Friday, August 31, 2012

$716 Billion

A billion here, a billion there. Before you know it you are talking about real money.

When is a cut not a cut?

When they say it isn't.

No matter your political leaning, $716 billion is a lot of money. Doesn't matter if you call it a cut or savings.
The $716 billion line gets people pretty riled up. When Ryan delivered it Wednesday, the convention floor roared. The problem is, the claim is flat-out wrong. “The Affordable Care Act doesn’t steal anything from Medicare,” Henry Aaron, a health-care expert at the Brookings Institution, tells me. “It actually improves Medicare’s finances. No matter how you slice it, the Affordable Care Act strengthens medical hospital insurance.”
Business Week, "Obamacare doesn't steal from Medicare", August, 2012

OK, let's take a look at what will happen when Obamacare meets Medicare.
From 2010 to 2019, Obamacare trims payments to providers by $196 billion. They agreed to take a cut because they will get so many new patients, thanks to the individual mandate.
Congress determines how much providers are paid for procedures performed. Medical providers don't get to ratify the cuts. The payment schedule is take it or leave it.

When and where were providers polled about these cuts?

Do grocers that accept food stamps (EBT cards) agree to take a lower price in exchange for having more customers?

I don't think so.

But Congress is telling, not asking, medical providers to accept a lower price in exchange for more customers (patients).
Another $145 billion comes from phasing out overpayments to Medicare Advantage. 

Congress determines how much they will pay providers and carriers that provide Medicare Advantage coverage.

Each year there are fewer carriers offering fewer Advantage plans to seniors. If future payments to providers are cut, there will be fewer options for seniors.
The spending cuts are in place to keep the system from going bankrupt.
So there really are cuts.

When Medicare payments are cut two things happen. 

Fewer insurance choices and fewer doctors willing to accept new Medicare patients.

The cuts are not without consequence.

For every action there is an equal and opposite reaction.

Math and physics in the same post.


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