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  • Brace for Larger Deficits as Lawmakers Rethink Health Care Law's Medicare Cuts

    Obamacare will cost Americans trillions of dollars in the decades to come. To help pay for its new coverage provisions, the plan makes sweeping cuts to Medicare. But as it turns out, serious doubts exist about the likelihood of these cuts actually occurring, and evidence has already shown that lawmakers may shy away from some of the cuts. If the planned savings don’t materialize, the health care overhaul will add even more to deficit spending than already expected, further jeopardizing the nation’s fiscal future.

    Both the director of the Congressional Budget Office (CBO) and the Medicare Chief Actuary warn that Medicare cuts made by Obamacare will be difficult to sustain in the long term. In January, CBO Director Douglas Elmendorf wrote:

    “Current law now includes a number of policies that might be difficult to sustain over a long period of time. … If those provisions would have subsequently been modified or implemented incompletely, then the budgetary effects of repealing [the law] and the relevant provisions of the Reconciliation Act could be quite different—but CBO cannot forecast future changes in law or assume such changes in its estimates.”

    Soon after Obamacare was passed into law, Medicare Chief Actuary Richard Foster wrote that seniors’ access to care would be threatened as a result of reductions in payment updates included in the new law. Foster wrote, “[P]roviders for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the program.”

    Now, lawmakers have already begun to squirm under the political pressure to prevent the planned cuts to seniors’ care. In a recent article, The Hill highlighted the fact that Senators on both sides of the aisle promised to fight proposed cuts to the home health care industry under the new law. According to Senator Susan Collins (R-ME), “Deep cuts in access to home healthcare takes us in completely the wrong direction at a time when we’re trying to control costs.” Collins, along with Senator Maria Cantwell (D-WA), plans to introduce legislation that would require the Secretary of Health and Human Services to justify her reasons for cutting payments to home health care.

    Obamacare’s cuts to home health care agencies are projected to generate $39.7 billion in savings over the next decade. Since “savings” in the new law are dedicated to covering the expense of new coverage provisions—not to addressing Medicare’s $30.8 trillion in unfunded obligations—if they don’t materialize, more of the cost of Obamacare will be added to the federal deficit.

    Medicare spending must be restrained to ensure its long-term viability, so any savings found should be used to extend the solvency of the program itself. Instead, Obamacare relies on savings from Medicare to offset an expansion of Medicaid and hefty new subsidies for low- and middle-income Americans. Repealing or delaying the cuts used to pay for the unpopular new law will only speed up the process by which Obamacare will add to federal deficit spending.

    This post was co-authored by Amanda Rae Kronquist.

    Posted in Obamacare [slideshow_deploy]

    21 Responses to Brace for Larger Deficits as Lawmakers Rethink Health Care Law's Medicare Cuts

    1. George Colgrove VA says:

      There seems to be no end in site to federal spending. Of course until we hit the wall!

    2. james moylan says:

      I can not understand the view of conservatives on health care. I do not believe that a health care system run by the government is nessessarly a good idea but their never seems to be a real solution to the problem of the rising cost of health care..yes it is true that the united states has the best health care in the world but our per capita spending on health care is twice as much as other developed countries and if you take life span into consideration it is not any greater in the united states then in other developed countries even if you adjust for race and ethnicity theirs even countries that have per capita income thats one tenth or one fifth that of the united states that have longer life spans than the people of the united states. also many of the very best treatments are only available to those who have a great insurance plan or the wealthy.

    3. George Colgrove VA says:

      James,

      A highly competative health industry will go much further in reducing the cost of healthcare while at the same time excell the developments in the field that would further reduce costs.

      Also making people go to mainstreet for their healthcare insurance rather than have employers provide this as a benefit, would further drive heathcare insurance down.

      Public healthcare should be providing basics to the absolute poor and no more. Kind of like what has always happened in hospitals all along.

      We do not need government involved.

    4. Kevin H, college par says:

      Do folks still listen to Richard Foster after the events during the 2003 Medicare Part D?

    5. Norma in Nebraska says:

      So, James, do you honestly believe in this day and age that the GOVERNMENT is actually capable of cutting the cost of anything? The only people who are "doing more for less" are in the private sector, and they are doing it out of absolute necessity if they want to continue to keep their doors open!

      One of the MAJOR reasons YOUR health care costs keep going up is because OUR government REFUSES to close our borders. Therefore we have hundreds of thousands of illegals in this country who are taking full advantage of the fact that they can go to any hospital or medical facility and get the care they need WITHOUT proving they are a citizen or that they have the ability to pay. Do you think that the money to operate these facilities grows on trees or that they should just take care of the non-payers for free?? The government has demonized the medical providers as being the problem BECAUSE it doesn't want to face the real problem: he who gets service should pay his own bill . . . . . PERIOD!!!

      You are saying that you don't "understand the view of conservatives on health care." Well, as a conservative, I think that everyone should be responsible for their own care UNLESS they are too old, too young or too disabled to WORK which certainly is a foreign concept to a significant number in this country!!!! That being said, I guess I must be a lot more realistic than you are because I recognize that this is an AMERICAN problem . . . not conservative or liberal!!! Please wake up and smell the coffee . . . . the more "free stuff" you give to others, the more you are going to be expected to foot the bill. HELLO . . . . are you "in there?"

    6. Bobbie says:

      Government's involvement means more unnecessary costs to pay for their involvement added to what the government promised to reduce the costs to which never happened.

      Government involvement is one more means to corrupt. Government is inefficient and wasteful with their "make work." When one person can do the job it's divided into more then one with everyone getting equal pay as the one was. Government doesn't belong in the personal individual health of people, as whatever government says goes (force.)

      Having government involved is just a greater hardship at enormous needless costs to those that are forced to go through this BS (everybody minus 30million! who could be walking on their own by now! IF government expected them to.)

      This is everything America doesn't stand for no matter how good it sounds, it's a trap! As compassionate as the government looks to be, as long as personal health is in their control, they can just as easily have you sickened or killed because government doesn't hold themselves accountable. i appreciate a real doctor, not one influenced by government… we don't appreciate this convoluted piece of trash that's more trouble then it's worth and highly unconstitutional.

    7. Pat Regan, Louisiana says:

      What a surprise!! Obama 's health care will cost us more than predicted!. A blind and deaf person knew that. Is it any wonder that a phony president who lies every time his mouth moves, assisted by the most uninformed and obnoxious Speaker and the whiniest Senate President in history rammed this unconscionable lie through the Congress. I hope this legislation is blown clean to hell.

    8. Pingback: Morning Bell: Read Before You Vote | The Foundry: Conservative Policy News.

    9. Daver (Ft Worth) says:

      Norma–right on! You clearly get it!

      Other gov't factors driving up costs are Tort reform, privacy, and the ridiculous pharma laws that necessitate 15 years of testing under 20 years of patent protection–before generics "steal" the market. But I digress!

      Medicare solvency is already becoming a myth. Fewer and fewer docs can afford to take patients. The reimbursements are low and take forever. The paperwork is mountainous and the gov't wants to tell practices how to practice. If all a senior has is medicare–they better live in a city cause rural docs are becoming few and far between!

    10. Mark, West Texas says:

      My own doctor told me a while ago that when Texas passed a very modest tort reform law, his own liability insurance costs dropped by a third. This wouldn't be the answer to all health care cost problems, but it would definitely help.

    11. LaVerne Bradshaw, Or says:

      Obamacare is the worst thing that can happen to American Healthcare! We must get rid of Obama as quickly as possible. He has no clue about finances–and does not care what happens when he's out of office because he has all the money he will ever need! He spends more time traveling (always with his wife) then doing the job of President (probably because he is clueless of what the President's job really is all about).

    12. James in Alabama says:

      Just a reminder……

      Medicare cost $3 billion in 1966. That was it, total.The House Ways and Means Committee at the time estimated that it would cost only $12 billion in 1990, a projection that took the committee's best guess about inflation into account.

      Medicare wound up costing $107 billion in 1990, which was 890 percent more than predicted a short generation earlier.

      Medicare cost in 2009 – $509 billion.

      And we should trust the government to run our health care system!!!!

    13. James in Alabama says:

      just a reminder……

      Medicare cost $3 billion in 1966. That was it, total. The House Ways and Means Committee at the time estimated that it would cost only $12 billion in 1990, a projection that took the committee's best guess about inflation into account.

      Inflation proved steeper than most anyone likely feared at the time. But still, Medicare wound up costing $107 billion in 1990, which was 890 percent more than predicted a sort generation earlier.

      Medicare cost in 2009 – $509 billion.

      And we should trust the government to run our health care system!!!!!!!

    14. Wes in cincy says:

      This country will never get a handle on healthcare costs until the mindset of the public realizes that the road to better health is called "prevention".

      Americans gorge themselves with donuts, pizza and triple burgers and when

      cholesterol and diabetes knocks on their door they just live on prescription drugs the rest of their lives. We have a very unhealthy diet and people will spend

      $30,000 on a car, but won't spend $10. on a bottle of vitamins. Our food is so full of artificial junk and chemicals that there is no way it can promote good health.

      Garbage in, garbage out. Preventing health problems is a whole lot cheaper.

      But good luck getting the public to swallow that.

    15. George Colgrove VA says:

      Mark:"My own doctor told me a while ago that when Texas passed a very modest tort reform law, his own liability insurance costs dropped by a third. This wouldn’t be the answer to all health care cost problems, but it would definitely help."

      I needed to be repeated.

    16. Mike, Wichita Falls says:

      "Collins, along with Senator Maria Cantwell (D-WA), plans to introduce legislation that would require the Secretary of Health and Human Services to justify her reasons for cutting payments to home health care."

      I know Collins voted against Obamacare and Cantwell voted for it, but are we to believe that they are completely clueless as to why HHS is cutting payments? It was in the bill, ladies, which we were told had to passed before we discovered its contents. As much as they may not want HHS to cut payments, they are obligated by law to do so. Should this be a wake up call to these and all lawmakers to give less latitude to HHS and the executive in general? Legion is the inclusion in Obamacare of the phrase "as the Secretary of HHS shall deem necessary." That's a lot of power.

      I've got an idea. If you don't want HHS to cut payments to Medicare, introduce legislation repealing Obamacare!

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    18. Steven, Louisiana says:

      Government created an unsustainable beast in this healthcare reform bill. Obama relied on the American people to hate the people that practice medicine, because they make too much money. We didn't take the bait like a majority of the third world peasants do when the government plays class warfare. But, who is this man who made shady land deals to tell private citizens how much they can make? Doctors are supposed to see more patients and receive a 20% salary reduction for their hospitality? Who in their right mind would think this is realistic? I would fight this monstrosity tooth and nail if I were a physician. Insurance companies should be able to compete across state lines, opening the market for capitalistic enterprise to take effect. Also, government nonsense costs fifty cents of every medical dollar, due to red tape and bureaucratic operational cost. Take the government out of healthcare and we save fifty percent. Also, embrace tort reform, which will alleviate physician stress and medical errors.

    19. RT, California says:

      Why is there not more discussion about reforming TANF (the nation’s welfare system). TANF is not only wasteful, it allows states such as California to trap people on public assistance by not having expectations that they will find work.

      TANF needs to be thrown out and true welfare reform needs to replace it.

    20. Good health is a clear sign of progress and prosperity

    21. zygote 1331 says:

      Of course you would never, could never admit hat the failed policies of Reagan and Bush and all of your cronies has anything to do with a failed economy where people have no choice but to seek government assistance.

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