ObamaCare's Imaginary Medicare Savings


Yesterday I noted a new Congressional Budget Office report concluding that Medicare's cost-saving pilot programs didn't end up saving money or improving care. In an article on the same report, The Washington Post's Sarah Kliff says that the results are "a troublesome sign for the health reform law's soon-to-launch attempts to curb Medicare spending." They are.

And as Cato Health Policy Director Michael Cannon points out, those signs have been apparent for a while, at least for anyone paying attention. Indeed, there's never been much reason to be confident that the various Medicare cuts and delivery system reforms built into the health care overhaul will pay off, which is why organizations ranging from the CBO to the International Monetary Fund to Medicare's own actuaries have expressed skepticism about counting on those savings. But rather than test the effectiveness of those programs first, the Obama administration and its backers in Congress chose to make a bet that the hoped-for savings would eventually pay off, and used them to help fund a substantial portion of a trilion dollar new entitlement. 

NEXT: Gary Johnson on SOPA: "There are NO problems with the Internet that we want the government to try to fix!"

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. We are paying for it with imaginary money, so it all works out.

    1. That’s what I was thinking. I expect Debbie Wasserman-Schultz to pop up on the Sunday talk shows and explain that our problem is we’re trying to measure the savings in dollars, when we should be measuring it in quatloos.

      1. when we should be measuring it in quatloos.

        Quatloos? How quaint. I intend to pay for all my personal medical expenses with Skee Ball tickets.

        1. Shit, can you really use them for that? I just threw out a whole bunch.

  2. The intention was to save money.
    Do you doubt their good intentions?
    How dare you!

    1. It wasn’t “a bet that they would eventually pay off” and it wasn’t an “intention to save money.” It was all bullshit statistics to camouflage a government takeover of healthcare. Period.

      1. But, but, but they said they have good intentions!
        Bad results can’t come from good intentions!
        It had to be… Boooooooooosh!

    2. Do you doubt their good intentions?

      One man’s good intentions seems always to involve another man’s underage daughter.

  3. But he’s wearing a white coat and a stethoscope!

  4. So there won’t be a death panel, after all? That (and killing the doc fix) is the only way to cut Medicare costs.

    1. Those things were never going to happen. Learn from this, here’s a Cynics of America membership packet.

    2. No, not the only way. Another way is, hypothetically, having people pay first dollar costs and having insurance only cover catastrophes and expensive things. The sorts of things that HSAs and high deductible plans are supposed to encourage (and they do, in my experience, cover preventative care fully.)

      However, those are politically unpopular with many people for the same reason that top-down cost control is.

      It was obvious from the start that the Medicare cuts would never succeed. That’s why PPACA/Obamacare had to be opposed; the extra spending will happen, the cuts never will. Regardless of how the individual parties line up in the short term, the evidence from history–including on the doc fix– is clear.

      The doc fix itself is clear evidence of what happens when Congress tries to cut Medicare (the SGR). It should have been warning enough.

      1. Hypothetically you are right. Even a $25 co-pay would do wonders.

        Electorally impossible though.

  5. Quasi-OT:

    Girl tweets: “Thank you God for another year of life.”

    God replies: PSYCH!

    1. I’m betting suicide.

      1. Why is no one suggesting that God killed her? I thought they believed in that thing.

  6. Why hasn’t this been repealed yet?

  7. having people pay first dollar costs and having insurance only cover catastrophes and expensive things.

    But if your employer pays $1500.- per month to an insurer, instead of just giving that money directly to you, you win!

    Never mind that you could pay substantially less for catastrophic insurance and then pay day to day medical expenses out of pocket and come out ahead…

  8. How did they get this picture of Obama with a doctor’s coat. Did he pose for it, or did they do some photoshop magic? And if it was photoshop magic, how exactly did they do it?


  10. I was told by a friend that something called “Penny Medical” is offering health insurance plans starting just $1 a day. That is some thing we all can agree.

Please to post comments

Comments are closed.