Venango County Tea Party Patriots

A non-partisan, non-profit, non-member, association dedicated to educating the public and promoting the principles of fiscal responsibility, constitutionally limited government and free market economics, and all other lawful activities.

Medicare

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Obamacare Adding Fuel to Health Care Spending Crisis

Today’s Congressional Budget Office (CBO) report [2] reiterates the long-standing and obvious fact that there is a health care spending crisis approaching, resulting largely from the structurally flawed Medicare program and made significantly worse by Obamacare’s new unfunded entitlement spending.

The key points:

  • Medicare spending is unsustainable, but it’s even more unsustainable than the CBO says. The CBO report shows that Medicare spending will be 3 percent of gross domestic product (GDP) in 2013, rising to 4.9 percent of GDP by 2038. While this is a huge problem, when rational assumptions are made, the problem gets much worse. This level of Medicare spending assumes that current law will go into effect, which includes a 25 percent pay cut for Medicare physicians in January 2014 and Obamacare’s over $700 billion worth of Medicare payment reductions over the next decade—both of which, if kept in place, would have a severely negative impact on seniors’ ability to access care.
  • Medicare has an inevitable demographic challenge [3] that has already begun, and it is going to get much worse. The baby-boomer generation began enrolling into Medicare in 2011 at the rate of 10,000 new beneficiaries per day and will continue to do so until 2030. The number of beneficiaries will grow from about 52 million in 2013 to over 81 million in 2030. This will dramatically increase Medicare spending—a problem that has been forecasted for decades and has been ignored. Medicare needs structural reforms [4] in order to put it on a sustainable spending path.
  • Obamacare is the single biggest factor driving the growth in mandatory health care spending over the next decade. Obamacare’s exchange subsidies and Medicaid expansion are projected to account for 53 percent of the increase in health care spending through 2023. This means Obamacare’s spending accounts for more than even the aging population and excess health care cost growth.

Read more.

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Left Outraged on Obama’s “Attack” on Medicare

The left is lashing out at a proposal to reform Medicare that President Obama said he would consider as a way to reduce the deficit.

Left-leaning groups and liberal lawmakers say that combining Medicare’s doctor and hospital coverage would saddle beneficiaries with higher costs. The idea has attracted support from leading Republicans, and given Obama’s receptiveness, the policy could receive significant attention in the next round of deficit-reduction talks.

This is exactly what senior advocates fear, and they are launching pre-emptive strikes on Capitol Hill to ensure lawmakers understand the downside.

“There’s a feeling that beneficiaries should be paying more for Medicare, but they already pay a lot out of pocket,” said Diane Lifsey, legislative representative with the National Committee to Preserve Social Security and Medicare.

“That’s why we oppose this idea. The proposals are meant to save money, but they just end up costing beneficiaries,” she said.

Combining Medicare’s coverage for hospital and doctor care would unify Parts A and B under a single deductible.

Most proposals would enact a cap on catastrophic costs, and some include protections for low-income patients.

Critics say a unified deductible would raise expenses by hundreds of dollars for the vast majority of beneficiaries who do not use hospital care.

Read more.

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This Thing Called Obamacare

At a recent press conference, President Obama delivered a reassuring announcement to the millions of Americans who are wary of the upcoming deluge of ObamaCare’s full implementation: “For the average American out there, for the 85 and 90 percent of Americans who already have health insurance, this thing’s already happened. And their only impact is that their insurance is stronger, better and more secure than it was before. Full stop. That’s it. They don’t have to worry about anything else.”

Well.  “Full stop.”  So that solves it.  Is everyone happy now?

The theatrics from the president are appreciated; they lighten the mood a bit.  But they’ll fall short when you don’t have health insurance and are faced with either being uninsured or joining the Medicaid rolls.  “Full stop” is actually less of an authoritative command than an indication of what will happen to many people’s insurance coverage once ObamaCare is fully implemented.  As the Wall Street Journal pointed out earlier this year, the entirety of ObamaCare’s regulatory framework will likely raise premiums in thirteen states “somewhere between 65% and 100%.”  This includes my home state of Virginia, which, even at the lowest end of the scale, would find me paying a little over $250 a month for health insurance after ObamaCare goes into high gear.  “Full stop” is what will then occur with my premium payments; but once I cancel the plan, I won’t have to worry about anything else.  So it turns out that the president is partly right.

It’s instructive to witness the inability of politicians to accurately predict their own legislative outcomes.  In 1967, Congress predicted that Medicare spending would equal only $12 billion per year by 1990 — a paltry sum.  Actual spending for that year was $110 billion, so they were slightly off the mark.  But of course, by that point, Medicare was fully entrenched in the American political system, and the notion of even modestly reforming it was off the table (it evidently continues to be off the table today).  Thus stands the ossified character of American government, and thus will likely stand ObamaCare twenty-five years from now, too.  Full stop.

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