• Bipartisan Deficit Commission says, “No we can’t”

    Look what bipartisanship can do! Kaiser Health News quotes the National Journal,

    For all of the attention surrounding President Obama’s bipartisan commission on deficit reduction, the country’s biggest cost centers — health care in general and Medicare specifically — will likely remain unscathed when the panel offers its recommendations in December. The reason is simple: When congressional Democrats crafted the health care reform package, which became law a little more than six months ago, they did so by squeezing Medicare as much as they could politically … The Democrats’ nifty feat of taking out more than $500 billion from Medicare, mostly by reducing provider payments and changing how the system pays private health insurance companies, has handcuffed the Republican budget hawks who serve on the panel. The cuts have left them nibbling around the edges in an attempt to reduce the nation’s $2.5 trillion health care tab (DoBias, 10/2).

    Shorter: “We’re done cutting Medicare.” Wow. Impressive work on the most pressing domestic policy issue. Need I roll out the graph again? OK, why not:

    Federal spending and revenue projections as a percent of GDP (CBO)

    Alternative Fiscal Scenario

    More here and here.

    • How do you cut it though? What do you cut?

    • The right wants to repeal the ACA. Some people occasionally talk about then cutting MA spending to save total Medicare spending without using it elsewhere. I think that will be hard for them to do since they have pledged themselves as Medicare protectors.


    • The system lacks a sufficient disincentive for overconsumption. It lacks incentives for consumers to select by value. If every doctor in town costs the same co-pay, why shop for value?

    • HSA plus catastrophe coverage, means testing coinsurance, provide only basic coverage, … all good ways to reduce cost. When you have a deep-pocketed buyer without spending discipline, price only goes up.

    • Deficit reduction is easy – HW Bush and Clinton did it in a decade with tax hikes in 89, 90, and 93. Spending cuts are only possible if tax hikes are possible – anything else is merely free lunch politics.

      ACA includes spending cuts, tax hikes, and lots of shared pain just to get to a point that cuts in spending in all sectors for all groups/classes (Medicare, Medicaid, working poor, big corporate, small business, individual) are roughly equal. Just replacing the current system of cutting health care costs by trying to deny health care to a class: those with pre-existing condition (infants, children, workers) or the unemployed or working poor is going to take a decade. Then reducing the growth in costs to inflation will take a decade.

      Opposition to health reform is driven by the demand for a free lunch for the better off groups, delivered by denying health care to those who are disadvantaged.

    • Medicare does not cover medical expenses incurred in foreign countries though medical costs are lower overseas. We should consider altering this policy or provide an incentive/subsidy to seniors to settle down overseas. Such a change may benefit many seniors and at the same time reduce our medical costs.