Will healthcare reform mean cuts in Medicare for seniors?
| Washington
Next to 鈥渄eath panels,鈥� the second-most toxic issue for seniors in the current healthcare debate are concerns that Congress will pay to expand the ranks of the insured by cutting Medicare.
The White House and congressional reformers call it 鈥渟avings鈥� -- a move to reward quality care, rather than quantity of services provided, more efficiency, and less waste.
The nonpartisan Congressional Budget Office estimates that the Senate Finance Committee鈥檚 proposed bill will generate $404 billion in savings from FY 2010-201, mainly through reductions in Medicare鈥檚 payment rates in the fee-for-service sector and reining in the popular Medicare Advantage program.
But there鈥檚 a catch: Congress has to muster the political will to enforce these cuts over time and lawmakers have shown little heart for it, especially when it means riling the powerful seniors lobby.
鈥淒uring the whole healthcare debate, Congress is really playing with fiscal dynamite,鈥� says Robert Bixby, executive director of the Concord Coalition, a budget watchdog group. 鈥淚鈥檓 very concerned whether the savings from Medicare will materialize. Typically, Congress sets up a formula and if the formula turns out to give people money, it goes into effect. If it denies people money, Congress changes the formula.鈥�
Exhibit A is Congress鈥檚 annual 鈥淒oc fix.鈥� In 1997, Congress voted to establish a 鈥渟ustainable growth rate鈥� (SGR) for Medicare in a bid to rein in federal deficits. But the annual cuts in the growth of payments to doctors serving Medicare patients proved so unpopular that many physicians stopped accepting Medicare patients. Congress has come up with funds to 鈥渇ix鈥� the cuts every year since 2003.
On Monday, Senate majority leader Harry Reid launches a bid to end the SGR with a key procedural floor vote. The Senate Finance Committee鈥檚 version of healthcare reform funds the 鈥淒oc Fix鈥� only for 2010. The move prompted calls of foul from Republicans, who said it understated the true cost of the bill. The full 10-year cost would be $245 billion, more than
wiping out CBO鈥檚 estimate of a $81 billion surplus for the Senate Finance bill.
The vote sets up a tough choice for moderate Democrats, especially coming just days after the US Treasury announced a record $1.4 trillion deficit for FY 2009. It also sets up a clash with House Democrats, who are committed to pay-as-you-go rules requiring offsets for new spending or tax cuts. But if successful, it moves $245 billion in costs off the table, as Democrats work out a plan to pay for healthcare reform.
Meanwhile, Republicans are turning up the heat on the impact of Medicare cuts on seniors.
鈥淎t the outset of this debate, seniors had no idea they鈥檇 be asked to help foot the bill for this massive experiment in government healthcare through cuts to Medicare,鈥� said Senate Republican leader Mitch McConnell in a floor speech on Thursday.
Proposed cuts in the Finance panel鈥檚 version of the bill include: $130 billion to Medicare Advantage, a supplemental plan that covers some 11 million seniors; $120 billion to hospitals that care for seniors; $40 billion to Home Health agencies; $15 billion to nursing homes; and $8
billion to hospice care.
Democrats respond that the existing Medicare system won鈥檛 work for seniors over the long run, because fewer and fewer doctors are willing to treat them.
Popular programs like Medicare Advantage provide additional benefits that aren鈥檛 available to seniors in rural areas, says Sen. Tom Harkin (D) of Iowa, who chairs the Senate Health, Education, Labor and Pensions Committee. 鈥淚f people want to have those added little features, they can buy supplemental insurance to do that, but I don鈥檛 think it should be done through Medicare.鈥�
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