Yesterday’s blog post by John Goodman and Thomas Saving of the National Center for Policy Analysis (NCPA) is the latest in an avalanche of unfounded assertions and distortions that have characterized the writings from this center for many years. The Dallas-based NCPA, established in 1983, describes itself as a “nonpartisan public policy research organization, with the goal to develop and promote private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector” (its website). This latest post puts forward, without context and with cherry-picked references, carefully selected statements that might seem to some to support their case—that deregulated markets will solve all of our health care problems. It would take a very long paper, or a number of papers, to respond to the many unfounded claims in their latest post.
Here are just three of their unfounded claims, together with references from the health policy literature and recent publications that rebut their assertions:
• Re the alleged advantages of privatized Medicare, see my 2006 book (Geyman, JP. Shredding the Social Contract: The Privatization of Medicare. Monroe, ME. Common Courage Press, 2006), my extensive article in The International Journal of Health Services (Geyman, JP. Privatization of Medicare: Toward dis-entitlement and betrayal of a social contract. Intl J Health Services 34 (4): 573-94, 2004), a 2009 report by the Committee on Energy and Commerce (Committee on Energy and Commerce. New report highlights Medicare Advantage insurers’ higher administrative spending. Washington, D.C., December 9, 2009), a 2010 article in the Wall Street Journal on retrenchment of private Medicare plans (Johnson, A. Private Medicare plans are retrenching. Wall Street Journal, November 19, 2010: B1), and a recent article in The New England Journal of Medicine describing the failures of regulated competition among private insurance companies in the Netherlands and calling into question managed competition as a model for private Medicare plans in the this country. (Okma, KGH, Marmor, TR, Oberlander, J. Managed competition for Medicare? Sobering lessons from the Netherlands. N Engl J Med, June 15, 2011)
• Re the alleged advantages of private health insurance over single-payer national health insurance, see my 2008 book on the private health insurance industry (Geyman, JP. Do Not Resuscitate: Why the Health Insurance Industry is Dying, and How We Must Replace It. Monroe, ME. Common Courage Press, 2008), my extensive article in The International Journal of Health Services (Geyman, JP. Myths and memes about single-payer health insurance in the United States: A rebuttal to conservative claims. Intl J Health Services 35 (1): 63-90, 2005), and a 2009 report by the Congressional Research Service, The Market Structure of the Health Insurance Industry (Austin, DA, Hungerford, TL. The Market Structure of the Health Insurance Industry. Washington, D.C, Congressional Research Service, November 17, 2009).
• Re the claimed efficiencies of competition in health care, see a multi-year study by the Community Tracking Study showing the failures of markets to be more efficient or to enhance the quality of health care (Nichols, LM et al. Are market forces strong enough to deliver efficient health care systems? Confidence is waning. Health Affairs (Millwood) 23 (2): 8-21, 2004) and a recent article by Mark Weisbrot, co-director of the Washington, D.C-based Center for Economic and Policy Research (Weisbrot, M. Problems of U.S health care are rooted in the private sector, despite right-wing claims. McClatchy-Tribune Information Services, July 20, 2011).
Health policy is too important to leave to the biased, well-funded propaganda
machine of these “research” organizations that keep promulgating policies that have long since been discredited, either by their failing track record or legitimate research studies.
John P. Geyman, M.D.
Professor emeritus of Family Medicine, University of Washington
This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.
Editorial: If U.S. is serious about debt, there’s a single-payer solution.
By the Editorial Board
St. Louis Post-Dispatch, August 10, 2011
If America truly is serious about dealing with its deficit problems, there’s a fairly simple solution. But you’re probably not going to like it: Enact a single-payer health care plan.
See, we told you weren’t going to like it.
But the fact is that everyone who has studied the deficit problem has agreed that it’s actually a health care problem.
That being the case — and nobody argues that it isn’t — there are two broad ways for the government to address its spiraling health care costs. One, shift more of those costs to recipients, by trimming benefits and/or extending eligibility ages and indexing eligibility to personal income. This is politically unpalatable, particularly to most Democrats, President Barack Obama being a conspicuous exception.
The second way for government to address its health costs is not to shift them, but to reduce them. This is what a single-payer health care system would do, largely by taking the for-profit players (insurance companies for the most part) out of the loop.
The advocacy group Physicians for a National Health Program estimates that “private insurance bureaucracy and paperwork consume one-third (31 percent) of every health care dollar. Streamlining payment through a single nonprofit payer would save more than $400 billion per year, enough to provide comprehensive, high-quality coverage for all Americans.”
Once everyone is covered, the government would have the clout to bring discipline into the wild west of health care spending.
Eventually, the United States will have a single-payer plan. But we’ll waste a lot of money and time getting there.
The Editorial Board of the St. Louis Post-Dispatch is right. Eventually we will have a single payer program, but only after wasting much more money and time.
Amidst all the crises confronting our country today—ranging from the deficit, rising unemployment and underemployment, mistrust of legislators and the government—there is another major crisis: the continued deterioration of primary care that threatens to break up the very foundation of U.S. health care. Underreported and widely misunderstood, the continued decline of primary care results in uncontrollable inflation of health care costs, decreased access to necessary care, increasing fragmentation and depersonalization of care, and unacceptable quality and outcomes of care. As health care costs spiral out of sight and consume an ever-increasing part of the country’s GDP, this trend, unless reversed, can destabilize and eventually bankrupt our health care system, and perhaps even our country.
This is the first in a series of four posts that will describe this crisis, how it has progressed over the last 50 years despite all attempts to deal with it, together with why it matters to all Americans and what can be done about it. These posts are drawn in part from my latest book Breaking Point: How the Primary Care Crisis Endangers the Lives of Americans, just released by Copernicus-Healthcare and soon to appear as an ebook on Amazon.
Primary care is a term that many are unfamiliar with, often even including within the health professions. We’re talking here about generalist physicians and other health professionals working with them, in the ongoing care of unselected (not referred) patients of all ages for whatever problems they need to seek care. This is in the front lines of health care, for individuals and families, in their own community setting. General practitioners in earlier years represented this kind of physician. Since the 1960s, four other kinds of generalist physicians have evolved as various kinds of medical education programs have been developed—family practice (now family medicine), general internal medicine (for adults), general pediatrics (for children), and osteopathic physicians (with training that includes manipulative therapies).
Most advanced countries have at least 50 percent of their physicians as generalists at the foundation of their health care systems. While the U.S. had such a base until World War II, that number has declined over the last 60 years to less than 30 percent. And that number is dropping fast. Less than one in five U.S. medical graduates are now entering a primary care specialty, while most opt for better-paying, more attractive lifestyles of other specialties. (Pear, R. Doctor shortage proves obstacle to Obama goals. New York Times, April 27, 2010: A1) We now have a specialist-dominated system without anywhere near the number of generalists needed, as shown by Figure 1 in 2025. (Colwill, JM, Cultice, JM, Kruse, RI. Will generalist physician supply meet demands of an increasing and aging population? Health Affairs Web Exclusive, April 29, 2008, w 232-41)
In his recent article in The New Yorker, Dr. Atul Gawande, general and endocrine surgeon at Harvard Medical School, described the importance of the generalist in these compelling terms:
“Providing health care is like building a house. The task requires experts, expensive equipment and materials, and a huge amount of coordination. Imagine that, instead of paying a contractor to pull a team together and keep them on track, you paid an electrician for every outlet he recommends, a plumber for every faucet, and a carpenter for every cabinet. Would you be surprised if you got a house with a thousand outlets, faucets, and cabinets, at three times the cost you expected, and the whole thing fell apart a couple of years later? Getting the country’s best electrician on the job (he trained at Harvard, somebody tells you) isn’t going to solve this problem. Nor will changing the person who writes him the check.” (2) (Gawande, A. The cost conundrum: What a Texas town can teach us about healthcare. The New Yorker, June 9, 2009: 34-44.)
Advanced countries around the world with higher-performing health care systems than the U.S. have all build their systems on a solid base of primary, generalist care, readily available to patients for common health care problems where they live. Secondary care includes more specialized care for less common problems, while tertiary care deals with rare or unusual medical problems in university medical centers or other large urban hospitals. In most of those countries, specialists serve as consultants for particular medical problems, while primary care physicians provide ongoing continuity of care for all of their patients’ problems.
This is how a 2008 report of the General Accounting Office sums up the primary care crisis in this country:
“Health professional workforce projections that are mostly silent on the future supply of and demand for primary care services are symptomatic of an ongoing decline in the nation’s financial support for primary care medicine. Ample research in recent years concludes that the nation’s over reliance on specialty services at the expense of primary care leads to a health care system that is less efficient. At the same time, research shows that preventive care, care coordination for the chronically ill, and continuity of care—all hallmarks of primary care medicine—can achieve better health outcomes and cost savings. Despite these findings, the nation’s current financing mechanisms result in an atomized and uncoordinated system of care that rewards expensive procedure-based services while undervaluing primary care services.” (GAO. Primary Care Professionals: Recent Supply Trends, Projections and Valuation of Services. Washington, D.C. GAO-08-4721. Government Accounting Office, February 2008, p 15)
In our next post, we will see how our upside-down system does not work, and how it is responsible in large part for most of our system problems, whether at the level of individual health care or population-based care.
This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.
Democrats Challenging Administration on Medicaid
By Robert Pear
The New York Times, August 8, 2011
In an unusual break with the White House, the Democratic leaders of Congress told the Supreme Court on Monday that President Obama was pursuing a misguided interpretation of federal Medicaid law that made it more difficult for low-income people to obtain health care.
Faced with severe budget problems, many states have reduced Medicaid payment rates for doctors, dentists, hospitals, pharmacies, nursing homes and other providers. In many parts of the country, payment rates are so low that Medicaid recipients have difficulty finding doctors to take them.
Federal law says Medicaid rates must be “sufficient to enlist enough providers” so that Medicaid beneficiaries have access to care to the same extent as the general population in an area.
The issue, of immense importance to poor people and states, comes to the Supreme Court in a set of cases consolidated under the name Douglas v. Independent Living Center of Southern California, No. 09-958. The court plans to hear oral arguments in October, with a decision expected by the spring. The original plaintiffs in the case, Medicaid beneficiaries and providers, say they were harmed by California’s decision to cut payment rates that were already among the lowest in the country.
The federal Medicaid law does not explicitly allow such suits. But the United States Court of Appeals for the Ninth Circuit, in San Francisco, said beneficiaries and providers could sue under the Constitution’s supremacy clause, which makes federal law “the supreme law of the land.”
The Justice Department, siding with California, told the court in May that no federal law allowed individuals to sue states to enforce this standard.
President Obama’s Affordable Care Act relies heavily on the expansion of Medicaid to cover low-income individuals who are uninsured. Yet at the same time, his administration is appealing to the Supreme Court, under the supremacy clause, the federal government’s right to critically underfund the Medicaid program to the extent that patients will have significant impairment of their access to health care.
As we have stated many times in these messages, a severely underfunded welfare program for low-income individuals that clearly impairs access violates our sense of equity and health care justice. Apparently President Obama does not share this view. Otherwise, as a constitutional lawyer, why would he allow the Justice Department to take to the Supreme Court a case that would permit his administration to violate the law that says that Medicaid rates must be sufficient to enlist enough providers so that Medicaid beneficiaries have access to care to the same extent as the general population?
Where does this lead? Yesterday, in the context of reducing the deficit, he said that the country needs “modest adjustments to health care programs like Medicare.” More cuts.
Try doing that in nations with universal social insurance programs. It will never happen. But in our fragmented system, there is an opening for battles based on demographic divides. The tax-cutting, government-shrinking young rebels are taking up the cause of putting greedy geezers in their place.
Having been raised in the 40s and 50s – a time when there was great hope of an egalitarian America – I have to ask myself that trite but timely question, what kind of a country have we become?
This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.
Medicare costs for hospice up 70%
By Kelly Kennedy
USA Today, August 7, 2011
Medicare costs for hospice care have increased more than in any other health care sector as for-profit companies continue to gain a larger share of the end-of-life medical market, government records show.
A recent report by the inspector general for Health and Human Services, which oversees Medicare, found for-profit hospices were paid 29% more per beneficiary than non-profit hospices.
At the same time, some of the nation’s largest for-profit hospice companies are paying multimillion-dollar settlements for fraud claims and facing multiple investigations from state and federal law enforcement agencies.
Critics say costs have also increased because for-profit organizations have cherry-picked patients who live the longest and require the least amount of care — such as those with dementia or Alzheimer’s, rather than those with cancer.
“Certain hospices seem to be seeking out beneficiaries with particular characteristics, and these beneficiaries are often found in nursing facilities,” said Jodi Nudelman, a regional inspector general for HHS in a webcast about the report.
In a growing number of cases, hospices are collecting the same daily rate for visiting patients in nursing facilities as other hospice programs that also provide patients’ room, board and medical care not related to their terminal illness.
Report of the Inspector General of HHS:
PNHP has long advocated removing for-profit corporations, with their passive investors, from the health care equation. This report on hospices from the HHS Inspector General provides more compelling support for this view.
For-profit hospices that provide care to Medicare patients have been ripping off taxpayers by cherry-picking less expensive patients, collecting much larger fees by providing services prematurely, and, worst of all, collecting full fees for merely providing what is not much more than house-call-type services in nursing homes rather than providing the full range of services expected in hospice care. Their multi-million dollar fraud settlements don’t seem to deter them.
It is imperative that we remove passive investors and their corporate executive goons from health care.
Doctors say Medi-Cal reimbursement is too low
By Dustin Corcoran
San Francisco Chronicle, August 4, 2010
Medi-Cal covers essential health care services for the poorest and most vulnerable Californians, including seniors, pregnant women, children and people with disabilities. Despite the lifesaving care and preventive treatment that so many Medi-Cal patients have received, the state is planning drastic cutbacks to Medi-Cal that will irreparably harm patients and cost taxpayers more in expensive hospitalizations and emergency care.
The Legislature passed, and Gov. Jerry Brown signed, AB97, which includes a 10 percent reduction in Medi-Cal payment rates to physicians, hospitals, nursing homes and other providers, patient co-payments ($50 per emergency room visit, $5 per physician visit, $100 per day in the hospital), and a limit of seven physician office visits per year. If these cuts are allowed to take place, Medi-Cal would pay doctors just $11 per patient visit, just a fraction of what it would cost to take your dog to the veterinarian.
Cuts in reimbursement rates force physicians to reduce the number of Medi-Cal patients they can see, and now more than half of all Medi-Cal patients say they can’t find a doctor.
Currently, Medi-Cal is the source of health care for 1 in 5 Californians (about 7 million). With the implementation of health care reform right around the corner, 3 million more uninsured will soon be added to the state’s Medi-Cal program. But how can we adequately provide more care to more people with fewer resources? California already ranks last in Medicaid payment rates per enrollee.
California has a Democratic governor and a Democratic legislature, yet look at what they just did. Although California already ranks last in Medicaid payment rates, they are reducing payments another 10 percent. Much worse, they are imposing unaffordable co-payments on these low-income patients, and are not allowing them more than an arbitrary seven office visits a year. Punishment of patients and their health care professionals is not the reform that we needed.
Whether or not California is successful in obtaining federal approval to impose these cuts, this action confirms that we cannot allow our government to condemn low-income patients to a bottom-tier welfare program, yet this is precisely what the Affordable Care Act calls for.
Let’s fix Medicare and expand it so that we can bring in everyone under an umbrella that isn’t riddled with leaks.
Proposals To Forbid First-Dollar Coverage For Medicare Beneficiaries
By Bruce Vladeck, Ph.D
Kaiser Health News, August 2, 2011
The usual laundry lists of proposals for Medicare savings are already being circulated throughout official Washington. Most of these ideas have been around for years, and have never gotten past the talking stages because of political opposition or because they are simply bad ideas. But one especially pernicious proposal appears to have increasing traction among both politicians and policy analysts: the prohibition of first-dollar coverage in Medicare supplemental insurance, whether purchased in the individual markets or provided as a retiree benefit.
This proposal is based on a simple and seemingly self-evident syllogism. Medicare beneficiaries with supplemental insurance that provides them with first-dollar coverage by paying their deductibles and co-payments use more services than the small minority of beneficiaries without such coverage. Hence, forbidding such coverage would reduce use, thereby saving Medicare a pile of money.
American policymakers, and the health economists who enable them, are obsessed with issues of consumer demand, and the notion that health care is so expensive because Americans are so eager to consume it. In fact, insured Americans already have the highest out-of-pocket liabilities in the developed world, and use fewer services initiated by consumers. In the absence of supplemental coverage Medicare beneficiaries would have still higher out-of-pocket liabilities than other insured Americans, which is why essentially every beneficiary who can afford it seeks extra coverage. But while overuse of some services in some communities is inarguably a part of the Medicare cost problem, there is no compelling evidence that consumer-generated demand is a significant part of the problem. Whatever the political rhetoric, Medicare beneficiaries simply aren’t banging down the doors of physicians’ offices demanding extra MRIs and surgical procedures.
Quite the contrary: during the past decade, Congress has eliminated cost-sharing for most Medicare preventive services in response to concerns about the underuse of such services, and because of evidence that out-of-pocket costs were a significant deterrent, especially for less affluent and minority beneficiaries. More generally, while the evidence has been clear since the RAND experiments of the early 1970s that out-of-pocket costs reduce health care use, it’s also been clear that their effect is inversely related to disposable income: the less income a person has, the greater the effect of copayments and deductibles, not to mention the greater likelihood of poor health.
That’s why Medicaid historically forbade deductibles, and now permits them at only nominal levels. More importantly, the growth in out-of-pocket costs for health care consumers during the last decade or so has provided an abundance of illustrations of the basic fact that consumers deterred from seeking health care for economic reasons are just as likely to forego needed services as “discretionary” ones, and that that phenomenon is further correlated with income. Faced with higher out-of-pocket expenses, consumers may get fewer Botox treatments or buy fewer laxatives, but they also skip visits for management of their heart disease and diabetes, and don’t fill their prescriptions for hypertension medication.
The reason health insurance exists in the first place, after all, is to relieve individuals who are not medical experts of the need to figure out whether they can afford any particular medical service. In a rational world, policymakers worried about unnecessary or inappropriate use of specific services would just refuse to pay for those services. But in the contemporary American political environment, they might be accused of “rationing” or “death panels,” so they stay away. Instead, they appear to be willing, once again, to impose the consequences of their inability to control costs on those least able to bear them.
Unreasonable consumer demand is not a significant source of our high health care spending. Measures that deprive patients of beneficial health care services by imposing penalties designed to suppress consumer demand are not only inappropriate, but are truly heartless.
By Johnathon Ross, M.D., M.P.H.
New England Journal of Medicine, June 16, 2011
Re ‘Managed Competition for Medicare? Sobering Lessons from the Netherlands,’ by Kieke, Okma, Marmor and Oberlander (NEJM, June 15):
The fundamental flaw in much of the market rhetoric we hear is that health care is not an ordinary product and will never be regulated by market forces.
You can’t exit the market when you are very ill – you buy or die. The doctor not the patient orders the tests and treatments.
The search for information about symptoms is why you go to the doctor. Even a good doctor is sometimes unsure of a patient’s diagnosis or what the long-term costs will be until after some very expensive tests are done.
We have all heard about people with chest pain who were cured with five dollars worth of Maalox and those who needed $100,000 worth of open heart surgery. Americans already face high out-of-pocket costs and it has not controlled health care costs or insurance premiums.
If you are in agony from a ruptured appendix are you going to haggle with the surgeon over his fee on the way to the operating room? The most complex and costly services are the least negotiable.
If open heart surgery was on sale would you have two? The most expensive services are necessary but not really desired like a new car or a Rolex.
Most economists recognize that health care is not a normal product and not subject to the usual market forces. When there is market failure (and health care is a classic example), then the second best solution, regulation, is needed.
The health care systems wit the best outcomes for the least cost are all highly regulated or socialized. (See the Commonwealth Fund data on this fact.) Even here in the U.S. the best quality at reasonably low cost is being turned out by the VA, a completely socialized system.
We already have a national health insurance system that works for the sick elderly and disabled called Medicare. Medicare spends only 3 percent on insurance overhead vs. private insurance which regularly spends 20 percent or more. We should improve and expand Medicare to all. Multiple studies by solid health economists suggest that we could save over $400 billion by the simplicity of this system. This is enough to cover all the uninsured and improve coverage for all the rest of us.
As noted by the authors of this paper, an unanticipated outcome of the Dutch competition was increased cost due to complexity.
Florida submits Medicaid plan based on managed care to feds for approval
By John Kennedy
The Palm Beach Post, August 1, 2011
Florida officials sent a wide-ranging application Monday to the federal government for steering almost 3 million Medicaid patients into managed care, a major shift that has sparked heavy lobbying from critics who demand the Obama administration deny the move.
But Republican Gov. Rick Scott said he was confident the Centers for Medicare and Medicaid Services (CMS) would approve the request, which supporters say could save the state more than $1 billion when fully in place.
“I think that what we passed is going to be a model for Medicaid,” said Scott, a former health care executive. “A Medicaid recipient ought to have choice, just like all of us have choice for what insurance we want to buy. I think that’s positive.”
But he added, “We’ve got to make sure it’s a program we can afford as taxpayers. I think what we did will do those two things.”
State to limit HMOs in state employee insurance program
August 2, 2011
Florida is changing part of its state-employee health insurance program to offer only one HMO in each county. The state Department of Management Services, which oversees employee insurance, said changes in the program would save an estimated $400 million over two years. The changes also would require thousands of state employees to switch to different HMOs, a process that would begin in late September.
Insurers UnitedHealthcare of Florida and Coventry Health Care of Florida filed formal protests Monday against the changes. United argued, for example, that the changes could actually increase costs. That is because United — which would be shut out of the program in much of the state — says it can negotiate better discounts than other HMOs.
But Gov. Rick Scott and DMS Secretary Jack Miles touted the savings from the plan.
“Saving taxpayer dollars wasn’t just a campaign gimmick,” Scott said in a news release. “I meant what I said when I ran for office, and I urge Secretary Miles and his team to keep pushing hard every day to deliver more savings and better results.”
Although Rick Scott was certainly tarnished when his company, Columbia/HCA paid the largest fraud settlement in U.S. history, he has nevertheless been chosen by Florida Republicans to serve as their governor. One of his messages was to achieve savings in health care by promoting choice. Is he touting a fundamental economic principle, or is he using this rhetoric to masquerade his conservative ideology?
Look at what he is trying to do with Medicaid in his state. He wants to force Medicaid patients into managed care organizations claiming that giving them the right to choose insurers will reduce costs. If so, then why isn’t taking away from them their right to choose their health care professionals and institutions going to increase costs?
What about the state employee health insurance program? He is going to save money by taking away the employees’ choice of HMOs, limiting each county to only one HMO for government employees.
His use of the term “choice” is another fraud, but it is no worse than the fraud that progressives perpetrated when they campaigned for health reform using the slogan of “CHOICE.” Their proposal offered only choice of restrictive private health plans while preventing true choice of health care professionals and institutions that people could have had through a Medicare-like national health program.
Today’s final passage of the Budget Control Act doesn’t bode well for the future of placing policy above political rhetoric. In the name of “saving the economy,” the Democrats cooperated with the Republicans in slashing public programs while failing to tap important revenue sources in our nation that happens to have one of the lowest tax burdens of all industrialized nations.
Will we ever have the choice of truly responsible political leaders? It seems unlikely as long as Americans rely on billionaire disinformation campaigns for their understanding of public policy options.
TEXT OF BUDGET CONTROL ACT AMENDMENT
House of Representatives
Rules Committee, August 1, 2011
(a) SHORT TITLE.—This Act may be cited as the “Budget Control Act of 2011”
SEC. 302. ENFORCEMENT OF BUDGET GOAL
(8) IMPLEMENTING DIRECT SPENDING REDUCTIONS. — On the date specified in paragraph (4) during each applicable year, OMB shall prepare and the President shall order a sequestration, effective upon issuance, of nonexempt direct spending to achieve the direct spending reduction calculated pursuant to paragraphs (5) and (6). When implementing the sequestration of direct spending pursuant to this paragraph, OMB shall follow the procedures specified in section 6 of the Statutory Pay-As-You-Go Act of 2010, the exemptions specified in section 255, and the special rules specified in section 256, except that the percentage reduction for the Medicare programs specified in section 256(d) shall not be more than 2 percent for a fiscal year.
(9) ADJUSTMENT FOR MEDICARE. — If the percentage reduction for the Medicare programs would exceed 2 percent for a fiscal year in the absence of paragraph (8), OMB shall increase the reduction for all other discretionary appropriations and direct spending under paragraph (6) by a uniform percentage to a level sufficient to achieve the reduction required by paragraph (6) in the non-defense function.
The deficit reduction agreement will likely result in an automatic two percent reduction in Medicare payments. The only way that can be prevented is by an agreement of a special twelve member bipartisan Joint Select Committee on Deficit Reduction to find alternative methods of reducing the deficit, and then to have their recommendations approved by an up-or-down vote of both current houses of Congress.
The probability of reaching a complex and controversial agreement that leaves Medicare totally unscathed is almost zero in this dysfunctional Congress. President Obama has already demonstrated that he is quite willing to capitulate to the demands of the right-wing obstructionists in Congress. This next time it will be much easier since the terms of the extortion have already been included in this legislation. Since Medicare remains a prime target for the reactionaries, it is very unlikely that it can clear this hurdle without further reductions.
Medicare payment rates have not been increasing at the same level as private insurance rates, understandably creating considerable uneasiness amongst the providers of health care. The Affordable Care Act will further reduce some Medicare payments, and now the Budget Control Act of 2011 will reduce them even further.
These trends will motivate the wealthy owners of Congress to seek private options such as Paul Ryan’s premium support (voucher) proposal, while diminishing their support of Medicare as an egalitarian system of social insurance. With reductions in funding and departure of the healthy and wealthy, Medicare would inevitably transition into a welfare program.
Happy Birthday Medicare! (Oh, that wasn’t nice.)
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