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  • Promised Health Care Savings: Don't Bet On Medicare Cuts

    Forget the President’s rhetoric about bending the health care cost curve.

    The House of Representatives will soon vote on legislation (H.R. 3961) that effectively repeals the cost control mechanism included in the Medicare physician payment update formula back in 1997.

    Passage of H.R. 3961 would add another $210 billion to the Federal government’s ballooning deficit — and even more importantly — it would demonstrate that Congress is not serious about actually enforcing any new Medicare spending cuts included in its pending health care bills.

    The result could be another half-a-trillion dollars — or more — added to the federal deficit over the next ten years if Congress passes new health care legislation. The experience with Medicare physician payment “reform” perfectly illustrates why the spending cuts that finance much of the new health legislation are likely to never happen.

    In 1997 Congress included in the formula for calculating Medicare physician payments a provision — called the “sustainable growth rate” (SGR) — designed to limit the growth of spending on physician services in Medicare. The SGR was designed to work as follows:

    Medicare set the per-service fees it would pay doctors. However, if doctors provided more services to Medicare patients — thereby increasing Medicare spending above Congressionally set targets — the per-service fees paid by Medicare would be cut to keep total Medicare physicians spending in line. Furthermore, by embedding this arrangement in the physician payment formula, Congress made the future cuts automatic so as to insulate itself from political pressure to keep increasing entitlement spending.

    The only problem was that it didn’t work.

    As soon as the “automatic” cuts threatened to actually take effect Congress faced political pressure to rescind them. The result is that year after year Congress has enacted single-year “doc fixes” to prevent the cuts occurring.

    Thanks to compounding spending growth, over time the gap between the original spending targets and actual spending grew wider and wider. The difference this year now stands at 21 percent — meaning that if Congress now allowed the SGR provision to take effect Medicare’s physician payment rates would be automatically slashed by 21 percent. Of course, this ever-growing gap between theory and reality has translated into ever-growing political pressure on Congress to abandon the theory of restraining spending and instead surrender to the reality of unchecked Medicare growth.

    Enacting H.R. 3961 would mean that Congress has thrown in the towel on its previous attempt to control Medicare spending. It will also mean that no rational person can believe that Congress will actually enforce any new Medicare spending cuts included in pending health care legislation. That, in turn, would mean that new health care legislation would actually result in further, massive increases in either Federal borrowing or taxes.

    Case in point. The Congressional Budget Office estimates that the health care legislation passed last Saturday in the House would result, over ten years, in $1.3 trillion in new spending, plus $29 billion in tax cuts (mostly new tax credits to small business that offer coverage), offset by $767 billion in new taxes and fees, and $693 billion in spending cuts, mainly in Medicare.

    But if Congress won’t enforce its previous Medicare cuts, how realistic is it that they will actually enforce these new Medicare cuts?

    Posted in Obamacare [slideshow_deploy]

    3 Responses to Promised Health Care Savings: Don't Bet On Medicare Cuts

    1. Ken Nietenhoefer, Bo says:

      Is there a movement afoot to sue (all the way to the Supreme Court) if the health bill boondoggle passes? Who will initiate? Ken

    2. Pingback: Taxing and Saving? – Blog Watch

    3. Dale Cord Redondo Be says:

      THE LETTER EVERYONE IS TALKING ABOUT

      This has to be the email forward of the year! Please take a few minutes to read and absorb just what this woman had to say, and then hopefully everyone will pass it to their entire mailing list, and theirs to theirs until it circles the nation! Time is short and arrogance, stupidity and ignorance abound…

      The following letter read on Glenn Beck 's show, is rapidly circulating around the country. Americans everywhere identify with this 53-year-old woman.. She has given us a voice. Once you read this, you will want to forward it to all of your friends…

      GLENN BECK: I got a letter from a woman in Arizona . She writes an open letter to our nation's leadership:

      "I am a home grown American citizen, 53, registered Democrat all my life. Before the last presidential election I registered as a Republican because I no longer felt the Democratic Party represents my views or works to pursue issues important to me. Now I no longer feel the Republican Party represents my views or works to pursue issues important to me. The fact is I no longer feel any political party or representative in Washington represents my views or works to pursue the issues important to me. Instead, we are burdened with Congressional Dukes and Duchesses who think they know better than the citizens they are supposed to represent.

      There must be someone. Please tell me who you are Please stand up and tell me that you are there and that you're willing to fight for our Constitution as it was written. Please stand up now.

      You might ask yourself what my views and issues are that I would feel so horribly disenfranchised by both major political parties. What kind of nut-job am I? Well, these briefly are the views and issues for which I seek representation:

      One, illegal immigration. I want you to stop coddling illegal immigrants and secure our borders. Close the underground tunnels.. Stop the violence and the trafficking in drugs and people. No amnesty, not again. Been there, done that, no resolution.

      P.S., I'm not a racist. This is not to be confused with legal immigration.

      Two, the STIMULUS bill. I want it repealed and I want no further funding supplied to it.. We told you No, but you did it anyway. I want the remaining unfunded 95% repealed. Freeze, repeal.

      Three: Czars. I want the circumvention of our constitutional checks and balances stopped immediately. Fire the czars. No more czars. Government officials answer to the process, not to the president. Stop trampling on our Constitution, and honor it.

      Four, cap and trade. The debate on global warming is not over. There are many conflicting opinions and it is too soon for this radical legislation. Quit throwing our nation into politically-correct quicksand..

      Five, universal healthcare. I will not be rushed into another expensive decision that will burden me, my children, and grandchildren. Don't you dare try to pass this in the middle of the night without even reading it. Slow down! Fix only what is broken — we have the best health care system in the world — and test any new program in one or two states first.

      Six, growing government control. I want states rights and sovereignty fully restored. I want less government in my life, not more. More is not better! Shrink it down. Mind your own business. You have enough to take care of with your real [Constitutional] obligations Why don't you start there.

      Seven, ACORN. I do not want ACORN and its affiliates in charge of our 2010 census. I want them investigated. I also do not want mandatory escrow fees contributed to them every time on every real estate deal that closes — how did they pull that one off? Stop the funding to ACORN and its affiliates pending impartial audits and investigations. I do not trust them with taking the census with our taxpayer money. I don't trust them with any of our taxpayer money. Face up to the allegations against them and get it resolved before taxpayers get any more involved with them. If it walks like a duck and talks like a duck, hello. Stop protecting your political buddies. You work for us, the people. Investigate.

      Eight, redistribution of wealth. No, no, no. I work for my money. It is mine. I have always worked for people with more money than I have because they gave me jobs — and that is the only redistribution of wealth that I will support. I never got a job from a poor person! Why do you want me to hate my employers? And what do you have against shareholders making a profit?

      Nine, charitable contributions. Although I never got a job from a poor person, I have helped many in need. Charity belongs in our local communities, where we know our needs best and can use our local talent and our local resources. Butt out, please. We want to do it ourselves..

      Ten, corporate bailouts. Knock it off. Every company must sink or swim like the rest of us. If there are hard times ahead, we'll be better off just getting into it and letting the strong survive. Quick and painful. (Have you ever ripped off a Band-Aid?) We will pull together. Great things happen in America under great hardship. Give us the chance to innovate. We cannot disappoint you more than you have disappointed us.

      Eleven, transparency and accountability. How about it? No, really, how about it? Let's have it. Let's say we give the buzzwords a rest and have some straight honest talk… Please stop trying to manipulate and appease me with clever wording… I am not the idiot you obviously take me for.. Stop sneaking around and meeting in back rooms making deals with your friends. It will only be a prelude to your criminal investigation. Stop hiding things from me..

      Twelve, unprecedented quick spending. Stop it now.

      Take a breath. Listen to the people. Slow down and get some input from nonpoliticians and experts on the subject. Stop making everything an emergency. Stop speed-reading our bills into law. I am not an activist.. I am not a community organizer. Nor am I a terrorist, a militant or a violent person. I am a parent and a grandparent.. I work. I'm busy. I am busy, and I am tired. I thought we elected competent people to take care of the business of government so that we could work, raise our families, pay our bills, have a little recreation, complain about taxes, endure our hardships, pursue our personal goals, cut our lawn, wash our cars on the weekends and be responsible contributing members of society and teach our children to be the same all while living in the home of the free and land of the brave.

      I entrusted you with upholding the Constitution. I believed in the checks and balances to keep from getting far off course. What happened? You are very far off course. Do you really think I find humor in the hiring of a speed reader to unintelligently ramble all through a bill that you signed into law without knowing what it contained? I do not.

      It is a mockery of the responsibility I have entrusted to you. It is a slap in the face. I am not laughing at your arrogance. Why is it that I feel as if you would not trust me to make a single decision about my own life and how I would live it but you should expect that I should trust you with the debt that you have laid on all of us and our children. We did not want the TARP bill… We said no. We would repeal it if we could. I am sure that we still cannot. There is needless urgency and recklessness in all of your recent spending of our tax dollars.

      From my perspective, it seems that all of you have gone insane. I also know that I am far from alone in these feelings. Do you honestly feel that your current pursuits have merit to patriotic Americans? We want it to stop. We want to put the brakes on everything that is being rushed by us and forced upon us. We want our voice back. You have forced us to put our lives on hold to straighten out the mess that you are making. We will have to give up our vacations, our time spent with our children, any relaxation time we may have had and money we cannot afford to spend on bringing our concerns to Washington . Our president often knows all the right buzzwords like unsustainable. Well, no kidding. How many tens of thousands of dollars did the focus group cost to come up with that word? We don't want your overpriced words. Stop treating us like we're morons.

      We want all of you to stop focusing on your reelection and do the job we want done, not the job you want done or the job your party wants done. You work for us and at this rate I guarantee you not for long because we are coming. We will be heard and we will be represented.. You think we're so busy with our lives that we will never come for you? We are the formerly silent majority, all of us who quietly work, pay taxes, obey the law, vote, save money, keep our noses to the grindstone… and we are now looking at you.

      You have awakened us, the patriotic freedom spirit so strong and so powerful that it had been sleeping too long. You have pushed us too far. Our numbers are great. They may surprise you. For every one of us who will be there, there will be hundreds more that could not come. Unlike you, we have their trust. We will represent them honestly, rest assured. They will be at the polls on voting day to usher you out of office.

      We have cancelled vacations. We will use our last few dollars saved. We will find the representation among us and a grassroots campaign will flourish. We didn't ask for this fight. But the gloves are coming off. We do not come in violence, but we are angry. You will represent us or you will be replaced with someone who will. There are candidates among us who will rise like a Phoenix from the ashes that you have made of our constitution.

      Democrat, Republican, independent, libertarian. Understand this.. We don't care. Political parties are meaningless to us Patriotic Americans are willing to do right by us and our Constitution, and that is all that matters to us now.. We are going to fire all of you who abuse power and seek more. It is not your power. It is ours and we want it back. We entrusted you with it and you abused it. You are dishonorable. You are dishonest.. As Americans we are ashamed of you. You have brought shame to us. If you are not representing the wants and needs of your constituency loudly and consistently, in spite of the objections of your party, you will be fired. Did you hear? We no longer care about your political parties. You need to be loyal to us, not to them.. Because we will get you fired and they will not save you.

      If you do or can represent me, my issues, my views, please stand up. Make your identity known. You need to make some noise about it. Speak up. I need to know who you are. If you do not speak up, you will be herded out with the rest of the sheep and we will replace the whole damn congress if need be one by one.

      We are coming. Are we coming for you? Who do you represent? What do you represent?

      Listen. Because we are coming. We the people are coming.

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