Fwd: Man with an Ax

[Guest guest]

Asclepios

Your Weekly Medicare Consumer Advocacy Update

Man with an Ax

January 31, 2008 • Volume 8, Issue 5

Next week, President Bush will likely propose a budget that takes a

meat-ax to Medicare, slashing close to $100 billion from payments to

hospitals, nursing homes, home health care and other providers that care

for older adults and people with disabilities.

The good news is that Congress will reject these proposals out of hand.

President Bush and his advisers know this, of course, which is why they

feel safe in proposing them. Such drastic across-the-board cuts, if

passed into law, would likely end the careers of the lawmakers who voted

for them.

Medicare not only provides guaranteed, affordable health care to 44

million older adults and people with disabilities, it is crucial to the

financial viability of hospitals and other health care providers. There

is no evidence that providers could absorb such sharp payment cuts, which

run counter to the recommendations of the Medicare Payment Advisory

Commission (MedPAC), a nonpartisan expert panel.

Even if the president’s budget is a bit of a show designed to make him

look like a tough guy on the burgeoning budget deficit, there is real

danger in these dead-end proposals.

The president’s budget sends the false message that we can no longer

afford to provide decent health coverage to people with Medicare and that

desperate measures are needed. That message of panic makes it difficult

to focus clearly on the areas where Medicare does spend too much.

The best place to look for potential Medicare savings are the MedPAC

recommendations. MedPAC estimates that taxpayers pay on average 13

percent more to provide coverage through a Medicare private health plan

than they do under Original Medicare.

Eliminating those excess payments, as MedPAC recommends, would save $54

billion over the next four years, according to the Congressional Budget

Office. It would also cut into the record profits of insurance companies,

however, and for that reason, there are not even modest payment

reductions to Medicare private health plans in the president’s budget.

It’s hard to give a haircut with a meat cleaver.

Medical Record

“The budget would not touch payments to insurance companies for

private Medicare Advantage plans, even though many Democrats and

independent experts say those plans are overpaid. In the next five years,

the largest amount of Medicare savings, by far, would come from

hospitals: $15 billion from an across-the-board reduction in the annual

updates for inpatient care; $25 billion from special payments to

hospitals serving large numbers of poor people; and $20 billion from

capital payments for the construction of hospital buildings and the

purchase of equipmentâ€

(“

Bush Seeks Surplus via Medicare Cuts,†The New York Times,

Pear, January 31, 2008).

“Straightforward changes to the Medicare and Medicaid programs—such

as more stringent eligibility criteria,, greater cost sharing, or changes

in provider payments—could reeduce federal spending in part by shifting

costs from the federal government to households. Ultimately, however,

such cost-shifting approaches are unlikely to be sustainable, and

controlling federal spending on health care while maintaining broad

access to care under these programs will therefore almost certainly need

to be associated with slower cost growth in the health care sector as a

wholeâ€

(

CBO Testimony: Growth in Health Care Costs, Congressional

Budget Office, Orszag, January 31, 2008).

“The Commission believes that payment policy in the MA program

should be built on a foundation of financial neutrality between payments

in the traditional FFS program and payments to private plans.... The

excess payments to private plans allow them to be less efficient than

they would otherwise have to be, because inefficient plans can use the

excess payments—rather than savings ffrom efficiencies—to finance extra

benefits that in turn attractt enrollees to such plansâ€

(

The Medicare Advantage Program and MedPAC Recommendations,

Medicare Payment Advisory Commission, Mark E. , June 28,

2007).

* * * *

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* * * *

Medicare Private Health Plan Monitoring Project

The Medicare Rights Center (MRC) would like to hear about your

experience, or that of someone you know, enrolled in a private health

plan. With information about what the issues are with Medicare Advantage

plans, we will be able to demand that those problems be fixed.

Submit your story at

www.medicarerights.org/maplanstories.html.

* * * *

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