Football and Medicare

Medicare is critically important, so a national discussion on the topic could be helpful. But that is not the same as making Medicare a political football.

Rather than listening merely to the heated rhetoric being exchanged between the Republicans and Democrats on Medicare, it is helpful to hear what some nonpartisan groups have to say.

Kaiser Health News, for example, an independent editorial arm of Kaiser Family Foundation, has lots of online articles about Medicare, the Affordable Care Act, including “FAQ: Decoding the $716 billion in Medicare Reductions,” which I refer to below, and articles about the Ryan Budget. I even found “How Paul Ryan Proposes to Change Medicare.” Best of all, the reading is informative without being polemical.

Medicare Spending: One learns, for example, Medicare spending will continue to increase year by year, despite all the talk about “cuts.” The planned reductions have to do with this fact: the increases will be less than what had been projected before the health reform law was passed.

Moreover, the billions of dollars of “cuts” have to do with spending budgets for two different sets of years: 2010 to 2019 and 2013 to 2022. You can see that most of the cuts are in the near future. The two sets of dates account for the different figures quotes: $500 billion and $716 billion in cuts to Medicare.

What about benefits? Mary Agnes Carey, in “Decoding the $716 billion in Medicare Reductions” (8.17.12), writes: “The law does not make any cuts to the amount of benefits beneficiaries receive and adds some new benefits, including closing the "doughnut hole" gap in Medicare prescription drug coverage, and new preventive services, such as an annual wellness visit with a physician.”

So what would be cut by the health reform legislation? Reimbursements to hospitals and payments to insurance companies for Medicare Advantage would be reduced. The expectation, however, is that with millions more customers buying health insurance, the smaller federal reimbursements won’t matter much.

Also, less federal money than originally budgeted will be spent on skilled nursing, home health and hospice. Writes Carey, “Medicare's trustees say the law prolongs the solvency of the Medicare trust fund.” But some wonder whether paying less for hospital and nursing care will at some point hurt quality of care. That is a real question that needs continued oversight.

Paul Ryan’s Medicare Plan

Ryan’s budget is aimed toward cutting federal nondefense spending, of which Medicare is a substantial part. The Congressman’s Medicare proposal would give beneficiaries a set amount of money, and allow them to choose; they could either spend the sum on Medicare or use it to buy private insurance. Insurers would have to provide benefits of equal value to those in the Medicare plan, though how that would be monitored is not quite clear to me. The sum would be linked to the GDP, so it could not grow out of hand.

I’ll discuss more about it in my next blog. For now, I’ve directed you to Kaiser Health News, which can fill in a lot of blanks about the law and Ryan’s counter-proposal.