Democrats’ Medicare Chutzpah

One little-noticed element in the “fiscal cliff” debate hasn’t attracted much attention – the glaring hypocrisy of Democrats when it comes to the Medicare program.  Last Thursday, Democrats in the House offered a motion to recommit spending reduction legislation (full text available here) that would have required HHS to disclose:

  1. The number of Medicare beneficiaries in such district…who, at any time during the ten-year period beginning on the first day of the first fiscal year that begins after the date of the enactment of this Act, will A) lose coverage under the Medicare program… or B) experience an increase in premiums, cost-sharing, or other out-of-pocket costs under such respective program as a result of the implementation of this Act; and
  2. The name and location of each hospital and nursing facility that would experience a reduction in payments under the Medicare program…as a result of the implementation of this Act.

It’s more than a bit rich for the Democrat leadership to offer such a motion, given that Obamacare:

  • Takes “half a trillion dollars out of Medicare” to pay for Obamacare’s new programs, according to none other than Nancy Pelosi;
  • Raises Part D premiums, according to the Congressional Budget Office, so that Big Pharma can benefit from its “rock-solid deal” struck behind closed doors with President Obama and Congressional Democrats;
  • Cuts Medicare Advantage by more than $300 billion, which will reduce the program’s enrollment by half and plan choices by two-thirds, causing millions of seniors to lose their current health insurance; and
  • Makes up to 40 percent of providers unprofitable over the long-term, according to the non-partisan Medicare actuary, potentially forcing providers “to withdraw from providing services to Medicare beneficiaries.”

The Medicare program is in dire need of reform to make it fiscally sustainable.  But no one should take lessons on entitlement “reform” from the crowd that – by its own admission – raided the Medicare program to pay for yet more irresponsible entitlement spending.

Donald Berwick Rations the Facts With His Eyes Open

Former Medicare chief Dr. Donald Berwick published an op-ed in today’s Boston Globe in which he endorses Professor Elizabeth Warren for her support of Obamacare.  Unfortunately, however, the column reveals that Dr. Berwick must not have learned much about the Medicare program during his time at CMS, given many of his statements:

“Obamacare reduce costs…”  That’s not what Medicare’s own actuary said.  Earlier this year, the actuary published an analysis indicating the law would raise costs by more than $478 billion.  Last year, the actuary testified before Congress, calling “False” the Administration’s stated goal of reducing health care costs.

“It targets waste, fraud, and abuse, reduces unnecessary subsidies to insurance companies…”  Again, that’s not what Medicare’s own actuary said.  He has concluded that over the long-term, up to 40 percent of providers would become unprofitable due to Obamacare, and could “have to withdraw from providing services to Medicare beneficiaries.”  Just this week, an Alabama hospital took a different course – it decided to shut down entirely, due to the impact of Obamacare on its business model.

“President Obama’s health reforms do not cut any guaranteed Medicare benefits…”  This statement is manifestly FALSE, as we have previously demonstrated.  Obamacare cut benefits for wealthy seniors, by forcing them to pay more for their Medicare coverage.  And President Obama’s budget proposed even further benefit cuts – new means-testing, additional co-payments, and higher premiums.  In many cases, these changes are actually good policy, but they’re still cuts to “guaranteed benefits” – and no one should be dishonest enough to claim that they aren’t.

“Thanks to Obamacare, seniors can now get a free annual wellness visit…”  Also incorrect.  These services may be delivered without any out-of-pocket cost-sharing, but they are NOT “free” – someone ends up paying for them.  In fact, all seniors end up paying, as do all Americans – through higher taxpayer spending on Medicare, and higher Part B premiums for seniors.

“Medicare and Medicaid both face challenges today, but not because of Obamacare.  The challenges exist throughout the health care system, mainly in the form of rising costs.”  The implication is that Medicare isn’t the problem – that health costs as a whole are a problem.  But the fact is that Medicare – and particularly its focus on fee-for-service medicine – has been one of the driving elements of rising costs and inefficiency in our health care system.  The non-partisan Congressional Budget Office, in a January report analyzing dozens of Medicare demonstration programs, said these programs did not contain health costs, precisely because of the flawed incentives included in fee-for-service medicine: “Demonstrations aimed at reducing spending and increasing quality of care face significant challenges in overcoming the incentives inherent in Medicare’s fee-for-service payment system, which rewards providers for delivering more care.”  In other words, Medicare isn’t the solution to health care costs – it’s the problem.

Dr. Berwick’s tenure at CMS was cut short due to his many controversial remarks, most notably his (in)famous interview in which he claimed that “The decision is not whether or not we will ration care – the decision is whether we will ration with our eyes open.”  Given his economies with accuracy in the op-ed, many may wonder if Dr. Berwick has also decided to ration the true facts about Obamacare with his eyes open.

The Left Defends an Inefficient Medicare System

One well-hidden fact in yesterday’s Kaiser Family Foundation report regarding premium support is this – even the Kaiser Foundation admits that in half the country, private Medicare Advantage plans are more efficient than government-run Medicare.  Take a look at the summary on page 4:

Among beneficiaries in the traditional Medicare program [under a premium support proposal], about half (53%) – 18.5 million beneficiaries – would be expected to pay higher Medicare premiums for coverage under the traditional Medicare program, because about half of beneficiaries in the traditional Medicare program live in counties where traditional Medicare costs were higher than the benchmark.

What that sentence means is that, in about half of the country, seniors private Medicare Advantage plans are cheaper than government-run Medicare.  Under premium support, these seniors would not have to pay more to afford coverage – they could switch to a cheaper private plan, or pay more to maintain their more expensive coverage.

The Kaiser report is far from the only study finding that private plans are more efficient than Medicare in many, if not most, areas of the country.  Whereas the Kaiser report said that Medicare Advantage plans are less costly in about half the country, former Congressional Budget Office Director Alice Rivlin found an even higher number.  Rivlin testified before the Ways and Means Committee in April that “88 percent of Medicare beneficiaries live in areas in which a bidding process [for premium support] would produce a second-lowest bid below the current cost of FFS [traditional] Medicare.”  And a recent article in the Journal of the American Medical Association found that private plans would be 9% cheaper than traditional Medicare under a premium support proposal.  So there is much evidence to suggest that Medicare Advantage plans can provide health care for seniors at lower costs – which would help make Medicare more sustainable over the long term.

Of course, the Left wants nothing to do with such facts, preferring instead to cling to the shibboleth of government-run Medicare as a first step towards socialized medicine for all.  As we noted yesterday, the Kaiser report obscures the reasons for its findings – it trumpets the talking point of higher costs for seniors under premium support, but fails to highlight the fact that in many cases, those higher costs are because government-run Medicare is less efficient than private plans.  Likewise, the Commonwealth Fund, in releasing a study on Medicare Advantage today, claimed that “the Medicare Advantage program must work just as well as traditional Medicare” and that Obamacare “will make that possible.”

The facts suggest that the Medicare Advantage program can actually work better than traditional Medicare – and at lower costs.  The only problem is that the Commonwealth Fund, the Obama Administration, and the “professional left” don’t want to make that possible.  And so the same crowd that complained so loudly about “wasteful overpayments” to private Medicare Advantage plans now wants to keep making wasteful overpayments to government-run Medicare – merely to satisfy their government-centric ideology.

Biden’s Medicare Malarkey

Who [do] you believe, the AMA, me, a guy who’s fought his whole life for this, or somebody who would actually put in motion a plan that knowingly cut – added $6,400 a year more to the cost of Medicare?”

The Council recommends that the AMA support transitioning Medicare to a defined contribution program that would enable beneficiaries to purchase coverage of their choice through a Medicare exchange of competing health insurance plans….

“Moving Medicare to a defined contribution program would expand patient choice…A defined contribution system would allow private insurers the freedom to design a range of plans that meet patient demand….

“A defined contribution system is likely to result in lower rates of health care spending growth, since insurers would be competing on price as well as benefit design, and would be directly accountable to patient demand for high-value, high-quality services….

“The Council firmly believes that implementing a defined contribution system, with strong regulatory protections for patients, is a responsible and feasible approach to strengthening the Medicare program.”

  • Report of the American Medical Association’s Council on Medical Service, issued last Friday

Paul Krugman’s Typical Trifecta

Writing in the New York Times this morning, Paul Krugman’s column hits the usual Krugman-esque notes.  The column, entitled “The Medicare Killers,” is liberal.  As you can tell from its title, the column is hyperbolically over-the-top.  And it’s also flat-out WRONG.  The most obviously false statement is his unequivocal declaration that not a shred of evidence exists that private plans can deliver Medicare benefits more efficiently than the federal government:

Wouldn’t private insurers reduce costs through the magic of the marketplace?  No.  All, and I mean all, the evidence says that public systems like Medicare and Medicaid, which have less bureaucracy than private insurers (if you can’t believe this, you’ve never had to deal with an insurance company) and greater bargaining power, are better than the private sector at controlling costs.

As Bill Clinton might say, the accuracy of that statement depends solely upon what the meaning of the word “all” is.  Because a new study published in the Journal of the American Medical Association just this month found that private plans would “bid an average of 9% below traditional Medicare costs” under a premium support model.  Which might explain why other liberals at the Center for American Progress are now – disingenuously – advancing the exact opposite of Krugman’s argument: that seniors would have to pay more to stay in government-run Medicare.

So either Paul Krugman doesn’t know his facts, or he doesn’t want to know his facts – because he would rather keep making claims about government-run Medicare’s “efficiency” that he knows to be wrong.  Either way, it’s a sad statement that Krugman and his allies would have to stoop so low to defend the indefensible – and unsustainable – status quo.

Does David Cutler Believe in ANYTHING?

Last Friday the liberal Center for American Progress released a paper co-authored by Harvard professor David Cutler that amounted to a partisan – and thoroughly un-principled – attack on conservative entitlement reform proposals.  When it comes to premium support proposals in Medicare, the CAP paper alleged that traditional, government-run Medicare would be cheaper for senior citizens than a choice of private plans:

Seniors will face higher costs not only because of this cost shift from the government but also because the Romney-Ryan plan increases system-wide costs by promoting private insurance that will be more costly than the existing Medicare system.  The Romney-Ryan plan would cost more than the current Medicare system because, as the Congressional Budget Office has documented, private insurance companies have higher profits and administrative costs than Medicare does, and because the plan would reduce the market share, and therefore the purchasing power, of traditional Medicare….Ample evidence exists that premium support would not foster the type of competition that reduces prices.

There then followed a whole series of calculations showing how much more seniors would be forced to pay because the paper alleges the Romney-Ryan plan will drive them into private, less-efficient health plans.  This position would be slightly less disingenuous had not both CAP and Cutler himself, in a paper Cutler co-authored earlier this month, taken the exact opposite position and put out similarly detailed projections about how much more seniors would pay – not because private plans would be less efficient than government-run Medicare, but because they would be more efficient:

An estimate of what such a bidding system may mean for Medicare beneficiaries, using 2006-2009 data on MA plan bids and traditional Medicare costs, is shown in the TABLE.  Nationally, in 2009, the benchmark plan under the Ryan-Wyden framework (i.e., the second-lowest plan) bid an average of 9% below traditional Medicare costs (traditional Medicare was equivalent to approximately the tenth-lowest bid).  Since traditional Medicare is simply another plan option under the Ryan-Wyden plan, a beneficiary in 2009 would have paid an average of $64 per month (9% of $717) in additional premiums to stay in traditional Medicare….beneficiaries must pay more for traditional Medicare or join a private plan.

The rest of the CAP paper really needs no rebuttal – its author’s lack of principles discredits it enough on its own.  And as we have pointed out before, the Center for American Progress has done a thorough job disgracing itself by taking wholly illogical and inconsistent positions for no apparent reason other than political gain.

But one fundamental question is why Harvard University allows faculty members like David Cutler to use their institutional affiliation to put out such mutually contradictory and disingenuous work.  Universities claim to be bastions of academic freedom.  But changing one’s position in a matter of weeks, and putting out detailed estimates on both sides of an economic argument, may strike many as a perversion of academic freedom – engaging in either rank political opportunism, selling one’s “academic” conclusions to the highest bidder, or some combination thereof.  In short, academic freedom does not mean the freedom not to have principles – a lesson that Cutler and Harvard apparently need to re-learn.

President Obama’s Twofold Dishonesty on Cutting Medicare Benefits

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.

Pharmacies Join Obamacare Propaganda Campaign

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.

Fact Checking David Axelrod on…Everything

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.

Center for American Progress: Hypocrites You CAN’T Believe In

Two events in as many days show that the liberals at the Center for American Progress will say anything – anything – to throw up roadblocks for comprehensive Medicare reform.  Earlier this afternoon, CAP released a blog post touting a study claiming that premium support proposals would raise Medicare premiums for seniors:

Critics charged that in areas where private plans make bids that are lower than the cost of traditional Medicare, seniors would see increase costs and now, a new study finds that had the plan been implemented in 2009, 24 million beneficiares [sic] enrolled in the program would have paid higher premiums.

It’s particularly ironic that CAP talked about “private plans mak[ing] bids that are lower than the cost of traditional Medicare” – because just yesterday, CAP released a paper claiming that “increasing the privatization of Medicare does not make sense because traditional Medicare costs less than comparable private coverage.”   Which is it?  Does “traditional Medicare cost less than comparable private coverage” – as CAP alleged yesterday – or do private plans have costs “lower than the cost of traditional Medicare” – as CAP alleges today?

The fact remains that those who spent years complaining about Medicare Advantage “overpayments” have now acknowledged that private plans CAN provide policies “lower than the cost of traditional Medicare.”  One might think that this admission – a devastating blow to those who think government and not competition is the only way to lower health costs – would prompt a re-assessment by the left when it comes to their obstruction of true Medicare reform.  But that presumes that organizations like CAP value things like intellectual integrity or consistency.

The Queen of Hearts famously said that she trained herself to believe six impossible things before breakfast.  Given their performance over the last two days, it appears that the “scholars” at CAP have only five more impossible things to go.