Obamacare Did NOT Fix Medicare — It Made It Worse…

Politico reported this morning that House Minority Leader Hoyer defended Obamacare as “fixing” Medicare: “We believe that the health care bill — and very frankly CBO believes the health care bill will do something that Medicare very badly needs, and that is to constrain price escalation in health care.”  Where to begin with this statement…?

  • First, a CBO study released just last week found that prior Medicare demonstration programs designed to control costs – along the same lines as those included in Obamacare – did not work at controlling costs.  What’s more, CBO added that Medicare’s fee-for-service system presents “inherent” obstacles to reducing cost growth.
  • Second, the projections that Leader Hoyer said will “constrain price escalation” are based on arbitrary payment reductions that CBO and virtually every other non-partisan expert has concluded are unrealistic.  For instance, the Medicare actuary found that provisions in Obamacare “are unlikely to be sustainable on a permanent annual basis.”  Likewise, CBO concluded that the Medicare reductions will be “difficult to sustain for a long period.”
  • Third, the Medicare “savings” have already been spent – not to improve Medicare’s solvency, but to create Obamacare’s new entitlements.  Medicare actuary Foster noted that the Medicare provisions in Obamacare “cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions under the PPACA) and to extend the [Medicare] trust fund,” and CBO agreed, writing that the Medicare provisions in Obamacare “would not enhance the ability of the government to pay for future Medicare benefits.”  Even President Obama, in an interview with Fox News, admitted that “You can’t say that you are saving on Medicare and then spending the money twice.”

So in sum: The demonstration projects designed to save money likely won’t work, the arbitrary payment reductions can’t be sustained – and even if either of the first two scenarios hold, the money saved will not actually help Medicare, because it’s already been spent to pay for Obamacare’s new entitlements.  That’s not saving Medicare – that’s making it worse.