What's the deal with Obama's call to cut Medicare?

Help me respond to some friends who are generally supportive of our health care reform plans but are really worried about the news going round about the proposed cuts in Medicare.

Cutting the Medicare Advantage program is an easy one - everyone can agree that it is a wasteful (Republican) program that benefits insurers but not patients and rips off taxpayers.

But what about the other proposed cuts? I mean cuts in payments to hospitals and for drugs. Where else does the cost savings, the other cuts, come from? What will their effects be on everyone else in the health system?

Obama says these cuts will not result in a cut in benefits for Medicare patients. He says it will merely cut waste and overspending. What is it exactly that will reduce waste and overspending? How can we be sure that it won't result in worse coverage for Medicare recipients?

The print and news media (and blogs!) don't seem to be very helpful in explaining this issue. At least I am having a hard time finding facts to answer these questions. There seem to be a lot more right wing websites decrying this proposal than there are left or center ones defending it. Can anyone help me out?

That's probably why you're having trouble finding anything. There is no cutting of medicare.

the insurance companies for medicare advantage.

Are the Democrats planning the public option "beyond" Medicare and Medicaid?



They really need to clarify what they mean.

I just goggled and there's info out there but I don't have time to post the details. Here are a couple that broadly attempt to explain the reasoning:

snip

Medicare Advantage: Democrats have been vocal critics of these private plans within Medicare, claiming they’re taxpayer-subsidized profit centers for insurers. Payments to the plans, set by a formula, have been on average 14% higher than what the government typically spends per patient.

The administration is expected to proposed cutting federal payments to insurers that run the plans by requiring them to competitively bid to offer plans. The government would pay them based on an average of the bids, saving $177 billion over 10 years, the WSJ explains. Some of the biggest players in the market are UnitedHealth Group, Humana and Coventry Health Care.

Drugs: The generics industry’s trade group tells the WSJ it’s excited about a proposal to set up a regulatory pathway for companies to create generic versions of biotechnology drugs, which currently can’t be made into copycat versions. The Bush administration resisted generic biologics, but that Democrats have pushed the idea. It would have a big impact on biotech companies like Amgen and Genentech, as well as traditional drugmakers like Merck that have said they want to get into generic biotech.

The administration also wants to curb a practice by makers of traditional branded drugs by which they extend the patent-protected life of existing products by changing them slightly, the WSJ says. The New York Times adds that there’s a proposal for drug makers to give bigger discounts to Medicaid.

Finally, Obama wants upper-income seniors to pay more for Medicare drug plans, much as they do for Medicare’s doctor plan, the WSJ reports.

Hospitals: Obama wants to create one bundled Medicare payment to cover both a hospital stay as well as care for the patient for 30 days after release, a change estimated to save $17 billion over 10 years. See this post on bundled payments, which are flat, standardized fees meant to create more logical standards for chaotic hospital pricing. The Washington Post also hits the issue.

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http://blogs.wsj.com/health/2009/02/26/obama-budget-cuts-medicare-advantage-helps-generic-biotech/

And another:

The good news for older Americans out of the health care tumult is President Barack Obama's pledge that there will be no cuts in Medicare benefits. Indeed, indications are that Medicare will survive stronger if and when the proposed new health care program becomes law.

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So here's the irony: The AMA, which originally opposed Medicare and, until a few weeks ago, opposed a Medicare-like public health care plan, now endorses both and will help make Medicare stronger. More than 90 percent of the nation's non-pediatric physicians participate in Medicare.

Other endorsers of HR 3200 include AARP and the more liberal National Committee to Preserve Social Security and Medicare, the Center for Medicare Advocacy and the Medicare Rights Center. (For an analysis of the bill, visit centerforpolicy analysis.org/id41.html.)

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How can he do that without benefit cuts? He plans to save $176 billion over 10 years by cutting subsides to insurance companies for Medicare Advantage plans.

He has pledges from hospitals to cut billions in their costs, and the drug companies have promised to save money by holding down prices and gradually eliminating the Part D "coverage gap" known as the doughnut hole. I can't say what these pledges are worth.

And to the dismay of Howard Dean, a physician and former chairman of the Democratic National Committee, and David Scheiner, 71, Obama's former doctor, the bill still gives profit-seeking insurance companies a major role in providing coverage.

The legislation would create a new Independent Medicare Advisory Commission to oversee coverage and prices paid by Medicare, whose payment structure and fees will be used as a model for insurers and the public plan. The commission would operate like the present Medicare Payment Advisory Commission (MedPac), which advises Congress and Medicare on coverage and pricing.

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http://www.newsday.com/columnists/other-columnists/gray-matters-don-t-fear-health-care-reform-1.1364829

http://www.whitehouse.gov/realitycheck/

Robert Kocher of the National Economic Council debunks the myth that Health Insurance Reform would be financed by cutting Medicare benefits. To the contrary, reform would simply eliminate waste and unnecessary subsidies to insurance companies.

http://www.whitehouse.gov/realitycheck/31

With everyone's help I'm starting to pull it together! Thanks!

Sounds like the plan to subsidize private insurance in this reform

Bush's Medicare Advantage program subsidizes the for-profit insurance companies for doing the same thing Medicare does - but it costs 40% more. The Dem plan aims to save money by cutting out this wasteful program.

Unnerstan?

That reform drafts propose that private insurers can be part of the "exchange", and enrollees will get public subsidies that will go to these private for-profit companies?

Yes, they can cut Medicare Advantage, but they are replacing it with something that could be much larger scale.

I understand your point now and I agree with you on the exchange thing. Correct me if I'm wrong, but that idea is coming out of the Senate. I don't think it's in HR 6200, the only bill yet to take shape in either house.

A huge giveaway (like Part D) would be a disaster. But politics is the art of blah blah blah, so might it be worth it to give for-profit insurance companies some more customers in exchange for some meaningful reform?

I'm talking
1) no denial of coverage for pre-existing conditions;
2) no cutting-off of coverage;
3) no (lifetime or other) limits on payments;
4) no bias on age or gender; and
5) a viable public option ????

to pay much more. I do not know if you call this a cut.

These are essentially HMOs. There are lots of people
who have these and are satisfied. If someone has one
of these plans and is paying less than 100 dollars monthly,
there is no way their price will not go up once the Government
takes the Company's subsidy away.

If this same person goes on Medicare cost more than they
are now paying to get a Medi-gap policy.

The Republicans are running ads saying the Reforms are done
on the backs of Seniors.

It would be wise if someone gave some assurance to these
people by letting them know how much more they will pay.
at least a range.

Some see paying more for the same service as a cut.

That does sound like problem. However, I don't think there are (relatively) all that many people taking advantage of Medicare Advantage. We definitely have to offer these people something even better.

the fears of cuts.

Saying it is a wasteful program does not cut it with Seniors
who are enrolled in these programs. It is a poor answer
to some older guy who has no problem with his plan.
Since they will not be in Medicare Advantage how much
more is it going to cost them?

These people do not care that the Company is being subsidized.
They like the fact that they are covered for less than 100 per month for
an individual.

If the new plan makes them pay say 200 what is the improvement?

About how much will they have to pay. Even if the companies
are willing to keep them, then they will have to pay more.

as the funds go to them rather than to insurance companies as kickbacks of a sort(to be returned as campaign contributions).

But I agree, until specifics come out everyone will rightly have their doubts. Obama needs to do a lot better than this.

If you want Medicare without any cost saving plans that you will have to pay for it. How can one be against cutting Medicare Fraud or tests that don't helpor encouraging living wills so people that are brain dead don't stay for years on ventilators

electronic medical records means that one g.p. and two specialists will have access to the same blood tests so each one does not have to repeat them. GP sends pt with referral and test results and specialist only needs to order additional tests that were not done or ones whose results need to be refreshed frequently. He wants people admitted to hospital to be treated thoroughly the first time rather than seen, sent home, readmitted, sent out again and then readmitted all for the same thing that was never resolved. It might mean a more thorough initial assessment rather than the revolving door which believe me anyone who has been through it will welcome. Just two examples like that but it's not as if no one knows what we are doing wrong. There is a huge body of evidence about that. It's just hard to change without a big opportunity to begin. This is it.

Many doctors already refuse to accept Medicare patients because of the cutbacks under Bush.

Doctors and dentists I've talked to have no problem with Medicare, but say they lose money when treating Medicaid patients and won't take them. Granted, this is anecdotal but I think it is important to distinguish the two programs. Medicaid give public health insurance a bad name!

I have used Aetna and Cigna before that with them.

The docs I know charge a bit more than average, but that is probably because they are better than average docs. My dentist charges more than my dental insurance covers, but I pay for it because I can see he is really good at what he does. Medicaid patients won't pay the overage so he doesn't want to take them. He does take Medicare even though they cover his rates because at least they are close. He only works four days a week. Nice life. At least he's a solid Dem voter.

Obama asserts his proposed cuts to Medicare spending WILL NOT CUT BENEFITS TO MEDICARE RECIPIENTS. These "cuts" represent COST SAVINGS that result from the parts of health care reform that lead to increased efficiency and will help lower costs over the long term.

Let's look at the "cuts" he is proposing:

* Overhaul Medicare Advantage program ($176B)
AARP has endorsed ending this program for more than a year. This is a Bush-era giveaway to private insurance cronies to provide basically the same coverage as Medicare (except through private companies) but it costs 14% more than Medicare. The government would start paying them based on an average of the bids instead of anything they ask for.

* Create regulatory pathway for companies to create generic versions of biotechnology drugs
Bush administration blocked efforts to allow generics for biotech drugs in the same way that regular generic drugs can be marketed. Generics represent a hugh cost savings.

* End bogus extensions of patents for insignificant changes to drugs
Currently a tiny change in the composition or targeted treatment of generic drugs can lead to an extension of the patent that permits monopoly. The new law will tighten regulations to prevent this abuse so generics can come to market sooner and save consumers million$.

* Pharmaceutical companies agree to reduce pill costs $80B over next 10 years
Insider negotiations have extracted a promise from big Phrma to reduce drug costs and help close the donut hole in Medicare Part D.

* Upper income seniors will pay more for drugs under Medicare
If you are on Medicare and make more than $250,000 a year your drug bill will not be subsidized to the same extent as seniors living at the poverty line.

* Reduce payments to Hospitals
* Obama wants to create one bundled Medicare payment to cover both a hospital stay as well as care for the patient for 30 days after release.
* The administration is also proposing to cut payments for hospitals that routinely readmit patients after they have been discharged. It’s meant to save $8.4 billion over 10 years

* Disease management programs
in which nurses or other coordinators work with patients to better manage and treat their chronic illnesses, “can improve health and may well be cost-effective,”

* Requiring hospitals to adopt electronic medical records
Electronic medical records means that one GP and two specialists will have access to the same blood tests so each one does not have to repeat them. GP sends patient with referral and test results and specialist only needs to order additional tests that were not done or ones whose results need to be refreshed frequently. He wants people admitted to hospital to be treated thoroughly the first time rather than seen, sent home, readmitted, sent out again and then readmitted all for the same thing that was never resolved. It might mean a more thorough initial assessment rather than the revolving door which believe me anyone who has been through it will welcome.

* Cuts in federal subsidies to hospitals that treat large populations of uninsured patients, estimated to save $106 billion over the next decade.
This savings would only accrue if the new system ensures that ALL Americans have health insurance. Currently nearly 50 million Americans do not have health insurance. They are only able to seek care in the Emergency Room which is far more expensive than getting it from GPs (general practioners). Right now all of us have to subsidize the care of the uninsured, at greatly inflated rates. With fewer uninsured this cost will go down.


Currently the only bill that has yet to take shape is in the House, HR 6200. I think all these elements are in the House bill. The Senate, which seems to be even more beholden to special interests, is sure to water it down before or during the Conference Committee negotiations that probably won't begin until Fall. As it now stands, HR 6200 looks like a damn good bill that is worthy of support.

In addition to cost savings in Medicare, HR 6200 also enacts the following revolutionary breakthroughs in health insurance reform:

1) no denial of coverage for pre-existing conditions;
2) no cutting-off of coverage;
3) no (lifetime or other) limits on payments;
4) no bias on age or gender; and
5) a viable public option that will force for-profit insurance companies to hold down administrative costs.

More than half of all personal bankruptcies in the United States are the result of medical problems. Most of these people HAVE health insurance. These reforms will go a long way in reducing the carnage caused by for-profit health insurance companies that make money by DENYING you health care.

The reforms enacted by HR 6200 will reduce health care costs and thereby greatly benefit business large and small as well as the federal budget deficit. Out of control health care costs are the greatest threat to the federal budget and strong action is needed if we want our children and grandchildren to live a prosperous and secure future. This bill is a small step in the right direction and should be supported.

Can I have a K&R for this? If not, please help me make it better. I already gave my friends the rundown on why single payer is best, but they only want to deal with the possible. Thanks!

:kick:

I want to thank those who contributed, but I remember a time when DUers were a little more excited and helpful about threads like this one! I luv ya all anyway.