Obama’s Plan to Solve Medicare Insolvency

Rocky Shoals Ahead for Obamacare?  We’ll See.

One keeps thinking “Surely Congress won’t sit still for this one,” as the Obama hits to the rule of law, free enterprise, and economic liberty just keep on coming.

And one keeps being disappointed.  But his health care “reform” proposal may well take some of the wind out of the sails of OSS HopenChange.  Many Americans have missed the fact that Obama originally proposed to offset the cost of his health care reforms, in substantial part, by cuts to Medicare and Medicaid funding.  The fact is becoming progressively harder to miss, however, with news that Obama now suggests doubling the amount to be cut from Medicare and Medicaid over the next decade, to total cuts of more than $600 billion.  The basic premise?  That the $1 trillion-plus Obama health care “reform” plan will take care of the shortfalls, for patients and providers, experienced from the cuts to Medicare and Medicaid.

Even Democratic Congressmen are reacting to this with resistance.  A lot of them have senior citizens among their constituents.  They are aware that Medicare-constrained service pricing is driving more and more doctors out of many of the areas they represent, leaving the remaining doctors overworked and the local citizens underserved.  So it is with visions of visits from AARP that they hear Orwellian pronouncements from the Obama White House like the following:

About $110 billion of the new cuts would come from reducing scheduled increases in Medicare payments.  That would encourage health care providers to increase productivity, White House Budget Director Peter Orszag told reporters. (Emphasis – and incredulity – mine.)

As the CNN report indicates:

Obama also proposed cutting payments to hospitals to treat uninsured patients by $106 billion on the assumption those ranks would decline as health care reforms phase in.

An additional $75 billion would come from “better pricing of Medicare drugs,” Orszag said, adding the White House was in talks with stakeholders over the best way to do that.

The remaining $22 billion in proposed cuts would come from smaller reforms, such as adjusting payment rates for physician imaging services and cutting waste, fraud and abuse.

The new cuts are in addition to a $635 billion “down payment” on health care reform that Obama outlined in his budget to Congress earlier this year.

About half of that came from cuts in Medicare and Medicaid and the rest from revenue proposals such as cutting tax deductions for families that make over $250,000 a year.

It’s like they think no one out here ever read 1984.  Hmmm.  “Better pricing of Medicare drugs.”  That means drug price increases.  Duh.  “Adjusting payment rates for physician imaging services.”  That means paying doctors less for imaging services.  Double DUH.  The only entity that ever sells you on price adjustments that are to your actual advantage is Wal-Mart.

And $106 billion less to hospitals to treat uninsured patients?  That will be a fun sell to Los Angeles, Houston, Atlanta, Miami, and the boroughs of New York City.  I bet even Chicago will resist that one.

Some interesting facts.  First, the seniors who are using Medicare today paid into the Medicare system during their working lives.  Yes, we do all know that Social Security and Medicare were never insurance programs, and have always been income transfer programs.  But there has been an element of integrity, of keeping faith with honest-intentioned ratepayers, in keeping Medicare benefits separate, politically and fiscally, from other federal health programs into which beneficiaries have not paid, such as Medicaid and S-CHIP.  Those programs are straight medical welfare:  your qualifications are showing up with a pulse, and no money.  Medicare is not such a program.  To obtain benefits, you must be an eligible Social Security beneficiary, and have paid into the system for 10 years (or be the spouse of someone who did).  For good reason, Medicare has been treated differently from the medical welfare programs, with backtracking on its promises considered political kryptonite because current beneficiaries had all paid into the system over their working lives.

Obama has proposed to eliminate this distinction for Medicare.  Now, I am convinced that Medicare itself needs reform badly, and should be a much smaller program, predicated on need – but dialed back in increments to avoid leaving current seniors who depend on it without recourse.  That, however, does not mean that I don’t make the very real distinction about it that it is, in fact, a ratepayer program.  Ratepayers have every right to demand that the government make good on their expectations, which are the product of a Medicare contract, made by the federal government with the taxpaying and self-sufficient.

Note, in this regard, that it is Medicare patients Obama proposes to start with, in cutting back the effectiveness of their existing benefits, and throwing many of them, in consequence, onto medical welfare:  “public health benefits.”  Note whom the Medicare patients are lined up beside, in Obama’s plan:  the uninsured on Medicaid, who are to have funding for their treatment cut.  As stagnant Medicare rate schedules, and price “adjustments” for some services, reduce the availability of quality private care for seniors, they would end up sharing the same “reformed” health care services as the uninsured.  I don’t know about conditions in your area, but in mine, that means seniors who worked and paid taxes all their lives being put in the care hopper with gang members suffering gunshot wounds, illegal immigrants suffering domestic abuse, and welfare beneficiaries strung out on meth.

Unless, of course, the seniors can afford to pay higher private insurance rates, or patronize only physicians who deal on a cash basis.  As we face the stark reality of Obamacare, it is well to take a moment to remember that, if we hadn’t commissioned the government to perform health care magic in the first place, all those decades ago, and pull high-quality medical service out of a hat for “low cost,” we wouldn’t be in this situation now.  It was never going to be sustainable, and plenty of people pointed that out as far back as the FDR administration, when this all began.

But now Obama has come along, and we see the vulnerability of polite fiscal fictions.  Obama doesn’t care that you’ve paid into Medicare since you were 18, or 23, or 28.  As far as he is concerned, you are simply one of millions of beneficiaries of a government program.  You’re dependent now.  He can cut your funding, and if you can’t afford to simply opt out of the system, you’re going to end up in the public health clinic next to the drug addicts and the homeless people with syphilis, waiting your turn.

You may think that a lifetime of honest, productive, taxpaying citizenship should put you in a different category when it comes to medical care.  And a lot of people would agree with you – but not Barack Obama.  That was always the danger of letting Medicare turn into a system that guaranteed bigger benefits than the individual’s contributions would support:  that Obama might one day come along, and sweep the polite fiscal fiction aside with the stroke of a pen.

So now we will see, whether the Democrats in Congress can or will stop this thing.  As senior advocacy groups – and major urban areas where public hospitals are always overstretched – get a load of what Obama plans to do here, there will undoubtedly be some backlash.  How vocal or muted it is will be a key test of the solidarity of the political left.  Will AARP, for example, advocate for its membership of American seniors, and their jeopardized Medicare system?  Or will AARP – which after all has been a reliable supporter of left-wing causes – instead try to sell Obama’s plan to its members?  How will Los Angeles Mayor Antonio Villaraigosa, an Obama supporter and mayor of a sprawling city that went heavily for Obama in 2008, handle the prospect of significant funding cuts to LA public hospitals that are already on life support?  How will his counterparts in Detroit, St. Louis, and Boston?

If we are wise, we will see Obama’s cavalier attitude toward Medicare as a strong clue to how he would treat citizens who elected a “public option” for their health insurance – or whose employers did so on their behalf.  We can expect such citizens to be categorized immediately as public beneficiaries, to be jacked around at will.

Of course, Obama denies any intention to affect our access to private health insurance by offering a lower-priced public alternative.  But during his campaign last year, Obama also accused McCain of doing the precise thing Obama is now doing – envisioning cuts to Medicare as a means of shifting public funds for health care “reform” purposes – and Obama lambasted him for it.

“It turns out” – AP quoted Obama as saying – “Senator McCain would pay for part of his plan by making drastic cuts in Medicare – $882 billion worth, $882 billion in Medicare cuts to pay for an ill-conceived health care plan, even as Medicare already faces a looming shortfall.”

The $882 billion figure was concocted by the left-wing Center for American Progress (CAP) think-tank, and had nothing to do with any figure or proposal from the McCain campaign.  So it is not even possible to look for excuses for Obama in the difference between $882 billion and $600+ billion – the man has simply perpetrated another mendacity incident, accusing his campaign opponent of doing what Obama is now busy laboring to do himself.

The gem of a video linked from this Hot Air piece  should be convincing enough about how far we are to trust Obama’s assurances that he is not trying to drive America to a single-payer health care system, with his public insurance option.  The video is 3 minutes long, and you will not regret spending the time.

Don’t miss Charles Rangel’s comment at the end of the CNN/Reuters report on Obama’s added Medicare/Medicaid cuts.  Rangel only plans to cut benefits by $400 billion, not Obama’s $600 billion.  Oh, and when Rangel and the House Democrats do it, it’s not “cuts” but “savings.”

On the “good news” side, cutting Medicare benefits, and shifting Medicare patients to a comprehensive system for all public beneficiaries, does have the effect of dealing, to an as-yet-undetermined extent, with the looming prospect of Medicare insolvency.  Robert Samuelson accuses Obama of not having a plan to get us out from under that fiscal sword of Damocles, but that is manifestly unfair.  Obama does have such a plan.  He is out pushing it right now.

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