Budget Deficit

IMF Joins CBO, CMS In Expressing Skepticism About ObamaCare's Medicare Cuts

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How dare you interrupt me during chart-making time!

When Medicare's chief actuary, Richard Foster, released a report on the likely effects of the Affordable Care Act, the big takeaway for most of the press was that total health care spending in the U.S. was projected to rise over the next decade. That was a big deal, but just as big a deal—possibly even bigger—was that Foster, who crunches numbers for the Center for Medicare and Medicaid Services, expressed skepticism that the Medicare cuts that pay for about half of the law's ten-year cost could be "unrealistic and unsustainable."

Now Foster's skepticism is echoed by a report on the coming budgepocalypse put out by the IMF. On page 43, the report warns that "the substantial decrease in Medicare payment rates [called for by the Affordable Care Act] to health care providers may prove difficult to implement."

In its numerous scores of the reform bill drafts, the Congressional Budget Office, of course, also provided cautious and carefully hedged warnings about the Medicare cuts, noting that, historically, Medicare cuts have not always been implemented as called for. But President Obama and OMB director Peter Orszag largely ignored those cautions and treated the CBO's deficit projections as facts instead.

Given that one of the president's key messages was that, once passed, the bill would reduce the national deficit, that's hardly a surprise: If the Medicare savings don't materialize, we'll see higher deficits instead. And the truth—"it might reduce the deficit, but we're not totally confident"—wouldn't have been much of a sales pitch.

I took a longer look at the PPACA's budgeting here.