The President on Medicare

The President talked about the Medicare program and the new report showing that the changes enacted through health care reform will add twelve years to the program’s solvency. The President of course is referring to the Medicare “cost cuts” enacted to finance a portion of the new health care reform legislation. Unfortunately I think that the case can be made here that the President is fudging the Medicare numbers. The “savings” include reductions in payments to doctors that most certainly will be overridden by Congress. They also include other assumptions that are not likely to be realized for obvious reasons. From the New York Times:

The new law squeezes nearly a half-trillion dollars from Medicare spending in the next 10 years. The savings are based on an assumption that hospitals, nursing homes and other health care providers will become more efficient, increasing their productivity to match productivity gains in the overall economy.

If that does not happen, the trustees said, Medicare will pay many hospitals and doctors less than the cost of the goods and services they purchase, and providers may “eventually become unwilling or unable to treat Medicare beneficiaries.”

The report also assumes that Medicare will cut payment rates for doctors’ services by 23 percent on Dec. 1 and by a further 6.5 percent on Jan. 1, as required under existing law.

This assumption is unrealistic, the report said, because “Congress is virtually certain to override” the scheduled cuts, as it has done in recent years.

I do not know what the impact on the twelve year number is once you remove the reductions in the doctor’s pay from the calculation, but the program troubles are far from over. And the Administration and Congress need to stop playing these silly games over this program and Social Security. Both Parties continue to play musical chairs with Medicare and Social Security, and it appears to me that the goal is not to solve the issues involved but to make sure that the other Party is blamed for the programs financial problems. This is a truly difficult problem, and the eventual real fix will likely cost the responsible Party heavily at the polls. The battle lines are now being drawn over the impending report of the “Deficit Commission”, with the left girding to “protect Social Security”. Can a democratic system built on compromise and fudging to protect political interests deliver solutions to truly difficult questions without a calamity occurring? A fair question in light of some of the doublespeak coming out of Washington these days.

Read the New York Times story here.

HHS Press release on Medicare solvency.

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2 Responses to The President on Medicare

  1. Jules Gordon says:

    Your Honor,

    You do know we are in debt to the tune of $104 trillion dollars, including Medicare and Social Security.

    Can your “friends” solve this problem? Please don’t tell me that George Bush did not do anything except add to it. I know. But, with the Democratic Party is in charge of fixing it they must have an active plan. What is it?



  2. Bill Manzi says:


    The Dems have proposed no fixes to either. The President, in this posting, uses numbers to brag about extending the life of Medicare by 12 years that I believe will prove to be false. I am critical of those numbers. I think both parties continue to dodge the necessary solutions, because the solutions will be deeply unpopular. But the President asked Congress to join him in the formulation of a deficit commission, which had many Republican co-sponsors, including John McCain. Yet when that Commission came up for a vote those same Republicans voted NO, because they do not want to be a part of any solution that includes tax increases, even if coupled with deep spending cuts. The President formed a Deficit Commission by executive order, and that Commission will report out in November. Lets see who the adults in the room are then, when fixes to Social Security and Medicare and Medicaid are broached. Do you think Republicans will sign on to tough measures? I have my doubts about the Dems, but at least the President was willing to put a commission together.



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