I Am Against Government Healthcare

ObamaCare's Nasty Surprise for Seniors

JOHN C. GOODMAN8/24/2016

Is there any other way to save Medicare without hurting quality of care for seniors or breaking the bank? (Ingram Publishing/Newscom)

Here are three things everyone who is on Medicare or who hopes to live long enough to qualify for Medicare should know.

First, Medicare is no longer a financial nightmare in the federal government's future. For the last half century health care costs per capita have been growing at twice the rate of income, both here and abroad. This has policymakers everywhere wondering how we are going to pay the medical bills for future retirees. But no longer is that going to be a problem in the United States. At least not as long as we have ObamaCare.

Unless some future Congress and some future president change the law, Medicare's growth going forward will stay in line with the growth of our economy – insuring that the program will remain affordable, indefinitely into the future.

How did that happen? On March 23, 2010, when President Obama signed the Affordable Care Act he signed into law a bill that wiped out more than $50 trillion in Medicare's unfunded liability. That's not a misprint. That's trillion with a "t". The savings are almost three times the size of our entire economy.

But ObamaCare is supposed to be about insuring the uninsured. It's about health insurance exchanges and the expansion of Medicaid. What has that got to so with the elderly and the disabled? A lot, it turns out. One of the most important sources of funds that are being used to pay for ObamaCare comes from cuts in future Medicare spending.

All this comes at a price, however. And this is the second fact you need to know.

A letter issued by the Medicare Office of the Actuaries at the time ObamaCare became law warned that Medicare fees paid to doctors and hospitals will fall increasingly behind what other payers will be paying in future years – threatening access to care. That warning was repeated in the latest Medicare Trustees report, which warns that by 2040 half of all hospitals, 70% of all skilled nursing homes and 90% of home health care services will not be able to survive under Medicare's increasingly skimpy fees.

These comments by the actuaries, however, have been ignored by just about everyone. In the latest Trustees' report they appear at the very end – on page 260. If you are a senior, you have to be really, really interested in numbers, tables and actuarial arcana before you'll ever get to the page where you learn that you may not be able to see a doctor when you need one.

Here is a third thing you need to know. Although Republicans have criticized the "Obama cuts in Medicare spending" as threatening access to care for the elderly, the GOP alternative essentially does exactly the same thing. The Paul Ryan budget – which was approved by almost all of the Republican members of the House –envisions a path for Medicare spending that is virtually identical to the Obama administration budget.

Essentially, the Republicans are planning to do what the Democrats plan to do: squeeze the providers. Only the methods differ. Democrats plan to reduce provider payments through a political mechanism. Republicans would do it through an economic mechanism -- by reducing premium support, thereby forcing health plans to reduce their costs by reducing what they pay doctors and hospitals.

Here is the bottom line: By 2075 the expected reduction in Medicare spending for the average senior under both Democratic and Republican budgets will equal about half of their Social Security income. Put differently, were the elderly required to make up for the cuts in Medicare spending, with increased out-of-pocket costs, that would be the equivalent of a 50% tax on their retirement income.

So as not to leave the reader totally depressed, let me add that there is yet a third way. The Democratic and Republican approaches to Medicare reform are what I call "eat your spinach" reforms. Somebody is always losing. Democrats try to hide the costs and often pretend that there are no victims. Republicans, on the other hand, seem to wear the infliction of pain as a badge of honor. If someone is not suffering, it can't be real reform.

What I propose, by contrast, is win-win reform. This is reform where everybody gains – the young, the old, the taxpayers and the current beneficiaries. It involves three fundamental changes to Medicare: special Health Savings Accounts that would let retirees manage at least one-fifth of their own health care dollars; letting physicians benefit from innovations that lower cost and raise quality; and investing payroll taxes in private accounts so future retirees can pay the bulk of their own health care costs.

The specifics are in A Framework for Medicare Reform, which I designed with the help of former Medicare Trustee Thomas Saving and our colleague Andrew Rettenmaier.

Goodman is president and CEO of The Goodman Institute for Public Policy Research

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lov2smile · 36-40, F

Hello Northwest,

Well, I guess you already know the answer to your question, otherwise you wouldn't have taken it off the table.

1) Sorry, The government IS inept. Name one government department run efficiently. (BTW that's a repeat of my question to you that you either overlooked or ignored and didn't answer)

2) Having Health insurance is not the same as getting good health care.
In fact, it doesn't matter how many Americans obtain insurance under the ACA. Most will have difficulty finding a physician. Specifically for the reasons stated above. The government will pay doctors and hospital less and less every year.

3 ) States already are struggling under huge budget deficits from their existing Medicaid programs. Since states lose federal funding if they adjust their Medicaid eligibility guidelines, their only option for reducing deficits is to cut already-low Medicaid reimbursement rates

4) Physicians already are reluctant to treat Medicaid patients under current rates that are a fraction of private and Medicare rates. Cutting reimbursements will exacerbate the physician-access problem and could lead to closures of so-called "safety-net" hospitals that care for many of the poor and uninsured. These hospitals have long depended on federal Disproportionate Share (DSH) payments to offset the cost of caring for the uninsured. But the ACA severely cuts DSH payments on the assumption that the uninsured will gain either Medicaid or private insurance. If large numbers of patients remain uninsured, the financial difficulties of safety-net hospitals will be compounded by their obligation to provide uncompensated care.

5) If you like your doctor you can keep your doctor. Employers will drop millions from health care plans as Obamacare premiums spike, (CBO projects), because it will be cheaper to let the government supply their employees healthcare.

6) Ah yes, the proverbial death panel. Silly me.
A quote from Harry Reid: "Seniors are going to have to learn to accept the inevitable"

Oh, guess what, congress has their own insurance...It's not the same as ours, now is it...WHY???

I could go on and on and you would get tired of reading and it appears your mind is made up.

BUT, if you really have an open mind, do some research. Read the online version of the ACA

Northwest · M

Well, I guess you already know the answer to your question, otherwise you wouldn't have taken it off the table.

Huh? I don't know what you're referring to.

1) Sorry, The government IS inept. Name one government department run efficiently. (BTW that's a repeat of my question to you that you either overlooked or ignored and didn't answer)

That, and $4.95, will get you a Chai Latte at Starbucks. What does this even mean. I asked the question, which is what you specifically have against the ACA, and you're trying to turn it into a "government is inept" strawman. I think I will not take that detour.

2) Having Health insurance is not the same as getting good health care. In fact, it doesn't matter how many Americans obtain insurance under the ACA. Most will have difficulty finding a physician. Specifically for the reasons stated above. The government will pay doctors and hospital less and less every year.

You seem to be under the impression, that the government is providing insurance. This is not the case, and this is the most common misconception for those who oppose the ACA.

Medicade and Medicare, were not invented by the ACA. They have been around, for decades, and our taxes directly pays for them. That, however is NOT ACA. Medicade and Medicare will continue to have a life of their own, and are dealt with, regardless of what happens to the ACA.

3 ) States already are struggling under huge budget deficits from their existing Medicaid programs. Since states lose federal funding if they adjust their Medicaid eligibility guidelines, their only option for reducing deficits is to cut already-low Medicaid reimbursement rates

I am not sure what you're trying to say with this. Are you saying that expanding basic medical coverage, to those who are too poor to afford it, is a bad thing?

4) Physicians already are reluctant to treat Medicaid patients under current rates that are a fraction of private and Medicare rates. Cutting reimbursements will exacerbate the physician-access problem and could lead to closures of so-called "safety-net" hospitals that care for many of the poor and uninsured. These hospitals have long depended on federal Disproportionate Share (DSH) payments to offset the cost of caring for the uninsured. But the ACA severely cuts DSH payments on the assumption that the uninsured will gain either Medicaid or private insurance. If large numbers of patients remain uninsured, the financial difficulties of safety-net hospitals will be compounded by their obligation to provide uncompensated care.

The objective, is to expand insurance, so you will not have millions of uninsured people. I don't know how this is bad. ACA did not go far enough to completely resolve this problem. Healthcare should be a universal right, and not only for those who can afford it.

5) If you like your doctor you can keep your doctor. Employers will drop millions from health care plans as Obamacare premiums spike, (CBO projects), because it will be cheaper to let the government supply their employees healthcare.

Here's that sentence again. "government supplying healthcare". How do you think, that the government, through ACA, provides healthcare? This would be the case, if we have a single payer system, but we don't. ACA is a watered down version, of what should have been implemented.

The only thing the ACA does, is create these exchanges, where insurers, NOT the government, can "present" their plans to the public. The insurers are all private companies. The only thing the ACA forces them to do, is drop the existing conditions clause.

6) Ah yes, the proverbial death panel. Silly me. A quote from Harry Reid: "Seniors are going to have to learn to accept the inevitable"

Really? You still believe Sarah Palin? There is no death panel. We do not have a single payer system. It's the same ole, and nothing has changed. All providers are private and they decide on their own. The government does not have a death panel.

Where do you get your information from?

Oh, guess what, congress has their own insurance...It's not the same as ours, now is it...WHY???

And this is the ACA's fault? how?

I could go on and on and you would get tired of reading and it appears your mind is made up.

I'm sure you could, but based on this sample, what you presented here, is 2008 elections rhetoric. You seem to believe that the ACA puts the government in the business of insuring people. It does not. The insurers are still the same, greedy, private companies. All the ACA does, is "organize" how people can go to one place, to get information about how to get insured, because the law now says, that I must get insurance. That's it.

BUT, if you really have an open mind, do some research. Read the online version of the ACA

Perhaps you can take a dose of your own prescription?