FixHealthCarePolicy

Is Obamacare a Budget Buster, Medicare Disaster, or Both?

This week National Journal Online asked their stable of health experts: Would the leading Democratic health care reform proposals result in a better or worse Medicare?

Heritage Foundation Vice President for Domestic Policy Stuart Butler responded:

“On the face of it, the reform proposals would help ease the $37 trillion unfunded obligations of Medicare, making it a tad more viable for current and future seniors. But the savings on one credit card just become new liabilities on another. Moreover, if the key cuts actually went into place it would be a disaster for seniors. In the Reid bill, physician fees are to be cut more than 20 percent in 2011 and kept there indefinitely. That would cause docs to leave in droves and mean care cutbacks from those who remain. And Medicare’s chief actuary says payment rate cuts will cause up to 20 percent of Medicare hospitals to become unprofitable. Medicare Advantage, it’s true, would not cut to the bone, but there will be a significant erosion of benefits and far fewer plans available.” (more…)

Tags: $37 trillion, AARP, American Medical Association, Medicare, Medicare Advantage, Medicare commission

The Three Senators Who Could Save You From Government-Run Health Care

Sen. Joe Lieberman (I-CT) may have announced that he expects to vote for Majority Leader Harry Reid’s (D-NV) health bill this afternoon, but that leaves Reid with just 59 votes. He needs to get all three of the following holdouts to sign on the dotted line by Christmas:

Sen. Ben Nelson (D-NE)
As we have thoroughly documented before, there are nearly two dozen abortion funding prohibitions in current federal law that reflect two basic principles: 1) that, except in situations involving the life of the mother, rape and incest, the federal government will not pay for or reimburse for abortions under federal programs like Medicaid; and 2) that, with the same exceptions listed above, the federal government will not subsidize insurance plans that offer coverage for abortion. This is why the Federal Employee Health Benefits (FEHB), military insurance through TRICARE, and the Indian Health Service do not cover abortion unless the mother’s life is at risk.

Reid’s health bill would change all that, forcing Americans to subsidize elective abortions for the first time in more than 30 years. Nelson told Face the Nation this Sunday: “I still have the unique issue of abortion. I’ve said I can’t support the bill with the abortion language that’s there.” (more…)

Tags: Medicare, Medicare Advantage, Sen. Ben Nelson, Sen. Claire McCaskill, Sen. James Webb, taxpayer-funded abortions, trillion dollar deficits

Obamacare in the Senate: Medicare Advantage, Medicare Cuts, Home Health Care and Entitlements

Debate continues on the Senate floor on the Patient Protection and Affordable Care Act of 2009 (H.R.3590), and the focus continues to be on Medicare and Medicare Advantage. While proposing spending cuts in one program to create another, the Senate leadership is claiming that all of these Medicare cuts are possible without cutting benefits or services in current Medicare programs, such as Medicare Advantage and Home Health Care.

Stabenow’s Medicare Advantage Amendment. Senator Debbie Stabenow (D-MI) proposed an amendment which would ensure that spending reductions to the Medicare Advantage program would not result in a reduction or elimination in benefits that enrollees would receive. Sen. Stabenow’s amendment passed 97-1.

This amendment is a curious, as well as popular. Its popularity may reflect the substance of the legislation. The reason: Senate Majority Leader Harry Reid’s (D-NV) bill includes $118.1 billion in cuts to the Medicare Advantage program. It’s hard to imagine how cuts of this magnitude would not affect benefits for enrollees of the program — now more than one in five seniors. Examining similar provisions in the giant House-passed bill, the Chief Actuary of the Centers for Medicare and Medicaid Services said comparable spending cuts to Medicare Advantage would “reduce MA rebates to plans and thereby result in less generous benefit packages.”

The Hatch Amendment on Medicare Advantage Cuts. Senator Orrin Hatch (R-UT) made a motion to commit the bill to the Senate Finance Committee to remove Medicare spending cuts, which would have guaranteed Sen. Stabenow’s promise to protect the Medicare Advantage program. Sen. Hatch’s amendment failed with a vote of 41-57.

The Kerry Amendment on Home Health. Senator John Kerry (D-MA) offered an amendment that the Senate bill would guarantee home health benefits that Medicare enrollees receive under title XVIII of the Social Security Act. The Kerry Amendment to guarantee these benefits was very popular. It passed 96-0.

The Johanns Amendment on Home Health. Senator Mike Johanns (R-NE) then offered a motion to commit the bill to the Senate Finance Committee to remove spending cuts to the same home health benefits that Sen. Kerry’s amendment seeks to preserve. The health care bill currently contains $42.1 billion in cuts to home health benefits over ten years. Sen. Johann’s amendment was defeated by a vote of 41-53.

Whitehouse Amendment to Preserve Social Security. Senator Sheldon Whitehouse (D-RI) offered an amendment to ensure that surpluses created by the health care bill in the Social Security trust fund and savings generated by the CLASS Act would be reserved for Social Security and the CLASS program, respectively. The Senate voted to preserve savings from these programs 98-0.

It is worth noting that the Senate bill delays spending until after revenue collection begins. In examining the CLASS Act provisions, the Congressional Budget Office says, “…the program’s cash flows would show net receipts for a number of years, followed by net outlays in subsequent decades.”

Thune Amendment on Entitlement Spending. Senator John Thune (R-SD) proposed an amendment which would remove the CLASS act altogether in order to eliminate new entitlement spending and limit government control over health care. Thune warned that Congress should not be creating more problems like those inherent in Medicare, which, like the CLASS Act, was also intended to be fiscally self-reliant on premiums and revenues collected by users of the program. Sen. Thune’s amendment was defeated by a vote of 51-47.

Kathryn Nix currently is a member of the Young Leaders Program at the Heritage Foundation. For more information on interning at Heritage, please visit: http://www.heritage.org/about/departments/ylp.cfm.

Tags: Amendments, entitlement spending, Home Health Care, Medicare Advantage, Senate Health Bill

Morning Bell: The Pelosi Blueprint for Government Run Health Care

The new House health care bill (H.R. 3962) unveiled by Speaker Nancy Pelosi (D-CA) yesterday clocks in at 1,990 pages and about 400,000 words. As written, the bill purports to cost only $1.05 trillion over the first ten years and is paid for by over $700 billion in tax increases and cuts to Medicare Advantage and Medicare prescription drug payments. But as troubling as those numbers are, the scariest thing about the bill is the solid foundation it lays for a complete government take over of the health care sector of our economy.

The Washington Post describes the bill as “creating an expensive new entitlement program (subsidies to purchase health insurance) and dramatically expanding an existing one (Medicaid).” This is true by itself, but the Post later dismissively adds: “If you’ve noticed that we haven’t talked about the public option in the House bill, that’s not an oversight. For all the fury over the issue, it doesn’t matter that much; the CBO estimates that the government-run plan would actually have slightly higher premiums.” This is a breathtakingly naive statement by the Post and demonstrates that they have not yet fully grasped how all the different elements of the bill are designed to interact to produce President Barack Obama’s desired outcome. (more…)

Tags: 3962, Barack Obama, CBO, debt, deficit, entitlement, government takeover, Medicaid, Medicare, Medicare Advantage, Nancy Pelosi, Obama Health Care Plan, tax increases

What to Look For in the Latest House Health Care Bill

House Speaker Nancy Pelosi just unveiled a hulking 1,990 page House health care bill (H.R. 3962). The latest product, which dwarfs the 1,342 page Clinton Health Plan of 1993, is the latest evolution of the House process, which started with H.R. 3200. The House Speaker made a number of general comments, saying that the legislation would lower costs for American families, enhance the solvency of the Medicare program, and add 36 million Americans to the health insurance rolls.

On the crucial question of financing, the Speaker made a point of saying that the bill is fiscally responsible and comes in under the $900 billion target set by President Obama, and would not expand the deficit. Of course, the Congressional Budget Office has not yet issued a formal “score”- or estimate- of the final product. So, it is hard to determine how, or if, the legislation would bend the health care cost curve downward, as President Obama has promised as a key ingredient in health care reform. (more…)

Tags: Baucus bill, health care reform, HR 3200, Medicare Advantage, Nancy Pelosi, Obama Health Care Plan, pelosi health bill, public option

Video: Cutting Medicare Means Less Medicare

Despite Washington’s repeated claims that Medicare beneficiaries won’t see any cuts in their benefits, Robert Moffit points out that the health legislation in Congress has the program in its sites. Medicare Advantage, which is used by nearly one in four senior citizens on Medicare, is a system of private plans that beneficiaries can choose from to receive additional services. While private plans in Medicare Advantage get more payments than traditional Medicare, those payments mean more benefits covered for seniors like preventive screening, routine eye and hearing tests, additional hospitalization and nursing care.

The Congressional Budget Office director contradicted the White House by testifying that Medicare benefits will be cut, meaning seniors will have fewer private options for their health care needs. If Congress is going to secure any “savings” in Medicare, they should go back into making the program sustainable — not as a financing mechanism for expanded government-run health care.

Tags: Congressional Budget Office, Medicare, Medicare Advantage

Washington Post Editorial Highlights “Medicare Mythmaking”

A recent Washington Post editorial takes on President Obama’s repeated assertion that health care overhauls being proposed in Congress wouldn’t impact the benefits for Medicare beneficiaries.

Congress currently is looking at cutting payments for Medicare Advantage, a system of private plans that beneficiaries can choose from to receive additional services. While private plans in Medicare Advantage get more payments than traditional Medicare, those payments mean more benefits covered for seniors like preventive screening, routine eye and hearing tests, additional hospitalization and nursing care.

Quoting the President who wants to end “unwarranted subsidies in Medicare that go to insurance companies — subsidies that do everything to pad their profits but don’t improve the care of seniors,” the editorial counters that insurers are required by law to put a large chunk of the subsidies back into those extra benefits, “which is why the plans have been growing so fast.”

The danger of seniors losing those extra benefits isn’t the only problem facing Medicare, the editorial notes. The federal health program faces a $200 billion-plus issue in paying for the “doc fix” or scheduled cut to physician reimbursements that Congress ends up reversing every year.

Heritage health expert Robert Moffit says the best policy would be to build on the success of Medicare Advantage by opening up its competitive bidding system to traditional Medicare and private plans. Full Medicare competition would be a “sound test run” for those who push for a government-run health care option modeled after Medicare, Moffit said in a new Web Memo.

Tags: doc fix, government-run health care, Medicare, Medicare Advantage