About the Author

James C. Capretta

James C. Capretta

New Atlantis Contributing Editor James C. Capretta is an expert on health care and entitlement policy, with years of experience in both the executive and legislative branches of government. E-mail: jcapretta@aei.org.


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James C. Capretta’s Latest New Atlantis Articles

 Health Care with a Conscience” (Fall 2008) 

 Health Care 2008: A Political Primer” (Spring 2008) 

 The Clipboard of the Future” (Winter 2008)

 

 More on James C. Capretta

Text Patterns - by Alan JacobsFuturisms - Critiquing the project to reengineer humanity

Monday, June 3, 2013

Obamacare and the New Medicare Trustees’ Report 

The Medicare Trustees released their annual report on the state of the Medicare trust fund last Friday, and, not surprisingly, Obamacare supporters are already pointing to the report’s findings as evidence that the law is working. Such claims are nonsense, as I argue in a short post on National Review Online.

For starters, Medicare’s unfunded liability remains staggering — a full $43 trillion over the infinite horizon. That’s nearly $7 trillion more than the 2010 report.

Moreover, as was the case in every report from 2010 onward, Medicare’s actuaries have again told us that the real state of Medicare’s financial outlook is far worse than the official projections indicate. That’s because the cuts to Medicare contained in Obamacare are so irrational and blunt that they will almost certainly be reversed. Most especially, the actuaries expect the so-called “productivity improvement factor” will be reversed because of the damage it will do to access to care for seniors. That would be the provision in Obamacare that reduces the inflation update for most non-physician providers of services, especially hospitals. The cuts begin this year and continue every year, in perpetuity. If they are allowed to stand, they will push reimbursement rates for hospitals to levels that are so low they’ll fall below what Medicaid pays by the end of this decade. Medicaid’s rates, meanwhile, are so far below what private insurance pays that the network of hospitals willing to take large numbers of Medicaid patients is quite constrained. The actuaries expect that, by 2030, the cuts would push revenue for 25 percent of the nation’s hospitals below their total costs, leading many of them to withdraw from the Medicare program entirely.

You can read the rest of the post here.

posted by James C. Capretta | 12:06 pm
Tags: Medicare Trustees, Obamacare
File As: Health Care