 year old age group to buy in to the Medicare system as early as 2010. By contrast, a public plan for insurance coverage would not come into being until 2014.

That group which would get immediate access, of course, would the the high-risk group that will cost the most to treat.

In addition to debating a potential start date for a Medicare buy-in proposal, Senate Democrats are also in negotiations over who, exactly, should be allowed to qualify for the expanded Medicare program. At this juncture, it doesn’t appear that everyone in the 55-64-age bracket would be granted access. Negotiators are considering limiting consumers to those who would qualify for high-risk insurance pools already set up under the Senate’s health care legislation. This would mean primarily those who have been uninsured for a certain amount of time, have a history of poor health or are unable to get insurance because of a preexisting condition. The Senate has already earmarked $5 billion for subsidies for this group to buy insurance and may increase that total to help them pay for Medicare coverage — should it become available to those under 65 and above 55 years of age.

Note that the subsidy is only to help this group buy insurance coverage under Medicare. It says nothing about the cost of that pool to Medicare. And, don’t forget, they’re cutting Medicare payments by $500 billion over then next 10 years.

Then, in 2014, they’re going to bring in the rest of that age group in total. And they’re going to tell you this will save money and “reform” health care?

What a load of horse apples. A little reminder for those who seem unable to remember or remain willfully ignorant:

According to the Medicare Trustees:

* Medicare’s expected future obligations exceeded premiums and dedicated taxes by $89 trillion.
* In other words, Medicare’s liability is about 5 1/2 times the size of Social Security’s ($18 trillion) and about six times the size of the entire U.S. economy.
* Throw in Medicaid, and health care spending alone will crowd out every other thing the federal government is doing by mid-century, says Goodman.

Yet to date, other than a claim they’re going to cut that $500 billion out of it – a claim I’d be willing to bet never happens – there is no recognition of the huge unfunded liability nor the fact that these additions they’re “negotiating” will simply swell it even more.

What does that mean to those starting to build a life for themselves now? Well, it isn’t pretty:

Future Payroll Tax Burdens. Currently, a 12.4 percent payroll tax on wages funds Social Se­curity and a 2.9 percent payroll tax funds Medicare Part A (Hospital Insurance). But if payroll tax rates rise to meet unfunded obligations:

* When today’s college students reach retirement (about 2054), Social Security alone will require a 16.6 percent payroll tax, one-third greater than today’s rate.
* When Medicare Part A is included, the payroll tax burden will rise to 25.7 percent – more than one of every four dollars workers will earn that year.
* If Medicare Part B (physician services) and Part D are included, the total Social Security/Medicare burden will climb to 37 percent of payroll by 2054 – one in three dollars of taxable payroll, and twice the size of today’s payroll tax burden!

Thus, more than one-third of the wages workers earn in 2054 will need to be committed to pay benefits promised under current law. That is before any bridges or highways are built and before any teachers’ or police officers’ salaries are paid.

That’s also before this latest hare-brained idea by the Democrats (adding another entire decade’s worth of people to Medicare).

Look, you don’t have to be a Harvard PhD to figure this out (in fact, it appears it’s better if you’re not). We are being again sold further down an unsustainable river by a bunch of yahoos who seemingly have no cognizance of the detrimental future impact of what they’re proposing.

Between the promises they’ve made with Social Security and Medicare/Medicaid, we’ll be broke before you know it:

* By 2020, in addition to payroll taxes and premiums, Social Security and Medicare will require more than one in four federal income tax dollars.
* By 2030, about the midpoint of the baby boomer retirement years, the programs will require nearly half of all income tax dollars.
* By 2060, they will require nearly three out of four income tax dollars.

And instead of fixing this, they’re now talking about adding to it and making it worse? If you need a picture (this is primarily for those Harvard PhDs who can’t seem to wrap their heads around the nonsense that’s being proposed) here you go:

1855

This is the mess the Democrats are “enthusiastic” about adding on too with trillions more in unfunded liabilities without addressing the necessary reform to “bend the cost curve down”. It is, in the truest sense, generational theft. It is unacceptable. It is obviously unaffordable and, unfortunately, they don’t seem smart enough to realize that.

This is an outrage and they need to know that they are so far afield on this that they’ve lost site of the goal – reform which makes health care more affordable. This monstrosity just gets more expensive as they “negotiate”.

Just kill it.

~McQ


Another Health Care Reform Myth Destroyed, But The Over All Deception Still Lives

One of the most persistent myths pushed by the health care “reformers” is that if you like what you have, nothing will change. Yes, friends, according to them, you can have something for nothing.

And nothing exemplifies the silliness of the claim than that which says Medicare recipients will continue to receive the same level of treatment they do now, but government will cut $500 billion from Medicare to pay for it.

For those that need it, a new study now makes official the fact that such cuts will indeed change the levels of treatment and benefits Medicare patients will receive. My guess is, this isn’t the “change” senior citizens voted for.

A plan to slash more than $500 billion from future Medicare spending — one of the biggest sources of funding for President Obama’s proposed overhaul of the nation’s health-care system — would sharply reduce benefits for some senior citizens and could jeopardize access to care for millions of others, according to a government evaluation released Saturday.

The report, requested by House Republicans, found that Medicare cuts contained in the health package approved by the House on Nov. 7 are likely to prove so costly to hospitals and nursing homes that they could stop taking Medicare altogether.

Congress could intervene to avoid such an outcome, but “so doing would likely result in significantly smaller actual savings” than is currently projected, according to the analysis by the chief actuary for the agency that administers Medicare and Medicaid. That would wipe out a big chunk of the financing for the health-care reform package, which is projected to cost $1.05 trillion over the next decade.

First, what happened to the reported cost of 894 billion when the bill first came out? Now it is being “projected to cost” 1.05 trillion – over the threshold. And, as everyone has been paying attention has said, the supposed savings will come at the cost of Medicare benefits for seniors.

In fact, according to this report, the cuts “would sharply reduce benefits for some senior citizens and could jeopardize access to care for millions of others”. Already low reimbursement rates cut even further would force hospitals and nursing home to reconsider taking Medicare patients at all.

No word if such cuts it will have any effect on this:

The government paid more than $47 billion in questionable Medicare claims including medical treatment showing little relation to a patient’s condition, wasting taxpayer dollars at a rate nearly three times the previous year.

Excerpts of a new federal report, obtained by The Associated Press, show a dramatic increase in improper payments in the $440 billion Medicare program that has been cited by government auditors as a high risk for fraud and waste for 20 years.

Look, there’s no question that Medicare, as structured, is going to break the bank. But then whose fault is that? It is and always has been a government run program, and it has about 50 trillion in unfunded liabilities in our future. So obviously that’s a program that badly needs reform.

But that wasn’t the point of the over all reform, was it? This was the “if you like what you have, you can keep it” reform. The point is that’s all a crock of rabbit pellets. This has nothing to do with leaving what exists alone – either on the government side (Medicare or Medicaid) or the private side (public option).

There’s more to the story though. The politics of this. What the Democrats in the House have presented is a bill which is so much smoke and mirrors it is embarrassing. Democrats know they have to get the number down in order to sell this travesty as not adding to the deficit. They also know how very important a demographic seniors are. So you have to look at this and ask, “are they really willing to risk their majority by making seniors mad? Are they willing to let themselves be defeated by making the hard decision to cut Medicare programs and effect senior’s Medicare benefits?

Of course not. It’s one thing to put it in a bill as a device to “balance” your spending. It’s another thing to do the actually cutting. And, if the “doc fix” bill is any indication, they have absolutely no intention of doing so:

So, to avoid its own prescribed draconian cuts in Medicare doctors’ payments, Congress goes through an annual Chinese fire drill to prevent its goofy formula from being implemented each year. As a budgetary matter, the accumulated cuts now amount to an automatic reduction in physician payment of 21 percent effective next year. That prospect has the professional medical organizations in a tizzy, and they are willing to do anything – anything, mind you- to avoid that fate worse than death, even to the point of formally embracing H.R. 3962, the gargantuan 2032 page House health care bill.

To lure the desperate doctors into bed with the liberals, their big ugly “public option” and all (analogously, a longer prison sentence, but better food and more yard time), the Congressional leadership included a “permanent fix” to Medicare physician payment in the original version of the 1018 page House bill, small increases, no cuts. But they carved it out because its cost made the House health care bill appear too expensive. So, to keep that version “looking cheaper”, they created another vehicle (H.R 3961), a companion bill, that would provide for a permanent Medicare “doc fix” at a ten year cost of $210 billion.

Or said succinctly – it’s all BS. Democrats not only intend to add to the deficit, they intend it in a big way, all the while telling us all lies about how it all stacks up as smoothly as the world’s most accomplished con artist. Is this the “change we asked for?”

~McQ


Deconstructing Health Care “Waste” Numbers

We found out recently that the government perpetrated myth that the health insurance industry were a bunch of “robber barons” was a load. So how about this point that it likes to push about “waste” in our health care system?

Well Reuters obligingly publishes an article today entitled, “Healthcare system wastes up to $800 billion a year.”

The estimate is actually 505 to 800 billion but why not go with the higher number when your “perspective” is to support government reform. Anyway:

The U.S. healthcare system is just as wasteful as President Barack Obama says it is, and proposed reforms could be paid for by fixing some of the most obvious inefficiencies, preventing mistakes and fighting fraud, according to a Thomson Reuters report released on Monday.

The U.S. healthcare system wastes between $505 billion and $850 billion every year, the report from Robert Kelley, vice president of healthcare analytics at Thomson Reuters, found.

“America’s healthcare system is indeed hemorrhaging billions of dollars, and the opportunities to slow the fiscal bleeding are substantial,” the report reads.

“The bad news is that an estimated $700 billion is wasted annually. That’s one-third of the nation’s healthcare bill,” Kelley said in a statement.

So now we have 3 numbers to go with telling anyone with an ounce of sense that they’re really not sure how much waste there is. But for the sake of argument, let’s stick with the 800 billion. Obviously they intend too because this is the sop they’re going to throw out there and claim it will “pay” for their “reform”.

The list is rather interesting. For instance:

* Fraud makes up 22 percent of healthcare waste, or up to $200 billion a year in fraudulent Medicare claims, kickbacks for referrals for unnecessary services and other scams.

200 billion or 25% (not 22%) of the waste comes from the portion of the medical system the government already runs. The same system which now saddles us with 52 trillion dollars worth unfunded future obligations.  To this point, the government has demonstrated absolutely no ability to curb such fraud or waste. In fact, it has never shown any interest or desire in tackling the problem.  Why should we believe they’re serious about it now?

* Unnecessary care such as the overuse of antibiotics and lab tests to protect against malpractice exposure makes up 37 percent of healthcare waste or $200 to $300 billion a year.

37.5% of additional “waste” comes from doctors protecting themselves from malpractice law suits. Yet there is nothing addressing tort reform in these bills. How, then, does what the administration and Congress are offering address this problem? It doesn’t. It would be a fairly easy fix – but they’re ignoring it.  It’s called special interest politics.

That means, to this point, 500 billion of the 800 billion dollars in “waste” are either unaddressed (tort reform) or have never been successfully addressed (Medicare).

* Administrative inefficiency and redundant paperwork account for 18 percent of healthcare waste.

Ever talk to a doctor about the administrative hoops one has to go through to get Medicare to pay for service. Certainly private insurance can be a hassle as well, but there are few if any doctors who won’t treat patients with private insurance while there are a whole host (and growing) who won’t treat Medicare patients. Or said more succinctly – it’s mostly a government paperwork problem.

* Preventable conditions such as uncontrolled diabetes cost $30 billion to $50 billion a year.

And that may or may not be helped by more preventive medicine – there are very mixed reviews on how cost effective it really is. However, even if it did a 100% better job than is now being done (which is extremely unlikely), a) it won’t cost less and b) it still remains up to those needing such treatment to seek it out. Regardless, at most it is 6% of this 800 billion in “waste”.

In summary, the government is responsible for 25 – 40% (add in about 15% of that admin number).  Malpractice avoidance – something they could fix or at least lower with tort reform – accounts for 37.5% of the total.  Preventable conditions may or may not constitute the final 6% described here. That leaves 14% or in undocumented waste, probably broken down in numerous smaller categories that are going unaddressed.

What this all means is government could clean up its own mess and cut waste to 600 billion, pass tort reform and cut it to 300 billion, make Medicare easier for doctors to administer and cut it to about 150 billion.

Instead we’re stuck with an attempt at a complete overhaul with the government trying to sell us on the idea that the problem is with the private sector and giving government more power over health care is the cure.

The cognitive dissonance is so loud you have to wear earplugs.

~McQ


Public Option? Call It Medicare For Everyone

Well, the cat is finally out of the bag:

House Democrats are looking at re-branding the public health insurance option as Medicare, an established government healthcare program that is better known than the public option.

The strategy could benefit Democrats struggling to bridge the gap between liberals in their party, who want the public option, and centrists, who are worried it would drive private insurers out of business.

While much of the public is foggy on what a public option actually is, people understand Medicare. It also would place the new public option within the rubric of a familiar system rather than something new and unknown.

Everyone knows introducing a Medicare type program into the “public option” will indeed increase “choice and competition”. It will also do what?

Oh, yeah – swell the already unimaginable 52 trillion in unfunded liabilities by tens of trillions of dollars. I mean it should be obvious even to the economically unsophisticated that they just do a bang up job with the Medicare they have had.  Single-payer, here we come.

But don’t worry – it won’t cost you a dime in extra taxes and it won’t add a dime to the deficit.

Really.

He promises.

Hope and change.

~McQ


This Is Why Obama’s Health Care Support Continues To Erode

Along with his credibility.  When the House bill on health care (H 3200) came out, anyone who read the bill, to include Republicans, noted that it planned to pay for much of what was offered through Medicare cuts. And, in speeches and talks following that, President Obama said that he wanted to “end subsidies” to Medicare Advantage, a Medicare supplemental program very popular with those using Medicare (because it covers what Medicare doesn’t).

Even the CBO has come out, as noted yesterday, and said what President Obama is talking about when it comes to Medicare will cut the level of benefits for Medicare users.

Be that as it may, and as he has in many things, he claims everyone else is wrong, he’s right and those disagreeing with him are simply doing it for political purposes. In talking points distributed by the White House today, they say:

Talking Points: Republicans’ Disingenuous Scare Tactics on Medicare

• Recently, as part of an ongoing effort to revive their political fortunes by killing health insurance reform, many Republicans have been attempting to scare America’s seniors with false myths about what reform would mean for Medicare.

• These distortions and outright falsehoods would be offensive under any circumstances, but they’re especially disingenuous coming from a group who has a long history of opposing Medicare and who very recently tried to kill the program as we know it.

• Just this past April, nearly four-fifths of Republican House members voted to end Medicare as we know it by turning it into a voucher program that provides a fixed sum of money to buy private insurance.

• And this most recent assault on Medicare is just the latest in a war Republicans have been waging on the program for decades.

They also attempt to spin away the CBO finding that benefits will indeed be cut and they further attempt to justify the Medicare Advantage cuts.

But this just isn’t selling to those at whom it’s aimed.

Gallup reports that seniors 65 and older are the demographic with the largest percentage against the reform being offered. By a margin of 10% (42% to 32%) they oppose it.

I think it is pretty safe to say that seniors, at this point, don’t trust the Democrats and certainly aren’t now going to buy into the old “Republicans are using scare tactics” canard. Nor are seniors going to be mollified by claims that Medicare Advantage “overcharges” and therefore should be eliminated.

I’ve talked about the erosion of independent support for the administration and Democrats in general. If the Democrats want to ensure a minority in the Congress in 2010, continue to alienate the seniors as they are presently doing and they’ll get their desire. And that might also mean 2012 won’t be looking so hot for them either.

This is a demographic which knows their issues (especially health care) and votes them. Screw with this program (and yeah it’s ironic that we’re talking about leaving a government program alone, but again, since they don’t have a choice, that says nothing about its quality or efficiency) and you can almost bet the house (pun intended) that 2010 will find a new majority in one of the chambers of Congress.

~McQ


The Fantasy Of BaucusCare’s Savings

There are a number of people dancing in the street because there’s finally a bill in existence that the CBO says will reduce the deficit. Not by much, but that’s really irrelevant – it does the job that meets one of President Obama’s primary goals.

Of course the plan, authored by Sen. Max Baucus, has also come under fire from both the right and left for various aspects each doesn’t like. But that CBO endorsement, well, they’re pretty happy about that.

However, a close examination of that endorsement should warn everyone with an understanding of politicians and Congressional history off of the plan.

Let me explain. While the CBO does indeed say this plan will reduce the deficit, it makes it very clear that such a reduction is contingent upon some very unlikely happenstance.

First the savings:

[T]he Chairman’s proposal would reduce the federal deficit by $16 billion in 2019, CBO and JCT estimate. After that, the added revenues and cost savings are projected to grow more rapidly than the cost of the coverage expansion. Consequently, CBO expects that the proposal, if enacted, would reduce federal budget deficits over the ensuing decade relative to those projected under current law, with a total effect during that decade that is in a broad range around one-half percent of GDP….

Now that which is very, very unlikely:

These projections assume that the proposals are enacted and remain unchanged throughout the next two decades, which is often not the case for major legislation. For example, the sustainable growth rate (SGR) mechanism governing Medicare’s payments to physicians has frequently been modified (either through legislation or administrative action) to avoid reductions in those payments. The projected savings for the Chairman’s proposal reflect the cumulative impact of a number of specifications that would constrain payment rates for providers of Medicare services. The long-term budgetary impact could be quite different if those provisions were ultimately changed or not fully implemented.

The Baucus plan, just like the House plan, derives the majority of its “savings” in cuts in Medicare spending. However, as Peter Suderman at Reason’s Hit & Run explains, the likelyhood of those cuts ever being made, at least to the point necessary to reduce the deficit, is poor at best. Why?

Because of the mechanism the bill uses to make them:

It’s true that the Baucus plan, which creates a commission to figure out how to cut Medicare costs, sets up a slightly more robust framework for cost-cutting than currently exists. But that commission still only gets to make recommendations, and Congress still has the power to block them.

To review – in order to meet the CBO numbers, the bill must be enacted and remain unmodified for two decades. And, Congress must enact the Medicare cuts to the level required of the bill to achieve those reductions.

I ask you – what would you bet on either of those things actually ever coming to pass?

~McQ


Two Reasons Americans Don’t Want Obamacare

While the rest of the nation ponders whether Kanye West is a “jackass” and President Obama was correct in calling him that, I’ve been thinking about why the Democrats and Obama are having such a tough time selling their health care proposals.

Obviously part of the push back by the people has been because of the recession. Common sense says you don’t exacerbate a bad financial situation by adding debt. Nothing anyone has claimed about the “health care savings” reform would bring has resonated with the public. That’s because people don’t believe or trust the rosy estimates that Democrats have used. And of course it hasn’t helped that the CBO has shot down just about every one of their claims as well.

In fact it looks a lot like 1993 all over again according to an ABC/Washington Post poll released today:

Sixteen percent of the respondents to the most recent poll say their health care would improve if the proposed changes are enacted, and 32 percent say their health care will be worse if that happens.

By comparison, the same poll in late September of 1993 found 19 percent saying their health care would improve and 31 percent saying it would get worse.

Even deploying Obama to use his vaunted oratorical skills to turn the tide hasn’t worked according to another poll:

A USA TODAY/Gallup Poll taken after the president’s dramatic address to a joint session of Congress last week shows Americans almost evenly divided over passing a health care bill and inclined to think it would make some of the system’s vexing problems worse, not better.

Six in 10 say Obama’s proposal, if enacted, would not achieve his goals of expanding coverage to nearly all Americans without raising taxes on the middle class or lowering the quality of health care. For the first time, a majority disapprove of the way he’s handling health care policy.

So what’s the problem? Why does public opinion seem so dead set against what Democrats feel is beneficial legislation for all?

Well, what Obama and the Democrats are running up against is the same problem Bill Clinton et. al experienced. People, for the most part, are quite satisfied with the insurance they have and don’t want to chance government messing that up. And they understand that the chance of government messing it up, given how government does most things, is very high.

Although polls have consistently shown that just over half of Americans think the health-care system is in need of reform, a substantial majority say they are satisfied with their own insurance and care. Any hope of change will require their support, according to experts and advocates across the ideological spectrum.

“They are critical,” said Drew E. Altman, president and chief executive of the Kaiser Family Foundation, a nonpartisan health research organization. “This debate will turn on people like this trying to answer the question ‘Will this benefit my family?’ “

Most are concluding it won’t benefit their family and, in fact, may end up being detrimental to them.

Democrats seem to be missing the point that while health care reform is popular, their version of health care reform isn’t. I guess health care reform somewhat resembles porn – the people will know it when they see it. But they’re not seeing it in the proposals the Democrats are offering right now – and that is why there’s this massive push back.

The majority of those opposed do not believe the claims that nothing will change pertaining to their health care. It simply doesn’t makes sense to them that the scope and goals of the change being discussed won’t effect their coverage.

Then there are the seniors:

One of President Obama’s biggest challenges this fall will be persuading seniors to accept his healthcare proposals. Many elderly voters are deeply worried about “Obama-care” because they fear that his plans will reduce their coverage and increase their costs. Seniors, in fact, are more opposed to Obama’s healthcare ideas than any other age group.

Of course the irony, as pointed out any number of times, is that most seniors are on a government program. Rarely pointed out is the fact that they have no choice in the matter. Consequently those who love to point this out and crow about how seniors “like” their government insurance never follow that up with the fact that seniors are forced into a system which may or may not have been their first choice.

But that aside, seniors don’t like change. And, they’re smart people who understand that they are the demographic that spends the most on health care. Given that understanding, when the goal of “cutting costs” is put forward as a primary goal of the reform being discussed, they know where those cuts are most likely to be made.

But they have developed a deep skepticism toward Obama’s agenda of expanding the reach and power of Washington. They basically agree with the conservative attack that he is a liberal zealot who wants to inject the government into every nook and cranny of American life—including everyday decisions about the choice of doctors and medical plans, pollsters say. Some seniors specifically fear that the healthcare overhaul will take money away from their cherished Medicare program, and they don’t want to take that risk.

Only 35 percent of people 65 and older approve of Obama’s handling of healthcare, according to a Washington Post/ABC News poll in August …

Their defense of a government medical insurance program for themselves and their skepticism of further government intrusion into our lives isn’t quite as contradictory (or ironic) once you understand the whys and wherefores of the mandatory nature of Medicare. Seniors aren’t interested in more government or the chance that the only insurance available to them will be cut to meet a savings goal.

Those are how the planets are lining up in the health care reform universe. Obama and the Dems aren’t succeeding in convincing the skeptics with their arguments. In fact, as it drags on, more skeptics are being born than believers.

The answer, devoid of politics, seems clear. Stop the process right now, reset the debate and actually have one. Find out what “reform” means to the public and act on that consensus. It may end up merely insuring those without insurance. It may be that and tort reform plus opening up the intra-state private insurance markets and eliminating mandates. Or more. Or less. But what should be clear to both the Democrats and Obama at this point is it is not what they’re offering.

The danger to them (electorally) and to us (reduction of liberty) is they’ll disregard that in the name of politics and ram through something we’ll all regret but find difficult get rid of once passed.

That’s what I fear and it appears that’s what some on the left are prepared to do. They have waited too long and have too much invested politically to back off now.

~McQ

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