Monday, August 27, 2012

Health Care Reform News and Information You Can Use - 8/27/12

Liability and Health Reform Update:

Health Care Reform News and Information You Can Use

August 27, 2012

Editor, Donna Baver Rovito

This periodic compilation of news and information about health care reform relies on numerous sources for the stories health care professionals and concerned citizens need to be well informed.

Periodic opinions or political comments are the editor's and the editor's alone and appear in blue italics. This eNewsletter is not affiliated with or financially supported by any advocacy organization or political candidate or group.

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((These daily article and policy analyses from this policy analyst for the Senate Republicans Joint Economic Committee are some of the best available. Yes, they're partisan. But they're also factual. Following are about two week's worth.))

Daily Reports from:

Chris Jacobs, Senior Policy Analyst, Joint Economic Committee, Senate Republican Staff

What Are Obama's Secret Post-Election Plans...? - 8/27/12

Two articles in today’s Wall Street Journal illustrate how President Obama is putting politics before policy – deliberately failing to lead on tough fiscal choices to score cheap political points. One news article notes that the White House has put together a secret deficit reduction plan, which it refuses to release to the American people:
President Barack Obama's most recent budget…[did not] detail how to slow the growth of spending on Medicare or Social Security. Nor has Mr. Obama made public the details of proposals he made in unsuccessful talks with House Speaker John Boehner (R., Ohio) last summer, such as raising the eligibility age for Medicare from 65 to 67, a notion both Mr. Romney and Mr. Ryan have endorsed.
Administration officials are preparing new deficit-reduction proposals to be released if Mr. Obama is re-elected, but see no political advantage in previewing them now, people familiar with the process said.
Likewise, an excellent editorial in this morning’s Journal about the Administration’s plans for top-down government health “reform” notes that the White House has refused to name individuals to Obamacare’s Independent Payment Advisory Board “until after the election.”

So we’ve gone from a world in which candidate Obama repeatedly promised that he would hold all the negotiations on C-SPAN to one in which tough choices are deliberately being withheld from the American people for political reasons, and a world in which the President’s pledge that “we are implementing” Obamacare right now doesn’t apply to the supposed centerpiece of its attempt to control costs – because of the backlash that exposing the law’s coercive nature would generate. Hope and change indeed.

President Obama's Two-fold Dishonesty on Cutting Medicare Benefits

8/27/2012 12:02:07 P.M. Eastern Daylight Time

Amidst the debate on the campaign trail, there’s been a lot of heated rhetoric of late about Medicare “benefits” and who’s doing what (or not) to them. For instance, in a recent speech the President said that “I've proposed reforms that will save Medicare money by getting rid of wasteful spending in the health care system. Reforms that will not touch your Medicare benefits.”

There’s only one problem: That statement is flat-out FALSE. The President HAS enacted cuts to Medicare benefits – namely, additional means-testing in Obamacare – and proposed even more Medicare benefit cuts. For instance, in his budget submitted to Congress this spring, the President proposed:
· Increasing means-tested premiums under Parts B and D by 15%, and freezing the income thresholds at which means testing applies until 25 percent of beneficiaries are subject to such premiums;
· Increasing the Medicare Part B deductible by $25 in 2017, 2019, and 2021;
· Introducing a home health co-payment of $100 per episode in cases where an episode lasts five or more visits and is NOT proceeded by a hospital stay; and
· Imposing a Part B premium surcharge equal to about 15 percent of the average Medigap premium – or about 30 percent of the Part B premium – for seniors with Medigap supplemental insurance that provides first dollar coverage.

The problem is not necessarily the policy proposals for these particular benefit cuts, which many may find meritorious. The Medicare Payment Advisory Commission (MedPAC) has previously recommended introducing home health co-payments as a way to ensure appropriate utilization. Congresses controlled by both Republicans and Democrats have enacted some (limited) means-testing in Medicare. And Medigap reform has been an element of bipartisan proposals to extend Medicare’s solvency and make the program more efficient.

Instead, the fundamental problem is the President’s twofold dishonesty when it comes to cutting Medicare benefits. First, in saying that he hasn’t proposed cutting Medicare benefits when he has. Second, and just as importantly, in the way he has proposed cutting those benefits – all the benefit changes the President proposed in his budget would not take effect until 2017, after he leaves office. Just like with the Cadillac tax – scheduled to take effect in 2018 – or the massive changes to Exchange insurance subsidies that will make health care less affordable after 2019, Barack Obama wants to give away all the government “goodies” while he’s in office – and stick the next President with the bill after he leaves. That’s not leadership; that’s the antithesis of leadership.

CBO Report Exposes Record of Obamanomics - 8/22/12

The Congressional Budget Office released its updated economic forecasts this morning and, today as before, the results reflect the Obama Administration’s “stewardship” of the economy. In the health care sector, CBO made some significant updates to its baseline, reflecting both economic and technical changes. With respect to the former, because economic productivity has lagged, and because most Medicare payment rates for hospitals and other providers are linked to “market-basket” updates of goods and services, CBO raised projected Medicare spending based on this economic factor. From page 52 of the report:
CBO’s current projections of productivity are lower than they were in its previous forecast, and its projected prices for goods and services (including the cost of both labor and non-labor inputs) are now higher. Consequently, CBO now anticipates higher payment rates for Medicare than it forecast in March, a change that raises projected outlays by $136 billion (or about 2 percent) over the 2013–2022 period. In the Medicaid program, higher projected prices for medical services and the cost of labor are also expected to boost spending, by $27 billion, between 2013 and 2022.

Admittedly, CBO made a larger downward adjustment ($169 billion) in projected Medicare spending, which it termed a technical adjustment to reflect the current slowdown in health spending. However, the Medicare actuary and others have said much of this slowdown is linked to the poorly recovering economy – which means spending could pick up whenever the economy fully recovers.

Either way, however, the report reflects an indictment on the Obama economy – lower productivity growth raising Medicare spending, offset only by people cutting back on health expenditures because they can’t afford to go to the doctor. That’s not evidence Obamacare is working – that’s evidence the “stimulus” didn’t.

A couple of other related points from the CBO report:
· According to the updated baseline, the federal government will in 2022 spend a total of $1.064 trillion on Medicare, and $592 billion on Medicaid (not counting the state share of Medicaid payments). The vast – and vastly increasing – amounts of money the federal government is spending on these programs makes the best case for comprehensive entitlement reform.
· The update projects the decade-long cost of a freeze in Medicare physician payments at $245 billion. If said legislation is not paid for, CBO estimates debt service payments on the $245 billion would total an additional $36 billion.

Chris Van Hollen's Curious Claim on "Arbitrary Medicare Cuts" - 8/20/12

The Washington Post’s Ezra Klein published an interview with House Budget Committee Ranking Member Chris Van Hollen over the weekend, in which the latter made an interesting claim about Obamacare’s Medicare provisions. Klein asked a question noting that “the Democrats like to say…that they’re just cutting providers, not beneficiaries. But providers often pass their costs along to beneficiaries, either by making them pay more or giving them worse service. So how real is that distinction?” Van Hollen responded thusly:

Obviously, if you were just to do across-the-board, arbitrary cuts, that would be the case, but the whole idea behind Obamacare is to change the incentive structure behind Medicare so the payments to providers focus on the value of care rather than the volume of care. So, for example, before the Affordable Care Act was passed, hospitals…had no financial incentive to coordinate the care of the condition once the beneficiary left the hospital. We’re now changing the model so hospitals don’t get reimbursed every time the patient gets readmitted.
There’s only one problem with that statement: Obamacare is paid for largely by “across-the-board, arbitrary cuts.” Take a look at the below chart, which Klein’s own colleague Sarah Kliff published last week:

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The red section is the savings from hospital reimbursements – which was achieved by arbitrary, across-the-board cuts. The blue section is the savings from Medicare Advantage – which was achieved by arbitrary, across-the-board cuts. And the green section includes miscellaneous savings provisions, many of which (hospice, home health, etc.) come from – you guessed it – arbitrary, across-the-board cuts. And while CBO hasn’t released a recent re-estimate of the hospital re-admission provision Van Hollen cited, a March 2010 score of Obamacare credited only $7.1 billion in savings – just over 1% of the law’s total Medicare savings – from this particular policy. By comparison, “arbitrary, across-the-board cuts” comprise more than two-thirds of the Medicare savings, as the chart above clearly demonstrates.

Klein didn’t challenge Van Hollen on his assertion that Obamacare doesn’t include across-the-board cuts – because, well, he’s Ezra Klein. But Van Hollen’s claim is striking nonetheless. It’s one thing to say that the Medicare provisions in Obamacare are painful but nonetheless necessary, or that the provisions wouldn’t affect beneficiaries at all. But what Van Hollen said was that “arbitrary, across-the-board cuts” WOULD harm beneficiaries – and then proceeded to deny the clear fact that most of Obamacare’s savings comes from these types of provisions.

Last week came word that Rep. Van Hollen will be tapped to play Paul Ryan in preparations for the vice presidential debate. Given the level of competence on health care Van Hollen showed in his interview with Klein this week, Joe Biden might want to think about a Plan B.

Robert Gibbs and IPAB Members - 8/20/12

Speaking on Fox News Sunday yesterday, Robert Gibbs was challenged about the composition of Obamacare’s Independent Payment Advisory Board, or IPAB. He said that the IPAB would be composed of “medical professionals. They are people that we trust to make medical decisions.”

Actually, that statement is FALSE. Obamacare specifically states that practicing medical professionals may NOT comprise the majority of the IPAB’s membership – meaning economists and other potential bean-counters will by definition maintain a majority voting share on the board. Here’s the specific language from page 423 of the statute (emphasis mine):

(iii) MAJORITY NONPROVIDERS.—Individuals who are directly involved in the provision or management of the delivery of items and services covered under this title shall not constitute a majority of the appointed membership of the Board.

Of course, if Gibbs – and by extension the Obama campaign – want to argue that the IPAB’s members will be thoroughly respected, then President Obama could actually follow the law and appoint IPAB nominees. According to page 426 of the statute, the law appropriates funds for IPAB (originally $15 million, but lowered to $5 million last December) “for fiscal year 2012” – that’s the fiscal year ending this September 30. So Obamacare contemplates IPAB being up and running NOW – yet President Obama has failed to nominate any appointees to the board. If the President wants to save Medicare so badly – and IPAB is so critical to saving Medicare – what’s he waiting for? And if IPAB is so innocuous and won’t harm seniors, why is he waiting until AFTER his re-election campaign to announce who he wants to put on the board?

Given the massive powers of the IPAB officials – the rulings of these bureaucrats will be exempt from both administrative AND judicial review – there’s a good government argument to be made that the American people should have full knowledge of who these powerful people will be BEFORE they make their choice in November. Of course, given this Administration’s history of radical appointees – i.e., Donald “Rationing with Our Eyes Open” Berwick – it’s entirely likely that the Administration does NOT want to tell the American people exactly who will be supervising the Medicare program under IPAB’s new world order.

Getting the "Politifacts" Right - 8/15/12

Politifact this afternoon issued a “ruling” calling Mostly False a statement that Obamacare utilized Medicare funds to pay for its coverage expansions. The Politifact piece claims – correctly – that other Presidents have signed laws reducing Medicare spending, and that therefore claims about Obamacare’s impact on Medicare are overblown. However, there’s a BIG difference between those prior laws and Obamacare – Obamacare used Medicare savings to pay for more government spending. On that count, there is near universal agreement that’s exactly what the law did:
· The non-partisan Congressional Budget Office said that the Medicare reductions in Obamacare “will not enhance the ability of the government to pay for future Medicare benefits” – because those savings will be used to fund other unsustainable entitlements. If Democrats want to use the Medicare savings provisions to extend the life of the Medicare trust fund – and not to fund the new entitlements created by the law – the Congressional Budget Office previously estimated what the fiscal impact would be: “A net increase in federal deficits of $260 billion” through 2019.
· Likewise, the Medicare actuary has written that the Medicare provisions in the law “cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions under the PPACA) and to extend the [Medicare] trust fund, despite the appearance of this result from the respective accounting conventions.”
· Back in November, even Nancy Pelosi admitted that Democrats “took a half a trillion dollars out of Medicare in [Obamacare], the health care bill” to pay for more federal spending.

President Obama himself admitted the problems with Obamacare’s supposed logic in a 2010 interview, when he stated that “You can’t say that you are saving on Medicare and then spending the money twice.” Yet that’s EXACTLY what the law did – and no amount of spin can change that fact

Pharmacies Join Obamacare Propaganda Campaign - 8/15/12

The Hill reports this afternoon that several major pharmacies “will promote [Obamacare]…to seniors,” providing brochures about all the law’s supposed new benefits. In a conference call announcing the program, CMS Acting Administrator Marilyn Tavenner refused to give a straight answer to the question about whether the pharmacies came up with the idea for the program, or the Administration proposed it – strongly suggesting that the Obama Administration proposed this idea to pharmacies as yet another propaganda effort to win support for their unpopular law.

One unanswered question remains: Will these pharmacies also educate seniors about the law’s cuts to Medicare Advantage – which will cut enrollment in Medicare Advantage in half and reduce plan choices by two-thirds? Or does the Administration’s call for seniors to be able to “make informed healthcare decisions” only apply to the information the Administration wants seniors to see?

It’s perhaps not surprising that pharmacies would look to advertise Big Pharma’s “rock-solid deal” struck behind closed doors with President Obama – after all, pharmacies have the same financial incentives to sell more brand-name prescriptions that Big Pharma companies do. However, the more than 17 million seniors participating in Medicare Part D who are facing higher premiums thanks to this “rock-solid deal” may not be so happy.

Barack Obama vs. Barack Obama on Medicare - 8/15/12

Barack Obama, in a speech today: “My plan already extends Medicare by more than a decade.”

Barack Obama, in an interview on March 17, 2010: “You can’t say that you are saving on Medicare and then spending the money twice.”

Obama's Medicare "Plan" in One Chart - 8/14/12

Amidst various claims by liberals that President Obama has a Medicare reform plan, it’s worth re-sending a chart first released at the time of this year’s Medicare trustees report. Under President Obama’s Medicare “reform” plan, Part A of Medicare would stop running deficits…NEVER. Here’s a graphical representation of the tide of red ink – based on figures in a report three of the Administration’s own Cabinet secretaries signed:

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It’s also worth noting that the chart above is actually an under-estimate of Medicare’s financial woes – because it double-counts $716 billion in Medicare reductions that in reality were raided to fund Obamacare’s new entitlements. The non-partisan CBO said that the Medicare reductions in Obamacare “will not enhance the ability of the government to pay for future Medicare benefits” – because those savings will be used to fund other unsustainable entitlements.

Liberals may claim all they like that President Obama has a Medicare plan. But the numbers in an official government report don’t lie – his real plan will cause the bankruptcy of Medicare, and the country as a whole.

Two Reasons Democrats DON'T Have a Medicare Plan - 8/13/12

Ezra Klein has a post this afternoon in which he claims that Democrats have a plan to reform Medicare, but that this plan is fundamentally different from the vision conservatives have put forward. To which only two questions show the incomplete nature of Democrats’ supposed “plan:”

1. How does the Democrat plan deal with changing demographics? As we previously noted, CBO has estimated that changing demographics represent at least half, and up to three-quarters, of the shortfall in entitlement programs over the coming generation. What this analysis means is that, even if the growth of health costs does manage to slow (and both CBO and the Medicare actuary think Obamacare’s cost reductions will not be sustainable in the long-term), slowing health costs alone won’t solve Medicare’s financial problems.

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The House Republican budget addresses the demographic bulge in part by raising the Medicare retirement age for future generations. How does the President propose to address this issue? He doesn’t – he has consistently ducked it. Does he want to raise taxes (again) to address the demographic concerns? He won’t say. Will the President agree to raise the retirement age? Maybe – but he hasn’t said so publicly, and he most likely won’t before November 6. So the President’s views on how to address the “Baby Boom bulge” are unclear – because he has avoided these issues for political gain.
2. Where are the IPAB nominees? Klein’s post admits that the “most famous” way the President would reduce Medicare costs is through the Independent Payment Advisory Board (IPAB). Klein also notes that the President has proposed “expanding IPAB’s mandate such that it can change Medicare’s benefit package” and lowering Medicare’s overall growth rate. But here’s the interesting thing: According to page 426 of the statute, the law appropriates funds for IPAB (originally $15 million, but lowered to $5 million last December) “for fiscal year 2012” – that’s the fiscal year ending this September 30. So Obamacare contemplates IPAB being up and running NOW – yet President Obama has failed to nominate any appointees to the board. If the President wants to save Medicare so badly – and IPAB is so critical to saving Medicare – what’s he waiting for? And if IPAB is so innocuous and won’t harm seniors, why is he waiting until AFTER his re-election campaign to announce who he wants to put on the board?

Klein would probably argue that conservatives will oppose whomever the President nominates, so there’s no point in the President putting forward appointees now who are going to get attacked. But it’s more than a tad hypocritical for Democrats to be gleeful about running “Mediscare” attack ads against conservatives – only for these same Democrats to claim they can’t put forward IPAB nominees whose records will be subject to similar public scrutiny. And given the massive powers of the IPAB officials – the rulings of these bureaucrats will be exempt from both administrative AND judicial review – there’s a good government argument to be made that the American people should have full knowledge of who these powerful people will be BEFORE they make their choice in November.

When it comes to both the demographic challenges facing Medicare, and the specific IPAB officials who will implement the lynchpin of Obamacare’s plan to lower costs, President Obama has failed to offer any specifics or any vision – meaning that even under favorable circumstances, the best grade one can offer for the President’s Medicare “plan” is an Incomplete.

Fact Checking David Axelrod on...Everything - 8/13/12

Speaking on ABC’s This Week yesterday, Obama campaign adviser David Axelrod made a series of misleading statements about Obamacare and the House Republican budget. Take for instance the claims made in this doozy of a paragraph:

AXELROD: Well, first of all, they want to turn – let's talk about the $700 billion. Congressman Ryan, what he doesn't say is that he's incorporated that same $700 billion into his plan, so he's embraced exactly what the president's done. The difference is the president is trying to strengthen the Medicare program. Under the changes that the president made, seniors are getting more prescription coverage and preventive care. We extended the life of Medicare by eight years, according to the Congressional Budget Office. The Ryan-Romney plan would not do that. And in fact, by turning it into a voucher program, throwing seniors onto the tender mercies of the private insurance market and capping growth the way they do, ultimately they are going to shift thousands of dollars onto the backs of seniors, and Medicare itself will be in a death spiral because it will – it will be dissipated by seniors who – healthy seniors going into the private system, leaving sick seniors in the existing Medicare program.

Where to begin? Well, let’s analyze the claims one by one:

“Congressman Ryan, what he doesn't say is that he's incorporated that same $700 billion into his plan, so he's embraced exactly what the president's done.” This is FALSE. While Democrats took savings from Medicare to pay for their costly new Obamacare entitlement, the House Republican budget would use that money to save Medicare first. And you don’t even need to take my word for it. Because in November, Nancy Pelosi admitted that Democrats “took a half a trillion dollars out of Medicare in [Obamacare], the health care bill” to pay for more federal spending. (One related point worth thinking about: If Congressman Ryan actually HAD embraced the President’s proposal, why would Axelrod criticize him…?)

“The difference is that the President is trying to strengthen the Medicare program.” There’s one problem with this allegation: Medicare actuary Foster has written that the Medicare provisions in the law “cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions under the PPACA) and to extend the [Medicare] trust fund, despite the appearance of this result from the respective accounting conventions.” Even President Obama himself admitted this irrefutable logic in a 2010 interview, when he stated that You can’t say that you are saving on Medicare and then spending the money twice.”

“Seniors are getting more prescription coverage…” That’s an interesting claim to make, because more than 17 million seniors participating in Medicare Part D are facing higher premiums so that Big Pharma can benefit from its “rock-solid deal” struck behind closed doors with President Obama and Congressional Democrats. Of course, it’s unsurprising for David Axelrod to make this claim, because he received a multimillion dollar severance package indirectly paid for by the pharmaceutical industry, thanks to Big Pharma’s backroom Obamacare deal with the White House.

“We extended the life of Medicare by eight years, according to the Congressional Budget Office.” That’s not what the Congressional Budget Office said. The non-partisan CBO said that the Medicare reductions in Obamacare “will not enhance the ability of the government to pay for future Medicare benefits” – because those savings will be used to fund other unsustainable entitlements. If the President wants to use the Medicare savings provisions to extend the life of the Medicare trust fund – and not to fund the new entitlements created by the law – the Congressional Budget Office previously estimated what the fiscal impact would be: “A net increase in federal deficits of $260 billion” through 2019.

“Capping the growth the way they [i.e., Republicans] do…” This is another interesting statement for Axelrod to make, because it was Obamacare that capped Medicare’s growth rate for the first time ever. What’s more, the House Republican budget caps the growth of Medicare spending at exactly the same growth rate as Obamacare. The difference is that Obamacare delegates the power to cut Medicare spending to a board of 15 unelected bureaucrats, whereas conservatives would empower patients to make their own choices – reducing costs through competition, NOT government fiat.

“[Under premium support,] Medicare itself will be in a death spiral…” I’ll let Cokie Roberts – scion of two prominent Democrats – answer this one. Later in the ABC This Week program, here’s what she said about Axelrod’s claims that Obamacare would strengthen the Medicare program, while premium support proposals would undermine it:

It's also intellectually dishonest, because the truth is, as you know, they say they're taking it away from providers. And every year, Congress votes to do what's called the doc fix, to give the providers back the money that has been cut. So, you know, that $700 billion, I won't look for it to be gone anytime soon.

And because Obamacare takes those Medicare savings out of Medicare to pay for new spending, any attempt to reverse some or all of the $700 billion in reductions would increase the federal deficit. It’s a perfect example of why Obamacare is so harmful both to seniors and the federal budget. And no amount of misleading statements by the Obama campaign can disguise that fact.

Obamacare's Funny Money - 8/10/12

This morning the New York Times reports on the confusion and uncertainty regarding Obamacare’s medical-loss ratio rebates. Some individuals in employer plans have received notices that their plans will receive rebates – but the rebates are paid to the plans, and not the individuals, and many employers have not decided what to do with them. This is perhaps unsurprising, because it may not be worth a business’ time and effort to distribute $1.51 rebate checks to all its employees – particularly given that the employee’s share of the premium can often be small. So for both employer and employee, this supposed Obamacare “benefit” may end up being more hassle than it’s worth.

Meanwhile, the Washington Post’s fact checker column this morning gave President Obama three Pinocchios for making yet another misleading claim about Obamacare. In Colorado this week, the President again repeated his old claim that Obamacare will lower premiums by creating Exchanges. This claim essentially riffs off his discussion with Sen. Alexander back at the White House health summit in February 2010. As you can tell from the e-mail below my signature, it wasn’t true then, and it isn’t true now. Kessler cites numerous actuarial studies to make his point, but the gist is this: Obamacare FORCES people to buy richer policies, and this Washington-mandated increase in benefits will raise premiums, not lower them. Even Jonathan Gruber, who served as a paid consultant to HHS to create Obamacare, admits that the President’s rhetoric was misleading.

Four years ago, candidate Obama repeatedly promised that he would cut premiums – not slow the rate of growth, but CUT them in absolute terms – by $2,500 per family. No amount of measly rebate checks, or misleading rhetoric, can hide the fact that Obamacare has, by the President’s own standards, spectacularly failed to deliver.
President Tries to Have His Own Facts on Insurance Premiums

The President keeps trying to assert that his plan would lower premiums in the individual market, but the Congressional Budget Office found that the Senate bill would RAISE premiums by an average $2,100 per family. The basis for the President’s allegation is that the Exchanges would reduce costs on their own; however, CBO also found that premiums would go up because individuals would be FORCED to buy richer policies. Here’s the language from pages 9-10 of the CBO analysis:

Specifically, because of the greater actuarial value and broader scope of benefits that would be covered by new nongroup policies sold under the legislation, the average premium per person for those policies would be an estimated 27 percent to 30 percent higher than the average premium for nongroup policies under current law (with other factors held constant). The increase in actuarial value would push the average premium per person about 18 percent to 21 percent above its level under current law, before the increase in enrollees’ use of medical care resulting from lower cost sharing is considered; that induced increase, along with the greater scope of benefits, would account for the remainder of the overall difference.

In other words, the increased mandates in the bill – because Democrats and government bureaucrats believe that some Americans’ coverage is “insufficient” – would RAISE premiums. And the changes the President proposed earlier this week – which apply those new benefit mandates to all health policies, including those who have (and like) their current plan – would raise premiums still further…

Get Ready for the NEXT Obamacare Mandate - 8/9/12

Politico Pro reports this afternoon (subscription required) that the Administration and outside groups have begun a series of backroom discussions regarding long-term care and the CLASS Act. Among the topics being discussed – how to enact something similar to a participation mandate. One participant said “there have been discussions about incentivizing enrollment in ways that would ‘come close enough to mimicking a mandate.’” One way could involve taxing all Americans who do not participate in CLASS – a policy the Supreme Court upheld as constitutional not two months ago.

This movement towards a de facto CLASS mandate is entirely predictable – in fact, was predicted – once HHS admitted the program could not be made solvent without a mandate. After all, Peter Orszag, the former Obama Administration budget director, first referenced the idea of mandatory participation in CLASS last summer; other liberal bloggers have agreed. The Justice Department likewise conceded in a Pennsylvania courtroom that mandatory long-term care insurance would be constitutional. And now, mere months after the Supreme Court upheld Obamacare’s individual mandate as a tax – forcing all Americans to purchase a product for the first time ever – the Obama Administration is already wondering how close it can come to enacting yet another purchase mandate on the American people.

It’s also worth noting the “closely guarded” nature of these secret negotiations, and the fact that most participants won’t even say who’s in the (back)room:
Participants wouldn’t discuss which federal officials have attended the meetings. HHS did not respond to a request for comment by deadline….[One participant] declined to say whether federal officials have joined in the discussions. Other group members POLITICO spoke with also declined to say who’s participating, citing directions…
Negotiations on C-SPAN, it ain’t, that’s for sure. But one thing is fairly certain: If HHS is conducting secret backroom discussions, and not telling Republicans, let alone the public, about them, you can practically bet the policy the Administration will try to ram down Congress’ throats – or implement unilaterally – will be government-centered, and far from bipartisan.

Three More Reasons Medicaid Is (Already) Unsustainable - 8/7/12
((This one's easy - ask ANY Governor, of EITHER political party, if his or her state can afford Medicaid NOW))

In the past week, three separate news stories have demonstrated how the Medicaid program – on which much of the coverage expansion in Obamacare is based – is fundamentally unsustainable. To wit:

1. Nearly One Third of Doctors Reject Medicaid Patients; Low Reimbursements an Issue: An article published in Health Affairs yesterday (subscription required) found that nearly one-third (31%) of physicians are not accepting any new Medicaid patients; by comparison, under 20 percent of physicians are not accepting any new patients with Medicare or private insurance. The study also found that “acceptance rates of new Medicaid patients were higher in states with higher Medicaid-to-Medicare fee-for-service fee ratios.” In other words, many doctors choose not to participate in the Medicaid program – and a problem exacerbated in states with low Medicaid reimbursement levels.

2. States Are Already Cutting Access to Drug Services for Existing Medicaid Beneficiaries: Kaiser Health News reported last week that “Illinois Medicaid recipients have been limited to four prescription drugs as the state becomes the latest to cap how many medicines it will cover in the state-federal health insurance program for the poor.” A total of 16 states impose monthly limits on prescription drugs for beneficiaries, “and seven states have either enacted such caps or tightened them in the past two years,” due in part to the lingering impact of the economic slowdown on state budgets.

3. States Believe Obamacare Will Impose Additional Costs on their Medicaid Programs: A survey of states, conducted as part of a GAO report on Obamacare’s Medicaid expansion, found that “the majority of state budget directors believe that three aspects of Medicaid expansion will contribute to costs: 1) the administration for managing Medicaid enrollment, 2) the acquisition or modification of information technology systems to support Medicaid, and 3) enrolling previously eligible but not enrolled individuals in Medicaid.” While more than 30 budget directors believe these three provisions of Obamacare will cost states, a much smaller number believe provisions in Obamacare will save their states money, as the chart below demonstrates:

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Medicaid is already unsustainable – states cannot afford their current programs, and have lowered reimbursement rates and imposed new restrictions on things like pharmaceuticals, both of which impede beneficiary access. Yet Obamacare is placing even more fiscal burdens on this already fiscally troubled program. That’s not health “reform” – that’s the furthest thing from it.


((This compilation and commentary by Citizens Council for Health Freedom President and nurse Twila Brase is also a brilliant way to keep up with health care reform news. Honestly, there is SO MUCH information out there that it's impossible to keep up with it. Chris Jacobs and Twila Brase, along with groups like Docs 4 Patient Care, are working hard to make the massive amount of information manageable for people like us, who don't have 12 hours a day to spend reading health care reform news.))

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CCHF Health Freedom eNews

August 22, 2012
  • President's Commentary.
  • Tax Credit Shell Game.
  • $45M Computer System Endangers Lives.
  • Don't Come Back!
  • Sobering News on Doctors
  • P4P: A Threat to Good Doctoring
  • Stats of the Week
  • News Release of the Week
  • Featured Health Freedom Minute
President's Commentary

Newsweek's cover story is making headlines. The author, Niall Ferguson, discusses why "Obama's Gotta Go." The article discusses various failed promises, but I take issue with the end of the following statement:
...the Patient Protection and Affordable Care Act (ACA) of 2010 did nothing to address "...":, the "fee for service" model that drives health-care inflation...
Fee-for-service is not the problem. It's the solution. Fee-for-service is how we pay for everything else. The grocer brings food to a central location and makes it available for a "fee." The barber cuts your hair for a fee. If you want the service, you pay the fee. If you don't like the fee, you go price(fee)-shopping.

The problem in health care is THIRD-PARTY PAYMENT of the fee. People no longer pay for the service. Health plans do, even for routine and minor care. This is not insurance. This is a very expensive way to pay medical bills. True insurance is protection against the financial loss of a rare medical catastrophe.

Third party payers are making out like bandits. Patients no longer have the power of the pocketbook, leaving government and its favored health plans in charge of most health care dollars and decisions. Meanwhile:

  • Physician income declined 7% between 1995 and 2003.
  • Cost of employee health care benefits are expected to rise 7.2% this year.
  • Health plan premiums under Obamacare will soar 19 - 30%.
Third party payers got another sweet deal in Obamacare. Health plans are getting out of the insurance business. Obamacare shifts risk management -- the business of insurance -- to doctors and hospitals. Health plans will simply collect premiums, keep 15% off the top, and pay out the rest to hospitals as "bundled" payments. In one example, Medicare says, "Physicians and other practitioners would submit "no-pay" claims to Medicare and would be paid by the hospital out of the bundled payment."
Your doctor and hospital could soon be your insurer. They'll get the money and take on the financial risk. The patient becomes a liability. If this happens the more patients in the parking lot, the less dollars left at the end of the month to cover expenses or payroll. This presents a major conflict of interest. The U.S. could be headed toward Canada-style health care where doctors get a yearly lump sum and when it's gone, it's gone.

Real fee-for-service is the answer to the unethical system coming out of federal health care reform. Repealing Obamacare -- and its prohibition on true insurance -- is just the beginning of health freedom. Paying cash for most care, asking for prices, and owning lifelong true health insurance is essential. I sent Mr. Ferguson a tweet to let him know. (@twilabrase)

Now on to the news . . .

News to Know:
Tax Credit Shell Game

"Obamacare is a massive tax cut...," claimed Center for American Progress's CEO on
Face the Nation. However the Obamacare tax credit is paid to the insurer: "The Secretary of the Treasury shall make the advance payment under this section of any premium tax credit the issuer of a qualified health plan on a monthly basis" (Sec. 1412). Obamacare consultant Jonathan Gruber agrees: "Most households will never actually get their hands on the credits, so their existing tax liabilities won't actually change." To be clear, you'll fund the tax credit through higher federal taxes. Then it will be used to pay a portion of the higher cost of your premiums under Obamacare. It's a shell game. The health plans get a direct infusion of cash. You get nothing. And if you make one penny over 400% of poverty guidelines, you'll pay the entire cost of higher premiums.

$45M Computer System Endangers Lives

A new medical computer system at correctional facilities in California recently recommended a potentially fatal dose of a heart medication. Nurses say it's one example of many close calls. The EPIC computer system is used in many hospitals nationwide. "It's dangerous. It's very dangerous," said one nurse. "What nurses want is for the EPIC program to go away until it's fixed," said nurse Lee Ann Fagan. But the chief information officer for the county says the electronic health record (EHR) is "just a tool....We can't rely just on a computerized system." The county spends $45 million and wants to rely on someone's memory to keep a patient safe? Really?

Don't Come Back!

In October, the federal government will take back about
$280 million in payments from more than 2,200 hospitals. These penalties are part of Obamacare (Sec. 3025). In short, if a Medicare patient is readmitted within 30 days of being discharged from the hospital, the hospital has to pay a penalty to the federal government. This is counterproductive. Medicare currently pays the hospitals a set fee per diagnosis called a DRG (Diagnosis-Related Group) -- which encourages early discharge to save money. But now Medicare will penalize hospitals if they readmit patients within 30 days. The squeeze is on. Readmission rates, however say nothing about the quality of a hospital, says one hospital CEO: "Only a proportion of [readmissions] within 30-days are preventable...a quarter of most." The feds don't care. These payments fund Obamacare.

Sobering News on Doctors

The 2012 Medscape Physician Compensation Report provides the following
sobering news on physician satisfaction: "What a difference a year makes! Last year's satisfaction scores hit 80% (dermatologist), with many other specialties over 70% (radiologist and oncologists) and several over 60%. In Medscape's 2012 survey, however, there are fewer smiles. The most satisfied specialty is again dermatology, but this time with a satisfaction score of 64% -- considerably down from 80%. Close to half the specialties surveyed scored under 50% in overall satisfaction. ..."

One doctor told the survey, "My income is 60% of what it was 10 years ago, and I'm doing more work." Another said, "The regulatory environment and the onerous paperwork involved are making the current situation untenable." Still
another said, "I love being a physician, but I hate what is happening to medicine. Too many people are coming between me and the care I provide to my patients." Expect physicians to retire early unless Obamacare is repealed.

P4P: A Threat to Good Doctoring

A new editorial in the British Journal of Medicine suggests the current Pay for Performance (P4P) programs rest on "flawed assumptions about medicine, measurement and motivation" and may encourage providers to game the system. Physicians and professors in New York and North Carolina worry that "pay for performance may not work simply because it changes the mindset needed for good doctoring." The article shares four very brief but thought-provoking takeaways:
Read it here.

In the Medscape survey, 47% of doctors said quality measures and treatment guidelines "will have a
negative effect on patient care." In another question, 43% said they would not reduce certain tests (e.g. PSA, mammography) to contain costs "because these guidelines are not in the patient's best interest." Pay for Performance programs often require compliance with guidelines. Note the 7% in the image below.

Stats of the Week:
$338,827 - States' cost of the 26-state lawsuit against Obamacare

23% - amount of doctors who spend 5 to 14hours/wk on administrative work.
18% - amount of oncologists who spend at least 25hr/wk on administrative work.

News Release of the Week:
Dollars and Sense: The Real Reasons to Say No to State Healthcare Exchanges

ST. PAUL, Minn. - Many states continue to move toward implementation of the centerpiece of the Affordable Care Act: state healthcare exchanges. But as these implementations continue, there are four major issues impacting both individual patient/taxpayers as well as state legislators.

First, under the Affordable Care Act, employers with at least one employee who chooses to purchase health insurance through healthcare exchanges will be penalized, up to $3,000 per employee. The penalty for many employers will be so burdensome, that many smaller businesses will not be able to survive based on the tax penalties assessed simply because one employee chose to shop around for health insurance. But without exchanges, there will be no burdensome penalties.
Continue reading

Featured Health Freedom Minute: Marketing Patient Privacy

I have long said privacy should become a marketing tool. Doctors should refuse to use an online electronic medical record. They should refuse to put your records into the National Health Information Network - the intrusive national system that will give 2.2 million entities access to your data. Doctors should use the promise of privacy to drive patients into their clinics.
Continue reading

Twila Brase broadcasts a daily, 60-second radio feature, Health Freedom Minute, which brings health care issues to light for the American public. Health Freedom Minute airs on the entire American Family Radio Network, with more than 150 stations nationwide in addition to Bott Radio Network with over 80 stations nationwide.

here to listen to this week's features.

Citizens' Council for Health Freedom
161 St. Anthony Avenue, Ste 923
St. Paul, MN 55103
Phone: 651.646.8935 • Fax: 651.646.0100
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About CCHF


((Obviously, it's best to start with Part 1))

Medicare Part IV: Medicare’s Best Path Forward

This week, Americans for Prosperity has outlined the two competing plans for redirecting Medicare’s unsustainable path: President Obama’s and Congressman Ryan’s. Both plans extend the trust fund’s longevity, but they attack the issue in very different ways. The President’s plan consolidates power in the hands of bureaucrats, while Congressman Ryan’s plan puts it back into the hands of seniors.

Medicare Part III: Congressman Ryan’s Medicare Plan

August 23, 2012 J
Like President Obama, Congressman Ryan has a plan to reform the Medicare system. Unlike President Obama’s plan, Ryan’s plan works by creating greater flexibility for seniors, utilizes market forces to achieve savings and has bipartisan support. Ryan’s plans have been co-sponsored by Senator Ron Wyden, Democrat from Oregon.

Medicare Part II: President Obama’s Medicare Plan

August 22, 2012 J
By: Nicole Kaeding The Patient Protection and Affordable Care Act (PPACA) was passed by Congress and signed by the President in March of 2010. Americans for Prosperity has written extensively about its numerous tax increases, bureaucratic overreaches, disastrous health insurance exchanges and unconstitutional Medicaid expansion. But also hidden in the pages of PPACA are the [...]

Medicare Part I: What is Medicare?

August 21, 2012 J
With the selection of Congressman Paul Ryan as the Republican vice presidential candidate, the subject of Medicare reform is dominating the news. Both Congressman Ryan and President Obama have distinctive plans to overhaul this huge entitlement program represented by a key choice: bureaucratic control or seniors’ choice. In a series of blog posts this week, Americans for Prosperity will be examining what Medicare is and whether it is sustainable, President Obama’s and Congressman Ryan’s Medicare plans, and the best path forward for American seniors.


Doctors say Obamacare is not a cure

A new board of bureaucrats, for instance, will determine the kind of care seniors receive under Medicare. Like most doctors, we did not attend medical school to spend yet more time filling out yet more paperwork. But over time, the increased spending by the federal government on health care ushered in by Obamacare will only further cement a growing role for Washington, D.C., in health care decisions.

It’s not difficult to see why. Under Obamacare, health care spending will skyrocket as a percentage of GDP. Far from reducing the deficit, Obamacare will accomplish the opposite. At a time when our national debt exceeds $15 trillion, that is a development our country can ill afford.

Obamacare will also curtail consumer choice in a way that is fundamentally at odds with President Obama’s promises. Before the legislation’s passage, he assured Americans that “if you like your plan, you can keep your plan.” But that’s simply not true. Facing new mandates under Obamacare, many small businesses will have little choice but to drop employees from their current plans. According to the Congressional Budget Office, this will affect up to 20 million Americans.

Before it became law, then-Speaker of the House Nancy Pelosi, D-Calif., said of Obamacare, “We have to pass the bill so that you can find out what is in it, away from the fog of controversy.” Here were are, more than two years later, and it turns out the bill’s side effects are worse than the disease it sought to cure.

As physicians, we recognize that there are many problems with the health care system in this country which require serious solutions. Rising costs are one. Too many uninsured is another. But a top-down takeover by the federal government — as President Obama supports — is not the answer.

Mitt Romney offers a starkly different approach. His solution is centered on empowering states to serve as laboratories of democracy and design their own plans for reform.

These policies would foster competition between providers and insurers alike, and by extension, improve quality and lower costs.

They would make our health care system better reflect the principles of the free-market, not those of the post office. That is the kind of simple, yet substantive reform that will benefit both doctors and patients.

We have spent our careers in the business of saving lives. It is time for leadership in Washington that preserves our system of medicine and improves it at the same time. And we can begin that process by electing Mitt Romney as president this November.


Lafayette Hill


Upper Darby


Camp Hill

((Brilliant commentary on just how important the 2012 election is to the future of health care in America.))

Dave Racer and COHR March On: But in a Different Way for a Short Time
August 22, 2012

It's been a while since I posted on my
COHRMan blog. This new one explains it.
This is the most critical election in our nation's history. We are going to choose between a march toward greater government control - toward a European-style democracy - or toward less government control.

The choice is stark. The choice is serious. The choice requires each of us to engage in the political process.

The Coalition for Healthcare Redesign focuses on free market, private market health care initiatives. These will flourish if voters choose less government control this fall. If, however, the voters choose to stay with President Obama, and we move toward implementing his dream of a federalized health care system, then COHR will have to change its focus - and it's hard to know what it will be.

This is why I have been working day and night in Minnesota to elect a conservative legislature. You need to do the same in your states. Do you want freedom to choose your own health care, without overwhelming and stifling regulations from Washington, D.C.? Then work to elect conservative members to the U.S. House and Senate, but just as importantly (maybe more so) to your state legislatures.

What does politics have to do with health care? Everything.

Since 1965 at least, we have had a political health care system in which decisions that affect our lives and pocketbooks are driven by elected officials looking over their shoulders at voters. The voters who have been prevailing have demanded a long list of benefits, and the politicians continue to deliver them. Now our nation and our states are in bondage - the kind of bondage that threatens our ability to survive economically and morally.

You have seen less presence from me at COHR for the last several weeks. This is not because I have abandoned our work. On the contrary, it is because I am applying what I urge you to do.

My days and evenings are spent researching, writing, and speaking all across Minnesota. My message is the same as COHR's: We can solve our own problems without the over reach of the federal government. The answers lie in the daily work of those that touch the financial and physical decisions of the health care system. But until we get through this election, and work to help our nation turn right, COHR's message must be delivered in the political arena.

I urge you to go to and while there, spend a few minutes on the "Resource" page. You will notice I've been writing a lot. You will find the radio ads. And a volume of other material.

Your continued support of COHR is helping to make this possible.
Once we get through the election season, we can get back to our core goals - to redesign the U.S. healthcare system from the ground up - not the top down.
So stick with me
If this election moves us toward free market solutions, as I pray it will, COHR will emerge as a national leader in innovative ideas. Your support is critical. Thank you.

Dave Racer, MLitt
Coalition for Healthcare Redesign


Health Policy Digest for August 21, 2012

Turning Medicare into True Social Insurance

In 1970, 20.4 million Americans were enrolled in the Medicare program and the cost was $7.5 billion per year; by 2011, enrollment was close to 49 million with an annual cost of $549 billion...

Employers Expect 7 Percent Growth in Cost of Health Benefits

Forty-three percent of respondents to a survey by the National Business Group on Health said consumer-directed plans are the most effective means employers can use to control health care cost growth...

The average wait to see a new family doctor in this country is just under three weeks; but in Boston, Mass. -- which enacted a law that established near-universal coverage -- the wait is about two months, says John C. Goodman, president at the National Center for Policy Analysis...

Medicare Drama More Hype than Reality

Paul Ryan's approach to cutting Medicare spending has the advantage of making the cuts less painful by allowing market-based reforms, says John C. Goodman, president at the National Center for Policy Analysis...


((This piece debunks myths on BOTH sides of the political aisle.))

Ten Myths in the Medicare Ad Wars

Commentary by John C Goodman
Source: Forbes

If you like public policy, this is potentially an ideal time to have a serious national discussion about the future of Medicare. What we are getting instead is something akin to school yard taunts. The best thing you can say about Mitt Romney and Medicare is that he is confused. The best thing you can say about Barack Obama is that he has trouble with the truth.
Here is my prediction. Seniors are not going to be fooled by sound bites and smears. They really are going to figure this out. And it’s not going to be good for President Obama.
Myth Number One: Health Reform Is Good For Seniors.
Millions of taxpayer dollars (that’s our dollars) have been spent on Andy Griffith television ads and other advertisements trying to convince seniors that they are big winners under health reform. If the Federal Trade Commission 7TC could claim jurisdiction over these ads, a lot of Obama administration folks would be headed for the hoosegow.
In fact, 40% of the cost of giving subsidized insurance to young people is being paid for by reduced spending on the elderly and the disabled. For the next 10 years, the spending reduction totals $716 billion. That’s no small change.
The Obama ads and the White House Television talking points stress new benefits for seniors: a free annual wellness exam and the eventual closing of the “donut hole” for drug coverage. What they conceal is that for every $1 spent on new benefits, seniors will lose $9 in other spending — which gives a whole new meaning to the term “bait and switch.”
Consider people reaching the age of 65 this year. Under ObamaCare, the average amount spent on these enrollees over the remainder of their lives will fall by about $36,000 at today’s prices. That sum of money is equivalent to about three years of benefits. For 55 year olds, the spending decrease is about $62,000 — or the equivalent of six years of benefits. For 45 year olds, the loss is more than $105,000, or nine years of benefits.
In terms of the sheer dollars involved, the planned reduction in future Medicare payments is the equivalent of raising the eligibility age for Medicare to age 68 for today’s 65 year olds, to age 71 for 55 year olds and to age 74 for 45 year olds. But rather than keep the system as is and raise the age of eligibility, the reform law instead tries to achieve equivalent savings by paying less to the providers of care.
Myth Number Two: Seniors Will Not Lose Any Medicare Benefits.
To begin with, one in four Medicare beneficiaries is in a Medicare Advantage plan. These plans may be overpaid by Medicare, but they are required to “spend” their overpayments on extra benefits for the enrollees. These include extra drug coverage, dental benefits, etc. Over the next 10 years, ObamaCare will reduce spending on these plans by $156 billion and this reduction will inevitably lead to a loss of benefits. The remainder of the cuts in Medicare spending will mainly be in the form of reduced payments to providers. Although promised benefits won’t change under orthodox Medicare, in the very act of reducing provider fees, health reform will cause seniors to get less care. So while the White House claim that beneficiaries will not lose benefits may not be technically a lie, surely the FTC would pounce on a private company if it said the same things.
Remember: lower payment to providers means less access and less access means less care. One study of the Children’s Health Insurance Program found that simply enrolling children in CHIP did not result in more health care. That is, they had the same number of doctor visits, etc. However, increasing the fees CHIP pays to doctors does result in more care. And presumably the converse is true as well.
According to the Medicare Office of the Actuary’s memorandum, in about two years, Medicare payments to doctors will fall below Medicaid rates and will fall further and further behind Medicaid with each passing year. Medicare payments to hospitals will basically match the Medicaid rate, indefinitely into the future. What will this mean? Seniors will be lined up behind welfare mothers in the attempt to find doctors who will see them and institutions that will admit them. As Harvard University health economist Joe Newhouse has explained, seniors will likely have to seek care at community health centers and safety net hospitals. As the Medicare Office of the Actuary has explained, in a few short years, hospitals will begin closing and senior citizens will have increasing difficulty obtaining access to care.
Myth Number Three: Health Reform Has Made Medicare More Solvent.
Remember, all the health reform act does is pay doctors and hospitals less money. On paper this makes the Medicare trust fund appear to last longer because its expected expenses go down. But if you think this is a legitimate way to make Medicare more solvent, why not be even more aggressive? We could wipe out Medicare’s $43 trillion unfunded liability entirely if we reduce doctor and hospital fees all the way to zero!
The problem is: seniors would not be able to find a doctor who would see them or a hospital that would admit them.
Myth Number Four: ObamaCare Is Fully Paid For.
The White House claims that ObamaCare makes a small profit — that is, that it actually reduces the deficit.
Yet last Sunday on ABC’s This Week, Cokie Roberts baldly asserted that the (ObamaCare) cuts in Medicare spending will never happen. In fact she asserted this with such an air of inside-the-Beltway authority that none of the other talking heads on the program dared to challenge her. She may be right.
We’ve already been through this exercise with a piece of Republican legislation — the 1996 budget act. The Republicans decided to balance the budget, in part, by slowing in the growth of Medicare doctors’ fees. However, in the following years, Congress repeatedly stepped in at the last minute to delay the reductions. The next point of reckoning will come in January, 2013, when a 10-year “doctor fix” will require about $271 billion.
Think about that for a moment. Republicans and Democrats together have promised various constituencies almost $1 trillion benefits — to be paid for by taking $1 trillion away from Medicare providers over the next 10 years. Yet, like Cokie Roberts, no one in Washington thinks that Congress will stick to the bargain.
If it doesn’t, that means that ObamaCare was never really paid for, that it will create a new entitlement that will add hundreds of billions of dollars to the deficit, and that nothing has happened to make Medicare more solvent.
By the way, neither the Congressional Budget Office nor the Office of the Medicare Actuaries thinks the cuts are sustainable. That’s why both agencies have put out “alternative” projections of Medicare finances for future years — which is Washington’s way of telling Congress, “We don’t believe you.”
Myth Number Five: Health Reform Is Going to Make Medicare More Efficient.
An alternative to cutting provider fees is to slow the growth of Medicare by making the whole system more cost effective.
The goal here really isn’t a partisan issue. The Obama administration has continued a number of the pilot programs and demonstration projects started under the Bush administration. These are designed to find ways of making Medicare less costly through pay-for-performance, coordinated care, managed care, home-based care, electronic medical records, etc. The Congressional Budget Office has looked at these efforts on three separate occasions and each time has concluded that they are not working or, in the few cases where there are positive signs, the performance is lackluster.
In the absence of such efficiencies, the law basically mandates a reduction in provider fees.
Myth Number Six: ObamaCare Takes $716 Billion out of the Medicare Trust Fund; by Repealing the Act, We Can Put the Money Back.
Governor Romney says that ObamaCare robs Medicare in order to create a new entitlement for young people. That’s a fair statement. But then he goes on to say that the money came from the Medicare Trust Fund and that he wants to put it back. That’s not OK. There is no money to be put back into Medicare. Both political parties have tried to “pay for” benefits by squeezing the Medicare providers. Romney can un-squeeze the providers if the Republicans win the next election and repeal ObamaCare. But that still leaves Medicare with an unfunded liability on the order of about $86 trillion.
Myth Number Seven: There Is a Medicare Trust Fund
Both Republican and Democrats talk as though there is a real Medicare Trust Fund. There isn’t. Almost all federal trust funds work the same way. They hold no real assets. They are nothing more than accounting conventions, designed to keep track of the inflow of taxes and dedicated premiums and the outflow of benefits. This is true of the Social Security Trust Fund, the Unemployment Insurance Trust Fund, the Highway Trust Fund, etc.
Like Social Security, Medicare operates on a cash flow basis. The accounting “surplus” in the trust fund cannot be used to pay even a dollar of benefits. To pay Medicare benefits, the federal government must first tax or borrow.
Myth Number Eight: By Privatizing the Program, Paul Ryan Would Destroy Medicare as We Know It.
As Tom Saving and I explained the other day, there is no important difference in Medicare spending under Barack Obama’s budget and under the Ryan budget — even when the estimates of the president’s budget are made by his own Office of Management and Budget and the Ryan plan is projected by Ryan himself. Nor is there much difference in implementation — at least till this point.
Much has been made of the fact that Paul Ryan would create “vouchers,” allowing seniors to buy private insurance. To hear the critics tell it, this would radically transform Medicare. But we already have a voucher program under Medicare. It’s called Medicare Part C, or the Medicare Advantage program. One out of four beneficiaries has taken advantage of it to enroll in the same kind of health insurance plans non-seniors typically have.
President Obama has long favored reducing the payments to these plans and significant cuts are part of the Affordable Care Act (ObamaCare). However, neither the president nor any other prominent Democrat is calling for the abolition of these very popular plans. To the contrary. The administration is busily shoring them up with “bonus payments,” fearful that a significant number of plans leaving the market would anger elderly voters.
Although Paul Ryan clearly favors an expansion of private Medicare plans, his budget implicitly endorses the very same cuts in payments to them that are incorporated in current law.
Myth Number Nine: The Ryan Plan Is the Romney Plan.
For better or for worse, Governor Romney has declined to endorse the Ryan budget. He proposes to repeal ObamaCare along with its cuts in Medicare spending. He appears to endorse Ryan’s plan to improve the way seniors enter private insurance plans, however. In place of the byzantine structure we now have, he would adopt a more efficient “competitive bidding” approach.
Myth Number Ten: Medicare Doesn’t Need Reform.
Medicare has the same funding problem as Social Security. The promises we have made far exceed the expected premiums and dedicated taxes. Absent ObamaCare, the unfunded liability in both programs is about $107 trillion — about 6 1/2 times the size of the entire U.S. economy. A sensible approach to the reform of both programs is to move to a funded system in which each generation saves to pay for its own pension and post-retirement health care benefits. Beyond that, we need to free the doctors, the patients and the entrepreneurs. Currently they are dealing with a bureaucratic system that gives each of them perverse incentives. When they act on those incentives they make costs higher, quality lower and access more difficult than would otherwise be the case.
How to liberate the actors in the system and leave them free to solve problems rather than create them is the subject of my new book, Priceless: Curing the Healthcare Crisis.


Please share this:
A Congressional Update about the PPACA,
the SCOTUS decision, Repealing “ObamaCare,”
and Health Care Reform Alternatives

Update from Congress
U.S. Representative Charlie Dent (R-15th) will update us about what’s happening
in Congress concerning the PPACA, the Supreme Court decision, repeal efforts and more,
and will answer your questions about health care reform.
(Only health care reform questions will be allowed.)

6:30 - 8:30 p.m.
Wednesday, September 5, 2012
Doors open at 5:30

Stacks Meeting Room, 2nd Floor
Bethlehem Area Public Library
11 W. Church St., Bethlehem, PA 18018
(Parking available in underground lot after 5 p.m.)

U.S. Representative Charles W. Dent - 15th Congressional District
Anthony Dippolito, M.D., Private Practice General and Colon Rectal Surgeon
(Other panelists may participate)

Free, but space is limited, so please RSVP. Donations are gratefully accepted.



Everything You Wanted to Know About How “ObamaCare”
Affects Business and the Economy
(but didn’t know who to ask)
Featuring Dr. Christine Bongiorno, DVM, area business leader John Brinson, and
additional experts on how the PPACA affects jobs and business growth
6:30 p .m., Oct. 3, 2012, Bethlehem Area Public Library

The Lehigh Valley COALITION for Health Care Reform is a non-profit,
grassroots coalition of concerned citizens and health care professionals committed
to educating the public about the Patient Protection and Affordable Care Act (PPACA)
and other measures and policies impacting America's health.

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