Does Anyone Believe the ObamaCare Cuts in Medicare Spending are Real? Probably Not.

This is John Cassidy, writing in The New Yorker:

Reductions in Medicare outlays, according to this CBO analysis, would save four hundred and twenty-six billion dollars between 2010 and 2019 compared with current plans. Look a bit more closely, and you find that more than half of the Medicare savings (two hundred and twenty-nine billion dollars) come from cutting payments to providers of services under the regular program; most of the rest (a hundred and seventy billion dollars) come from changing the way payments are set in the Medicare Advantage program. Does anybody really believe that these savings will materialize? For decades now, Congress has been promising to reduce the growth of Medicare outlays, and yet every year they continue to go up.

Hat tip to Marginal Revolution.

Comments (5)

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  1. Tom H. says:

    If everybody on the left and the right agrees that the Medicare cuts will never happen then why do we continue with the fiction that the health reform bills pay for themselves?

  2. Brian W. says:

    You don’t need a crystal ball to predict this one. As we speak, Congress is considering legislation to RESTORE the cuts to Medicare doctor reimbursement rates.

    Word to the Wise: This effort was never intended to pay for the new health entitlement. It was all to get around CBO’s accounting rules.

  3. Ken says:

    Interesting. And this is from a liberal.

  4. Devon Herrick says:

    I believe there are two primary reasons Congress continually advances the notion of cutting Medicare reimbursements. First, because it sounds reasonable (and painless) to the public – who don’t realize that nothing is ever done. Second, because frightened doctors make campaign donations to avoid the fee cuts.

    In other words, it can all be explained as subterfuge and rent seeking.

  5. Clarence F says:

    We keep hearing cut cost, cut fraud, etc, but what happened to the idea of making the patient responsible for approving all charges? Today the patient is never allowed to see a bill much less approve the charges. If the provider and payor are the only people involved in the payment system how will there ever be control of cost or enough information to have reasonable cost and fraud control? Cost controls will only run providers out of the system not fix the system.