Monday, August 2nd, 2010 - 15:04
Monday, August 2, 2010 - 14:11
The Obama administration has released a report saying that health reform will save $575 billion in the Medicare program over 10 years. But implementation -- and GOP efforts to thwart implementation -- pose a significant caveat.
An Obama administration report (http://bit.ly/8YGzRU) released today highlights the savings expected from several of the key cost-cutting plans in Medicare in what could be viewed as a status quo -- or perhaps optimistic -- view of the next decade under health reform. If everything goes according to plan, the report finds, $575 billion will be saved in the Medicare program over the next 10 years.
But the health care law sets out what the current Congress -- or at least the Democrats who control it -- want done over the next 10 years. To realize the cost cuts envisioned today, the law must be implemented efficiently and effectively, and future Congresses must stay the course on the plan of action under any political pressures that may come to bear. The evolving Republican plan of attack on health reform -- now an effort to undo individual components instead of an all-out repeal -- is a reminder that the seamless implementation of the status quo becomes more difficult with each Republican who wins a current Democratic seat in November. Of course, efforts to overturn any portion of health reform would have the extremely difficult task of overcoming a presidential veto at least through 2012.
At least two of the key cost-cutting provisions in Medicare under health reform are already under attack by the GOP. And they relate to points of contention, or confusion, among senior citizens, who polls have shown to be more opposed to -- and confused about -- health reform than the general population.
According to the report, the administration expects the Independent Payment Advisory Board to usher in nearly $24 billion in savings after 10 years. This board -- whose recommendations on how to reduce Medicare payments must either be accepted by Congress or lawmakers must come up with an alternative way to cut the same amount of money -- is already a target for repeal under a bill filed by Republican lawmakers. They say decisions about cuts in medical expenditures shouldn't be made by unelected officials.
The report also finds $145 billion in Medicare savings over 10 years through the ending of overpayments to Medicare Advantage plans, which are run by private insurance companies and provide additional services to seniors beyond the basic levels of care. Republican opposition to, and rhetoric about, these cuts is the main reason why many seniors are opposed to, or confused about, what health reform does to their Medicare benefits. Some are understandably concerned about losing their Medicare Advantage benefits, while others believe reform will cut their basic Medicare benefits -- which isn't true.
Three factors will influence whether these two cost-cutting provisions are implemented according to plan, and whether the savings heralded in the administration report come to fruition. The first factor is the outcome of the November midterm elections, and the outcome in the 2012 presidential election. The second is whether the administration can do a better job on its outreach to seniors to effectively communicate what health reform actually does with Medicare benefits. The third is implementation: Will the changes to payments recommended by the independent board and the cutbacks in payments to Medicare Advantage be implemented smoothly so as to not cause disruptions in care likely to mobilize angry senior citizens?
The savings in the administration's report, if realized, are cause for optimism in partially addressing our long-term budget problems when it comes to entitlements. But we should not make the mistake of believing they are a done deal. Far from it.