Existing healthcare bills have a huge effect on Medicare’s financing

SF Gray Panthers, October 11, 2009

Existing healthcare bills have a huge effect on Medicare’s financing

In response to the New York Times blog “Current Health Care Legislation Will Not Control Medical Costs, Experts Warn” a representative of the San Francisco Gray Panthers wrote:

Existing bills have a huge effect on Medicare’s financing, which is approaching crisis, with the Part A Trust Fund running out in 2017.

Existing bills for reducing growth in healthcare costs and insuring many uninsured plan to finance these changes mostly from reducing anticipated growth in Medicare costs, even though the anticipated growth in Medicare costs is known to come mainly from cost growth in healthcare generally, rather than the growth in the number of seniors. This unfairly targets seniors for healthcare cuts.

Many health experts say cost-containment strategies advanced by government, such as preventive and primary care, comparing drugs and treatments for effectiveness, systematic care of chronic disease, and electronic medical records, would give us better care, but would not save much money.

Existing bills do NOT incorporate measures that would effectively reduce healthcare costs, such as eliminating insurance companies (single-payer), hard government negotiation of drug prices and hospital costs, or paying doctors on salary so they have no incentives to over-treat us or under-treat us.

The main Medicare cost saving spelled out so far, eliminating overpayments to HMO-based Medicare Advantage programs, is justified but it covers less than half of the hundreds of billions in ten-year cost savings demanded from Medicare, leaving open questions about the remainder of cost savings.

The Senate Finance Committee bill, currently the center of gravity in legislative negotiations because it is the least expensive, calls for greater cost savings in Medicare payments to hospitals than in elimination of Medicare Advantage overpayments, and creates a Commission to permanently contain Medicare expenses, whose recommendations would take effect unless overruled by lawmakers.

Other proposed Medicare cost-containment measures could have uncertain outcomes, such as bundled payments to be split between doctors, hospitals and managers for individual patient episodes like hip replacements; benefits like co-ordination of care could be outweighed by aggressive cost cutting.

HR 3200’s Medicare-friendly provisions, like eliminating major cuts scheduled for Medicare doctors, eliminating co-pays and deductibles for preventive care, reducing the Part D doughnut hole, and increasing Part B and D premium assistance, may be lost as in the legislative fight to add benefits to the Senate Finance Committee bill.

I believe Medicare’s financial sustainability is best achieved by extending it to all, so the 80 % of us not needing expensive care now will pay in, and be assured that Medicare will be there when we need it.

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