I read an interesting story by John C. Goodman this morning on the Town Hall website. In his piece “Is Obama Cooking the Medicare Books?,” Goodman reports that President Obama is cooking the books by claiming a $200 million savings by lowering “excessive payments” to Medicare Advantage plan providers and to doctors, hospitals and other providers due to their “improved efficiencies.”
Finally, the administration expects efficiencies gained from “demonstration projects.” These include experiments in paying more for better performance, paying package prices and encouraging a new type of HMO, called Accountable Care Organizations.
Goodman points out some interesting omissions by the Obama administration:
- The Congressional Budget Office has studied the demonstration projects on three separate occasions (here, here and here) and each time has concluded that they are producing no serious savings and are unlikely to do so in the future.
- Medicare’s Actuary has determined that reductions in payments to Medicare Advantage plans will not only result in lower benefits for the one in four seniors who are in these plans, but that about 7 ½ million enrollees will actually lose their coverage and have to seek more expensive Medigap insurance elsewhere.
- Medicare’s Office of the Actuary also has concluded that the projected savings are unrealistic and will not materialize — since they will result in hospital closings and seniors’ inability to find accessible health care — a judgment reaffirmed in the Chief Actuary’s own statement in the latest Trustees report.
- Even if the $200 billion in savings did materialize, it would not be a saving to taxpayers; instead, these savings have already been pledged to create a new health insurance entitlement for young people — leaving taxpayers just as burdened as they were before.
You can read all eight omissions in the original article.