Medicare Math: The Latest With Which to Discombobulate Your Mind, Wallet, Future


If you're left puzzling over how to carry the $940 billion in spending and subtract the $138 billion in deficit reduction as health care reform is being debated, check out Tobin Harshaw's excellent round-up of dueling scratchpads over at the New York Times' Opinionator blog. The conclusion, after running through a pretty thorough summary of arguments claiming the bill does cut the deficit over its first decade and that it does not (Reason's own Peter Suderman has a star turn in that section!): "Only time will tell."

Those last four words are the saddest in an opinion editor's vocabulary — always true and never helpful in the slightest. The additional problem here, of course, is that members of Congress have only the rest of the weekend to guess what time will reveal.

More here.

It seems to me that if that's the best you can come up with after running through the numbers, that's enough on its face to say no to this bill, given all the other stuff it does, from mandating insurance coverage, to expanding all sorts of control over how coverage is delivered. Given the history of other interventions into the medical industry, it's implausible that this won't end up costing massive amounts more than whatever figures are being bandied about.

But apart from that, this doesn't even represent a fundamental reform, one that would radically open up the health care industry to the sorts of personalized service and market competition that have actually driven costs down and services up in every other aspect of the economy that is not subject to huge amounts of cheap government money and subsidies (read: house prices and education, which along with health care tell you everything you need to know about what happens when the government gets overly involved in a given sector).

It's also worth noting that a hunk a hunk a burning change is not included in this bill but is surely coming down the road. That's the so-called "doc fix," which routinely staves off cuts in Medicare reimbursements to physicians in the name of propping up one of the great boondoggles of the past 45 years. As Reason alum Ed Carson writes in Investors Business Daily:

The Sustainable Growth Rate imposes automatic cuts in Medicare payment rates to doctors.

For several years, fearing a revolt by doctors — and seniors — Congress has suspended those cuts. The original draft of the House health care bill included a permanent "doc fix." But that ballooned deficits, so Democrats dropped it, even though everyone knows Congress isn't going to slash doctors' rates. The CBO has estimated a "doc fix" would cost $247 billion over 10 years.

Supposed cuts in Medicare spending help to squeak this bill under the fake door titled "cuts deficit by a teeny amount over its first 10 years," as does the inclusion of a student loan provision (yes) in the reconciliation version that cuts subsidies to private lenders for student loans. Don't hold your breath on any of this actually happening. The feds, you see, are looking to cut out the middleman when it comes to brokering student loans; they promise $19.4 billion in savings from this, which as Carson writes, "for virtually all of the $19.8 billion in deficit reduction from the [House's] health care reconciliation bill." 

Regarding the "doc fix," look for it to come into play soon enough if/when the health care reform passes. Here's Speaker Pelosi talking on the record on Friday, on why the fix wasn't in the bill that's getting voted on today. Especially since a permanent fix was part of earlier versions of the House bill:

Well, we have been including it in legislation for a long time, because it's not about a doctor fix, it's about our seniors or anyone who relies upon Medicare to have access to physicians, that they be in their region and in their program.

So this is again, you call it the doctor fix, but it is really about access to health care for Americans. It's not in this bill, but we will have it soon. And we have made a commitment to do this. This is very important.

That's from the liberal site TPM, which notes "Leadership aides would never say that a doc fix definitely won't happen." Which is, of course, another way of saying they will. And when they do, say goodbye to even the fiction of deficit cuts via a $940 billion (and counting) health care reform bill. But as any number of really bad gamblers could tell you (but probably wouldn't): You gotta spend money to lose money.