Why do we have to cut Medicare?

[dkf]

http://www.nytimes.com/imagepages/2010/10/20/business/20leonhardt-graphic.html?ref=economy

http://www.nytimes.com/2010/10/20/business/economy/20leonhardt.html?_r=1&scp=5&sq=dave%20leonhardt&st=cse

[jtown1123]

1. Cutting Medicare will cause death and widespread medical bankruptcies. Health care is expensive,

not simply Medicare. We have to lower overall health care costs across the board, which is caused by private insurers gouging us. If our health care costs were comparable to Germany or other Euro countries, we'd have budget surpluses. UNREC.

[dkf]

3. Then you think all the todo about cutting Medicare is pointless?

I kind of agree with you if so.

People have to accept an overhaul of the health care system instead of insisting Medicare stay the same.

[WinkyDink]

4. No, people DO NOT "have to accept....." MAYBE we should "accept" the demise of the BUSH TAX CUTS.

[dkf]

8. The Bush tax cuts don't even cover the general account deficit.

[Sarah Ibarruri]

18. What can we do to stop the Bush tax cuts from being extended? Aside from outright French Revolution

Anything?

[jtown1123]

7. Health care in this country is too expensive, therefore, Medicare is expensive

until we fix this huge problem, which didn't seem to be addressed in HCR, cutting Medicare or shifting costs to seniors isn't going to help anyone. It could really harm our economy and people who have jobs in home nursing care and the medical field in general.

[dkf]

13. Yes yes yes. That is why the fight is for all the wrong things.

Or are we thinking that insisting on government covering unlimited costs will force them to do this on their own? Will we then complain at the solutions you and I know must be undertaken?

I don't understand what is the point of insisting Medicare stay as is when obviously it can't.

[Yo_Mama]

40. I agree HCR didn't address the problem

But truthfully, Medicare and Medicaid are price-controlled pieces of the health care system. And the government sets those prices quite low, so the Medicare and Medicaid systems are really being subsidized by the privately insured cohort.

So I think you have your cost drivers reversed.

[jtown1123]

50. No that's not correct. Medicare and Medicaid costs are heavily influence by inflation

all the CMS reports support this.

[marmar]

2. I'll take "Discredited Neoliberal Talking Points" for $1000, Alex.

nt

[dkf]

5. This is from the CBO. Why do you discount them?

Is it willful blindness?

[OHdem10]

15. We have a for Profit Medical Care System. Every business

associated with Health is on the Stock Market. Drug Companies,
Med Equip Companies, some Hospital Associations,Insurance Companies.
THESE COMPANIES MUST CONTINUOUSLY MAKE PROFIT to stay in existence.

Insurance Companies make money one of two ways. Increase your
Premiums or Deny you care. As Drug Prices go up so Pharma stays
in Busines, as Treatments go up so Hospitals stay in business,
INSURANCE must increase your premium or deny you care.

Medicare has to work with the rising costs. Medicare has to either
increase Premiums or deny treatments. Medicare does a better
job than the Insurance Companies because they are not working
to make a profit. Keep costs down relatively. As more people
join the Medicare Rolls and the cost of Medicare sky rockets,
either increase payments or deny treatment. Increase payments
means increasing taxes---OMG, no tax increase. Over the years
with all the taxcuts, less money to Medicare Program.

No one has explained to American People, Services cost money.

[WinkyDink]

6. "Neo-Con." ;-)

[dkf]

9. Equals not living in lala land I guess.

Show you all the government figures and get called names. Funny how that works.

[alc]

10. why? because health care reform didn't reform health care

It just rearranged the insurance structure but allows health care prices to keep going through the roof.

[loyalsister]

41. Do you account for...

More stable hospital budget because more insured people results in a reduction near elimination of "indigent care?" I have sat in state budget hearings every year where hospitals were asking for bail out $$. They got it and insurance raised premiums based on the increases that were not necessary if more people are insured. That particular justification as a cost goes away.

Also preventative care reduces the need for treatment of more expensive illnesses\problems. Strep throat can get ugly if not caught. With access to ordinary care it can be treated conventionally. Early advice on minor issues like vitamin deficiencies makes a big difference. ie Addressing vit D and calcium deficiencies that occur with age, reduces bone fractures and all that goes with those.

HCR does reduce costs because the providers get paid more reliably and there is less to pay for. That is one area where cost reductions are expected. It will not truly be tested until 2014 when it kicks in for adults. But, I'm not ready to rush to judgement without considering the actual results.

[CreekDog]

11. we don't --you want to

health care spending is going up too fast in general, but cutting social safety net programs hurts people --you have never expressed any concern for people only dollars here.

you've always been against Medicare spending here.

you've been against tax increases.

you've been for cutting Social Security.

nary a progressive economic position in your quiver and often Fox talking points to boot.

you have no credibility on this subject.

[jtown1123]

14. Agreed.

[dkf]

21. You can't pay for help for people if there aren't the funds.

I fully support getting rid of all the Bush tax cuts, but we spend so much that isn't enough to fix the general account much less social security or Medicare,

Any entity that provides help to the public knows it is all about the funding. To say all I care about are the numbers and not people is stupid since the numbers are the help.

How does this not compute?

Your remote good wishes don't make anyone's life easier. Your money should you choose to give it does.

[jtown1123]

43. We have plenty of money. This is all nonsense. We increase military spending every year and it's

never an issue.

[lumberjack_jeff]

51. Then get more funds.

Open enrollment in Medicare to everyone. Increase market share.

[SammyWinstonJack]

31. Finally!

:applause:

[damntexdem]

12. Because it's so far superior to for-profit insurance as to be a major embarrassment.

And likewise a threat to the for-profit health insurance scam -- the public would likely overwhelmingly support Medicare-for-all if it were strongly pitched by political leaders.

[dkf]

17. Yet look how Canada does it...they have a set health care budget and use funds

Based on priority.

Medicare may be more efficient than private insurance, but that doesn't get us to the levels of other countries as far as I have read.

If you have anything that shows medicare is more cost efficient than other universal coverage countries I would love to see it.

[kctim]

16. DKF

You can't debate people who use emotions instead of facts.

[Bluebear]

42. Who, Democrats?

[Big Blue Marble]

19. Medicare is not the driver of rising costs;

Health care is. Slashing Medicare which delivers care more efficiently, will just increase that cost to
the economy even more. We need to increase the number of people on Medicare and
generally reduce costs systemically.But that would cut the profits.
And profits are more importatant then people!

[dkf]

26. Even Medicare needs to be rehauled, especially if we want everyone to be on it.

The point is it can't stay as is.

[Big Blue Marble]

29. That does not make any sense.

How would you overhaul Medicare? It is a very efficient system now. One of the most efficient
medical delivery systems in our country.

Please be specific as to how you would change it.

I repeat Medicare is not the problem; what is driving up costs is paying for the services that it provides.
It is these costs that are out of control not the payment method.

[Fearless]

20. We don't. Period. Anyone who says anything else wants your money.

[NNN0LHI]

22. Here is the question I have

What is causing Medicare costs to increase like they have? Is it more because medical costs are going up or is it more because the private insurance companies like Blue Cross who processes Medicare claims are charging a lot more for their services enriching their stockholders and CEO's?

Anyone know the answer to that question?

Reason I ask is I have never seen that broken down by the CBO or anybody.

Don

[Big Blue Marble]

24. The entire health care system is broken .

When profits became the driver, instead of healthy outcomes, the system became corrupt.
The main purpose of this system at almost all levels is to extract money from the ill and dying, period.

[NNN0LHI]

25. Do you know the answer to my question?

[Big Blue Marble]

30. The answer to your question is all around you.

Health care costs are rising dramatically. Health care now eats up nearly 20% of GNP.
That is one of every five dollars we spend. And we are getting to a sicker, not healthier society.

The system is totally out of control. Cutting medicare fixes nothing. It only increases
the problem by forcing more deeper into the profit-driven aspects of the system.

[dkf]

27. Increasing participation as the boomers retire and longer life spans.

Here is the trustees report.

http://www.ssa.gov/oact/trsum/index.html

[NNN0LHI]

28. Would you mind cutting and pasting the part from that page that answers my question?

The part where it breaks down what percentage was actually spent reimbursing Medicare providers compared to what percent was spent paying out to private insurance companies for processing Medicare claims.

Thanks in advance.

Don

[dkf]

32. From kaiser...

Technology and Prescription drugs – For several years, spending on new medical technology and prescription drugs has been cited as a leading contributor to the increase in overall health spending; however, in recent years, the rate of spending on prescription drugs has decelerated.  Some analysts state that the availability of more expensive, state-of-the-art technological services and new drugs fuel health care spending not only because the development costs of these products must be recouped by industry but also because they generate consumer demand for more intense, costly services even if they are not necessarily cost-effective. <5>

Chronic disease – The nature of health care in the U.S. has changed dramatically over the past century with longer life spans and greater prevalence of chronic illnesses. This has placed tremendous demands on the health care system, particularly an increased need for treatment of ongoing illnesses and long-term care services such as nursing homes; it is estimated that health care costs for chronic disease treatment account for over 75% of national health expenditures. <6>

Aging of the population – Health expenses rise with age and as the baby boomers are now in their middle years, some say that caring for this growing population has raised costs. This trend will continue as the baby boomers will begin qualifying for Medicare in 2011 and many of the costs are shifted to the public sector.  However, experts agree that aging of the population contributes minimally to the high growth rate of health care spending. <7>

Administrative costs – It is estimated that at least 7% of health care expenditures are for administrative costs (e.g., marketing, billing) and this portion is much lower in the Medicare program (<2%), which is operated by the federal government. <8> Some argue that the mixed public-private system creates overhead costs and large profits that are fueling health care spending.

http://www.kaiseredu.org/Issue-Modules/US-Health-Care-Costs/Background-Brief.aspx

?w=475&h=429&as=1

[NNN0LHI]

35. Kaiser Permanente is an integrated managed care consortium

I am not sure what an integrated managed care consortium even is?

Any idea what an integrated managed care consortium is?

Don

[lumberjack_jeff]

52. Many reasons.

The one that is least often mentioned is the AMA.

Imagine how expensive teachers would be if the NEA strictly controlled how many teachers would be taught and accredited. Doctors are expensive because their union has created and maintains a classic labor shortage.

[DearAbby]

23. Just another bucket of shit we have to eat

while protecting the wealthy.

[suffragette]

33. Looks like this "infinite horizon" accounting was started

as part of a political attack to privatize Social Security and Medicare.

The following notes this specifically about Social Security, but since this would be the same type of projection, it also applies to Medicare:
http://www.ncpssm.org/news/archive/financestatus/

New "Infinite Horizon" Measure of Trust Fund Adequacy

A new measure of Trust Fund adequacy was added to this year's report by the Social Security trustees. It is know as the "infinite horizon" measure. The National Committee to Preserve Social Security and Medicare believes that this infinite horizon measure is not an appropriate replacement for the current 75-year long-range projections.

In a letter to the Social Security trustees in December 2003, the American Academy of Actuaries, the leading professional organization of actuaries, warned that infinite-horizon projections "provide little if any useful information about the program's long-term finances and indeed are likely to mislead anyone lacking technical expertise in the demographic, economic, and actuarial aspects of the program's finances into believing that the program is in far worse financial shape than is actually indicated".
Economic projections decades into the future can fluctuate dramatically in response to small changes in assumptions about economic growth, demographic predictions or technological changes. Expanding these projections to an "infinite horizon" greatly exacerbates the impact of these small errors in predicting the future.
NCPSSM Policy & Research, Oct 2004


I added the bold.

More here on that projection method:
http://www.factcheck.org/article302.html

The Infinite Horizon – Is it useful?

Contrary to the technical panel’s endorsement, the American Academy of Actuaries, a nonpartisan organization that sets standards of practice for actuaries in the US , disputes the value of the infinite horizon projection. In fact, they said it probably would mislead anyone lacking technical expertise and that it provides “little if any useful information” about the system’s long-term finances. In a December 2003 letter to the Social Security Advisory Board, the Academy wrote:

American Academy of Actuaries: …The new measures of the unfunded obligations included in the 2003 report provide little if any useful information about the program’s long-range finances and indeed are likely to mislead anyone lacking technical expertise in the demographic, economic, and actuarial aspects of the program’s finances into believing that the program is in far worse financial condition than is actually indicated.

The Academy states that there is already much uncertainty using 75-year projections, and that extending estimates into the infinite future only increases that uncertainty, producing results that "are of limited value to policymakers.” They point out that changes which took place over the last 75 years were unforeseeable to actuaries in 1928, such as the Great Depression or the baby boom, and therefore have no reason to expect that unforeseeable changes will not occur in the future.

Demographic and economic assumptions have always been a controversial issue among demographers predicting the long-term sustainability of Social Security. Significant advances in life expectancy have taken place over the last century, which exert more pressure on the system's finances as people live longer lives. Whether future mortality rates will continue to slow or increase with medical technology, the Academy of Actuaries argues that the inconsistencies which arise from such long-range assumptions are "inevitable" when making projections over the course of infinity. For this reason, they conclude that the infinite-horizon measurement is a “detriment” to the Trustees Report. They write:

American Academy of Actuaries: Thus, we believe that including these values in the Trustees Report is unnecessary and is, on balance, a detriment to the Trustees’ charge to provide a meaningful and balanced presentation of the financial status of the program.

One final note: The Trustees and actuaries give the $10.4-trillion figure and others what is called "present value," a theoretical lump-sum figure that takes into account expected future inflation and interest rates. Otherwise, any continuing deficit projected into the infinite future would automatically become an infinitely large sum.



Of note in the chart you posted are the "assumptions" that other areas such as the military would shrink. I wonder what that chart would look like if the same projections based on infinite horizons had been started at a point shortly before we went to war in Afghanistan and Iraq? Would those additional costs have then been similarly projected out 75 or more years as continues increases? There are no fluctuations predicted for that line yet even in the last decade there have been enormous fluctuations in fact.


Much more info in this analysis of this method by Galbraith among others.:
http://www.levyinstitute.org/pubs/ppb_98.pdf
THE CASE AGAINST
INTERGENERATIONAL
ACCOUNTING
The Accounting Campaign Against
Social Security and Medicare
JAMES K. GALBRAITH, L. RANDALL WRAY,
and WARREN MOSLER

[bhikkhu]

37. Very true - there is an increasing disconnect between projection and reality

in many areas. It doesn't take much in the way of exponential growth, projected forward, to produce some doom-invoking graphs...the key is that most growth occurs due to immediate conditions, and is unsustainable in itself and self-correcting over the long-term.

[suffragette]

54. Agree about that disconnect. But it sure serves a purpose, doesn't it?

And it looks like Leonhardt has an agenda here. This is about a different article of his:
http://peoplespension.infoshop.org/blogs-mu/2011/06/22/leonhardt-misrepresents-social-security-medicare/#more-297


Another aspect is revenue. Job creation would shift that chart fairly quickly.

[jtown1123]

46. Great research, stats and info thanks!

[suffragette]

53. Very interesting to look at 2001 snapshot of this

since that was before Bush Administration added the "infinite" projection.
Important also though to note that at that point, areas such as projected higher health care costs were just starting to be added in and doing so starting shifting projections.

http://www.epi.org/economic_snapshots/entry/webfeatures_snapshots_archive_05162001/

Making sense of Medicare projections
Edith Rasell
May 23, 2001

Making sense of Medicare projections
In each of their annual reports issued in recent years, the trustees of the Medicare program have extended the years over which the program will be able to pay all the costs of beneficiaries' health care. In the report issued this spring, the trustees projected full funding for the next 28 years, until 2029. (See Snapshot from last week.)

In their reports the trustees also estimate the amount by which the payroll tax, the main source of revenue for the Medicare trust fund, would need to increase to provide 75 years of full funding. Currently, both employers and employees pay 1.45% of earnings into the trust fund, or a total of 2.9%. This tax rate has remained unchanged since 1986 despite huge increases in the cost of health care. In their 1996 report issued five years ago, the trustees estimated the payroll tax would need to rise by a total of 4.52 percentage points, or from 2.9% to 7.42%, to ensure Medicare's ability to pay all health costs for the next 75 years. But by last year, due to a slowing in the rate of growth in Medicare expenditures and improvements in the economy, the shortfall had fallen dramatically (by about three-quarters) from 4.52 percentage points to 1.21. (See chart below.)

This year, because Medicare's future appeared even brighter, a further decline in the shortfall was expected. However, the trustees instead adjusted upward their estimates of future cost growth. In other words, they now assume that health care in the future will cost more than they estimated in years past. Consequently, the funding shortfall, expressed as the tax increase needed to pay for the next 75 years of Medicare, did not continue to fall as expected, but instead rose to 1.97 percentage points. Since we already have full funding through 2029, this money would be needed to pay the costs incurred in 2030 through 2075. If the trustees had not assumed a higher rate of future cost growth, the shortfall would have been 1.12 percentage points, not 1.97. Of course, given all of the fluctuating variables involved, the true rate of future cost growth is unknown.

Medicare is one of the most successful government programs in U.S. history. In addition to its popularity, Medicare has been a leader in containing costs while continuing to provide beneficiaries with access to high quality care. Medicare was designed to be, and for most of its existence has been, a pay-as-you-go program. In other words, most of the tax money received by Medicare in any year was spent that same year paying for beneficiaries' health care. The notion that Medicare's strength and continued existence rests upon the demonstration of a 75-year funding stream is quite recent. Nonetheless, even the trustees' pessimistic projections show 28 years of full funding with no change in the tax rates. As health costs continue to rise and as the number of beneficiaries grows, more money will be needed, but fundamental restructuring of the program is not warranted.

Very important to look at the point "fundamental restructuring of the program is not warranted" in light of G20 plans to restructure social systems. Good key words to search on.

Another must-read here:
http://peoplespension.infoshop.org/blogs-mu/2010/08/09/the-social-security-trustees-%E2%80%9Cinfinitely%E2%80%9D-unreal-projections/

[kenny blankenship]

34. Because private for-profit insurance has a stranglehold on medicine in the US and drives prices up?

While doing absolutely nothing at all to make anyone better, but in fact denying them preventive and acute care in growing numbers to grow it's own profits.

[theophilus]

36. Let's FIX it not cut it, please. The right wing meme seems to be if there

is any problem with a government program just scrap the whole thing. Silly, isn't it? And also murderous in this case.

[Yo_Mama]

38. Recced for introducing a note of reality into the 2 minute rage

It sucks, but we have to suck it up and cope with it.

And since private insurers have nothing to do with Medicaid and Medicare costs, that excuse is out.

[NNN0LHI]

39. Guess who processes Medicare claims?

http://www.opensecrets.org/orgs/summary.php?id=D000000109

Through its 45 local chapters, the Blue Cross/Blue Shield Association provides health care coverage to more than 80 million people. Blue Cross/Blue Shield also has a contract with the federal government to review and process Medicare claims. The association proved to be particularly active lobbying Congress during the health care reform debates of 2009 and 2010. It has also lobbied Congress to make it harder for the government to penalize companies if their employees defraud the Medicare program and process false claims. Local Blue Cross chapters have paid about $340 million to the federal government to settle Medicare fraud charges since 1993.

[jtown1123]

47. You're wrong. Rising private health insurance costs directly affect Medicare and Medicaid.

[Yo_Mama]

55. How?

Explain the mechanism.

[Bluebear]

44. Waah, Medicare will cost more % than the military. THAT'S your rationale for "cutting" it? Wow.

[Tierra_y_Libertad]

45. How about we "cut" out the middlemen (insurance companies) and nationalize it?

[woo me with science]

48. Yup, for a long time the cry was that this is all chess, and he will never do it.

Now the inevitable defense, all over the boards.

Told you so.

[lumberjack_jeff]

49. We don't have to cut it. Run government like a business? Medicare needs more market share. nt