Do Medicare's Trustees Believe Their Own Report?

Check out early news stories on this morning's Medicare Trustees report and you'll find glowing headlines touting the claim that the new health care law will extend the flagging Medicare trust fund by 12 years. So is ObamaCare going to give Medicare live a longer, fiscally healthier life? Don't bet on it.

There are two problems with this claim. The first, as I noted earlier this week when Health and Human Services Secretary Kathleen Sebelius made a similar claim, is that it requires double counting. If the money is used to extend the program's trust fund, then it can't be used elsewhere.

The second is that Medicare's actuaries aren't confident that the program cuts called for by the PPACA will actually happen. For example, page three of the report's introduction notes that the headline estimates assume that Medicare payment rates to physicians will be cut by a total of 30 percent over the next three years despite "virtual certainty" that legislators will override the scheduled reductions. Indeed, in a somewhat extraordinary caveat, the Trustees report explicitly warns readers not to presume that its top-line cost estimates represent the most likely outcome: "It is important to note that the actual future costs for Medicare are likely to exceed those shown by the current-law projections in this report."

The report provides an alternative scenario, and that scenario shows some improvement over what would have happened had the new health care law not passed—although much less than under the current-law estimates. But even those projections aren't made with great confidence: Due to the relative newness of the PPACA, the report notes, "the projections are much more uncertain than normal, especially in the longer-range future." In other words, the authors of the report don't have a whole lot of faith in these numbers—and neither should we.