When the Affordable Care Act was passed in 2009, one third of the cost of the program was to be funded by “savings” from Medicare. These “savings” were achieved by reducing payouts to service providers and reducing coverage to seniors. The amount to be “saved” was $713 billion over ten years. The Congressional Budget Office has updated that figure to $741 billion.
Why was there so little objection to paring Medicare so drastically? Senior citizens and “baby boomers” about to go on the program should’ve been in an uproar. Yet the media, so punctilious in their colonoscopies performed on any Republican policy or suggestion, literally lapse into a somniferous daze when their ideological comrades come up with a plan. Where were the media outcries? Why was AARP supporting this? Where were the self-proclaimed “champions” of the senior citizen in the halls of Congress when the President’s plan gutted Medicare to the tune of $741 billion?
Confirming this fact, the following is an exchange that occurred between ABC News’ Jake Tapper and President Obama on November 9, 2009.
TAPPER: One of the concerns about health care and how you pay for it — one third of the funding comes from cuts to Medicare.
PRESIDENT BARACK OBAMA: “Right.
TAPPER: A lot of times, as you know, what happens in Congress is somebody will do something bold and then Congress, close to election season, will undo it.
TAPPER: You saw that with the ‘doc fix.’
TAPPER: Are you willing to pledge that whatever cuts in Medicare are being made to fund health insurance, one third of it, that you will veto anything that tries to undo that?
Did you catch that? The President promised to veto his own health care plan if it didn’t include the $741 billion in cuts to Medicare. Medicare was sacrificed on the funding altar of Obamacare.
The Wall Street Journal states: “Many doctors, surgeons and specialists providing critical care to the elderly—such as surgery for hip and knee replacements, sophisticated diagnostics through MRIs and CT scans, and even treatment for cancer and heart disease—will cease serving Medicare patients. If the government is not going to pay, then seniors are not going to get the health services, treatment and care they expect.”
“Everyone should know by now that Medicare suffers dramatic long-term deficits and unfunded liabilities, and is in need of fundamental, structural reforms. But effectively refusing to pay the doctors and hospitals that provide the medical care the program promises to seniors is no way to solve that problem.”
The National Center for Policy Analysis points out that, based on the Medicare Actuary’s official 2012 report, ObamaCare is cutting future Medicare payments to doctors and hospitals for seniors retiring today by an average of $36,000 per retiree, adding up to trillions in Medicare cuts for health care for seniors over the next ten years
When Obama and Biden accuse opponents that their proposals will end Medicare as we know it, the charge rings hollow; for they beat everyone else to the punch! They ensured it with the passage and implementation of Obamacare.
And to make sure that Obamacare has the funds to operate as intended, the law created the Independent Payment Advisory Board (IPAB), an unelected body with the power to implement even more cuts in Medicare as deemed necessary for funding Obamacare.
Forbes said this week, “In 2011, Medicare covered 48.7 million Americans — and cost nearly $550 billion. There’s now a $280-billion gap between the premiums and taxes the program takes in and the benefits it pays out. Since the last presidential election, the amount by which benefit payments exceed dedicated tax collections has nearly quadrupled. This fiscal trend is unsustainable. Medicare is inadequately financed over the next ten years, according to the Trustees.”
Medicare reimbursements to service providers are already low (about 65% of the private market), which is why so many doctors are not adding new Medicare patients and many are getting out of the program altogether. And due to a decade of “kicking the can” down the road and procrastinating resolution of Medicare’s funding problems, this year faces an additional 30% cut in payments, according to Forbes.
In 1997, Congress enacted the sustainable growth rate (SGR) formula to limit the growth of payments to doctors participating in Medicare to the overall economic growth rate. But for the past ten years, Congress has waived those adjustments in reimbursements, effectively postponing the effects. A decade of procrastination has resulted in this year’s pending 30-percent cut in Medicare payments unless Congress procrastinates SGR implementation yet again.
As despicable as it was to raid Medicare to fund Obamacare, it’s worse to ignore the problems in the program, hoping they’ll miraculously solve themselves. It’s time for real leadership and some backbone to assure Medicare’s future viability.
AP award winning columnist Richard Larsen is President of Larsen Financial, a brokerage and financial planning firm in Pocatello, and is a graduate of Idaho State University with a BA in Political Science and History and former member of the Idaho State Journal Editorial Board. He can be reached at firstname.lastname@example.org.
Photo credit: terrellaftermath