Understanding Medicare “Cuts
August 22, 2012, 7:45 am4 Comments
Understanding Medicare “Cuts”
Jackie Calmes has a very good piece about those Medicare “cuts” Romney promises to repeal. As she emphasizes, all of these involve reductions in payments to insurance companies and health providers, rather than reductions in patient benefits. So what are we talking about?
Sarah Kliff had a good summary. Most of the proposed savings come from reducing overpayments to Medicare Advantage and reducing reimbursement rates to hospitals.
What should you know about these changes?
Medicare Advantage is a 15-year failed experiment in privatization. Running Medicare through private insurance companies was supposed to save money through the magic of the marketplace; in reality, private insurers, with their extra overhead, have never been able to compete on a level playing field with conventional Medicare. But Congress refused to take no for an answer, and kept the program alive by paying the insurers substantially more than the costs per patient of regular Medicare. All the ACA does is end this overpayment.
As for the cuts in hospital reimbursement, the key thing to know is that the hospital industry itself negotiated those cuts. Here’s how John McDonough’s Inside National Health Reform describes it:
The negotiation involved the White House and high-level Senate Finance staffers. The agreement involved two numbers: $155 billion in reductions over ten years, and health insurance coverage for 95 percent of all Americans. At these numbers, hospital leaders were convinced that the revenue from the added covered lives would more than make up for their losses on the Medicare side, and it was a deal they could embrace.
So, does any of this sound like a devastating blow to seniors’ health care?
http://krugman.blogs.nytimes.com/
