MENU

Reason.com

Free Minds & Free Markets

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.

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 Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • ||

    Sorry to threadjack again, but I think the fact that SS is in the red is being buried by the "glowing" (i.e. fictional) Medicare numbers. SS was not supposed to be in the red for six more years. Frankly, I'm glad it's happening now. But I'm shocked that this fact isn't getting more play out of at least the Foxy side of the MSM.

    Because this is a BIG FUCKING DEAL.

    For the first time since the 1980s, Social Security will pay out more money in benefits this year than it collects in payroll taxes, according to projections by the Congressional Budget Office.

  • ||

    No, no, no ... everything's just fine. We've got all these government bonds, see—I mean, just piles of them—and the government is sure to come up with some way to make good on them.

  • ||

    So a govt official lies about the fiscal state of their pet project. What's new?

    The only solution will be to close 'em all down - medicare, medicaid, socialist so called security, unemployment, etc and replace them all with the best security for the individual: a personal savings account. Only then will the intergenerational slavery cease.

  • ||

    It is already a lie, they have passed the doc fix for the next year already. The report does not represent current law.

  • ||

    "All governments lie, but disaster lies in wait for countries whose officials smoke the same hashish they give out."
    -- I.F. Stone

  • ||

    Can we stop using the phrase "payment rates to physicians" and use "payment rates to clinics instead". The payments pay the nurses, billing staff, receptionist, etc. as well as the physician.

  • ||

    jim-

    Can we stop using the phrase "payment rates to physicians" and use "payment rates to clinics instead". The payments pay the nurses, billing staff, receptionist, etc. as well as the physician.

    I think I found the problem... The "billing staff" at my dentist doubles as the 'receptionist'.

    I request a service from the doctor.

    The doctor tells this "receptionist" how much to charge me (after we have "negotiated").

    I pay cash and she gives me a receipt.

    How much more "billing staff" is necessary?

    If I am paying "cash", should I be expected to fund your 'billing staff' at the same rate as people whose payment plans actually require a 'billing staff'?

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online