“The Rising”: Return Of The Big GOP Medicare Lie
The participant’s in last night’s GOP presidential debate once again took the opportunity to pretend that the Affordable Care Act (“Obamacare”) put a massive dent in Medicare by cutting $500 billion from the program.
Michele Bachmann told us that “We know that President Obama stole over $500 billion out of Medicare to switch it over to Obamacare.” Mitt Romney intoned “He cut Medicare by $500 billion. This is a Democratic president the liberal, so to speak, cut Medicare.”
Yeah…except that nobody stole anything and Medicare was not cut by $500 billion.
Here are the facts:
For starters, nobody cut anything from the Medicare budget in the health care reform bill. The actions taken in the legislation are designed to slow the growth of Medicare spending without cutting benefits. Further, not one cent that would have gone to Medicare is somehow being shifted over to a program created by Obamacare (for first time readers, I readily use the term Obamacare because I believe that this name will ultimately stand as an honor to the President who made it happen.)
With respect to the infamous $500 billion, the non-partisan Congressional Budget Office has made it clear that the bulk of the projected savings will come from two primary sources—ending the subsidies to health insurance companies who offer Medicare Advantage programs and reining in the growth of payments to physicians. The remainder will, hopefully, come from cutting back on the waste and fraud that have long been rampant in the Medicare system.
Let’s begin with the Medicare Advantage program. Established via the Medicare Modernization Act of 2003. the program—a Bush/GOP creation—was ostensibly invented to encourage Medicare beneficiaries to gravitate towards privately operated insurance programs pursuant to the theory that the private sector could do a better job of delivering care to our seniors than the government.
I say ‘ostensibly’ because the true purpose was to create a windfall for the private insurance companies who have done so much for so long for so many Republican elected officials.
The way the script played out, the private insurance companies said that they would only be able to paricipate in the program if, and only if, the government gave them a head start by agreeing to subsidize their “start up costs” until the year 2010.
As a result of the deal, Medicare found itself paying, on average, an 11% surcharge on medical services and procedures provided by Medicare Advantage plans. This was enough to guarantee the insurance providers a tidy profit fully comprised of the government subsidies, creating one of the greatest examples of corporate welfare in the history of the nation.
Not surprisingly, the health insurers took advantage of the windfall to attract customers by offering very low premium charges, not to mention free gym memberships, one pair of eyeglasses per year, spa treatments, zero co-pays and assorted other benefits not available to those who opted to take their Medicare directly from the government. And why not? The insurers don’t need to make a penny from those who were insured as each customer guarantees them an 11 percent return on any medical benefit receieved courtesy of the Medicare program. Thus, they are more than happy to offer a free toaster to anyone who agrees to sign up.
What Obamacare did was put an end to the subsidies, thereby reducing future costs to the program by billions while continuing to provide Medicare beneficiaries with the benefits promised.
By any standards, this was a no-brainer in terms of reigning in the growing costs of Medicare and creating a system that is fair to all beneficiaries.
Now, the doctors.
This gets a bit tricky and, to be honest, I don’t really believe that these savings will ever materialize.
At the heart of the discussion is a formula that was designed during the Clinton Administration called the Medicare Sustainable Growth Rate, or SGR. The approach was created in an attempt to control Medicare spending for physician services with the idea being that the yearly increase in the expense per Medicare beneficiary should be tied to the growth in GDP. Thus, when actual Medicare spending exceeds the annual target in a given year, the SGR requires that physicians, and other system providers, must take a cut in order to bring the spending back in line with the annual spending targets.
The docs, understandably, do not like the idea of taking less in their Medicare payments. As a result, Congress has been delaying the cuts for years, constantly rolling them over into the next year at which time they roll them over again and again. Were Congress to ever stop delaying the SGR cuts, the physicians would find themselves feeling the cumulative pain of the delays with a one time Medicare rate reduction in excess of 20 percent.
These cuts are factored into the Medicare savings projections, along with hoped for savings to come by encouraging physicians to try some different approaches to practicing medicine.
Will this ever happen? Probably not.
So, while a skeptic can argue that these projected savings may never materialize, one cannot argue that this is, somehow, a cut to the Medicare program.
The bottom line is that there is nothing in the ACA that takes anything away from Medicare beneficiaries, now or in the future. Yet, the GOP continues to do its best to scare the hell out of seniors, the most reliable voter block in the nation.
We need to take this very seriously.
If the 2010 elections taught us anything, it is that a frightened voter population will do some crazy things. So, it’s on us to make sure that our grandparents and parents understand that Repubican fear peddlers are selling nothing but lies and that falling for the lies could result in the end of Medicare as we know it if the Republicans are permitted to gain full control of the government.
If you would like more information on this to share with family and friends, just let me know. The effort to mislead our senior citizens worked well in 2010. We simply cannot permit it to work again in 2012.
By: Rick Ungar, Mother Jones, September 13, 2011
Texas-Style Tort Reform: Rick Perry’s Texas Health Care Hoax
In his quest to win the Republican presidential nomination, Texas Gov. Rick Perry is perpetuating a convincing hoax: that implementing Texas-style tort reformwould go a long way toward curing what ails the U.S. health care system.
Like his fellow GOP contenders, Perry consistently denounces “Obamacare” as “a budget-busting, government takeover of healthcare” and “the greatest intrusion on individual freedom in a generation.” He promises to repeal the law if elected.
Unlike those in the “repeal-and-replace” wing of the Republican Party, however, Perry has emerged as leader of the “repeal-and-let-the-states-figure-it-out” wing that believes the federal government has no legitimate role in fixing America’s health care system.
“To hear federal officials tell it, they’ve got all the answers on health care and it’s up to the rest of us to sit, wait and embrace whatever solution — if any — they may eventually provide,” Perry wrote in a newspaper commentary in 2009. “I find this troubling, since states have shown they know a thing or two about solving problems that affect their citizens.”
Even as he points with pride to the alleged benefits of malpractice and other tort reforms that have been enacted during his tenure as governor of Texas, Perry says he is opposed to tort reform at the federal level. He cites the 10th Amendment to the Constitution, which states-rights advocates say limits the role of the federal government.
But if Perry had his way, all the states would do as Texas did in 2003 when lawmakers enacted legislation, which he championed, limiting the amount of money juries can award patients who win malpractice lawsuits against doctors and hospitals. The legislation capped non-economic (pain and suffering) damages at $250,000 in lawsuits against doctors and $750,000 against hospitals. A few months after he signed the bill into law, the state’s voters narrowly passed a constitutional amendment, also endorsed by Perry, which had the same effect. Proponents of the amendment wanted to be sure the new law would be constitutional.
Texas, he wrote in that 2009 commentary “stands as a good example of how smart, responsible policy can help us take major steps toward fixing a damaged medical system, starting with legal reforms.”
As a result of the 2003 tort reform law, malpractice liability insurers reduced their rates in Texas and, according to Perry, the number of doctors applying to practice medicine in the state “skyrocketed.”
He says that in the first five years after tort reform was enacted, 14,498 doctors either returned to practice in Texas or began practicing there for the first time.
Tort Reform Backfires in Texas
That certainly sounds impressive — so long as you look at that number in isolation. But when you look at how Texas stacks up with the rest of the country in terms of physician growth in direct patient care, tort reform appears to have given Texas no leg up in competition with others states for doctors. In fact, according to statistics compiled by the American Medical Association and other physician organizations, Texas has actually lost ground when it comes to the number of doctors practicing in the state since tort reform was enacted. Big time.
In 2008, the number of physicians in patient care per 10,000 civilian population in the United States was 25.7. At just 20.2 doctors per 10,000 people, Texas ranked near the bottom of the 50 states. In fact, only nine states fared worse. In 2000, three years before tort reform, Texas was still bringing up the rear, but not as badly. Back then, 11 states fared worse than the Lone Star state.
Even more revealing, the number of doctors in patient care increased 13.2 percent nationwide from 2000 to 2008. It increased only 12.8 percent in Texas. The rate of growth was actually greater in 41 other states and in Washington, D.C. than it was in the Lone Star state.
It is true that malpractice insurance rates dropped in Texas after tort reform was enacted, but Texans would be hard pressed to claim any direct benefit from that drop — except, that is, Texans who are doctors.
The Dallas Morning News published a chart earlier this year showing that the average malpractice rate charged ob/gyns in Texas by the state’s largest domestic insurer of physicians fell from $53,752 in 2003 to $33,881 in 2011. The paper reported drops of similar percentages for doctors in family practice and general surgery.
Advocates of tort reform have long claimed that one of the reasons for escalating health care costs is the “defensive medicine” doctors practice, such as over-treating and prescribing more medications and diagnostic tests than necessary, out of fear of being sued. Well, if Texans believed their own health insurance rates would go down once tort reform made defensive medicine less prevalent, they have by now been disabused of that notion. The chances of a Texas family saving a few bucks on premiums would actually be greater if they moved to another state.
In 2010, the average premium for family coverage in Texas was $14,526. That’s $655 higher than the U.S. average. Those numbers seem to indicate that doctors have not passed on their own insurance savings to their patients and that they are not practicing medicine any less defensively than before tort reform was enacted.
Not only are Texans paying more for their own insurance while doctors are paying less for theirs, their chances of getting employer-subsidized coverage is less than it would be if they lived in another state. The Dallas Morning News, citing statistics from the Agency for Healthcare Research and Quality and other sources, reported that a smaller percentage of employers in Texas offered coverage to their workers last year than in the U.S. as a whole (51 percent and 53.8 percent, respectively). And the Texans who do have coverage through the workplace are contributing far more out of their own pockets for that coverage than people who live in most other states. In Texas last year, the average employee contribution toward company-sponsored coverage was $4,500. The U.S. average was much lower: $3,721.
Another statistic Perry is not likely to mention when he talks about the benefits of tort reform is the number of Texans who are uninsured. The U.S. Census Bureau reports that Texas continues to be the state with the highest percentage of its residents without coverage, a whopping 25 percent last year, compared to about 16 percent nationwide. It was dead last in 2003 and it is dead last now.
All this should leave us wondering what “thing or two” states have come up with to solve the problems that affect their citizens. Considering the dismal state of health care in Texas, perhaps Perry had Massachusetts in mind.
By: Wendell Potter, Center for Media and Democracy, September 1, 2011
The 11th Circuit’s Affordable Care Act Decision Cannot Be Squared With The Constitution
The key passage in today’s opinion striking down part of the Affordable Care Act appears on page 113, where the two judge majority explains how they will determine whether this law is constitutional:
In answering whether the federal government may exercise this asserted power to issue a mandate for Americans to purchase health insurance from private companies, we next examine a number of issues: (1) the unprecedented nature of the individual mandate; (2) whether Congress’s exercise of its commerce authority affords sufficient and meaningful limiting principles; and (3) the far-reaching implications for our federalist structure.
This is one way to evaluate whether a law is constitutional, but a better way is to ask whether the law can be squared with text of the Constitution. The Constitution provides that Congress may “regulate Commerce…among the several states,” and the very first Supreme Court decision interpreting this language made clear that this power is “plenary,” meaning that Congress may choose whatever means it wishes to regulate interstate marketplaces such as the national health care market, so long as it does not violate another textual provision of the Constitution.
A law requiring most Americans to either carry insurance or pay slightly more taxes clearly regulates the national market for health care. It determines how people will finance health care purchases. It lowers the cost of health insurance. And it protects that market from something known as an “adverse selection death spiral.” So that should have been the end of the case. The Court cites no provision of the Constitution limiting Congress’ authority to pass this law because no such provision exists.
Instead, it imposes two extra-textual limits on national leaders’ ability to solve national problems. If the law is somehow “unprecedented,” and if a decision upholding the law lacks vague and undetermined “meaningful limit[s]” on Congress’ authority that somehow upset the balance between federal and state power, then the law must be struck down even if the Constitution’s text says otherwise.
Yet even if these two novel limits are taken seriously, the court’s analysis still makes no sense. For one thing, the law is only “unprecedented” in the sense that it preferred a market-driven solution to the problem of widespread uninsurance over more government driven solutions such as Medicare. The truth is that Congress already requires nearly all Americans to purchase health insurance — and they have done so for many years. Every year the federal government collects taxes which are in no way optional. A portion of these taxes are then spent to buy health insurance for the elderly (Medicare) for the poor (Medicaid) and for children (SCHIP).
So the only real question in this case is whether the government is required to first take your money and then buy health coverage for you, or whether the Constitution allows Congress to cut out the middle man.
The Court is also simply wrong to claim that a decision upholding the ACA would necessarily mean that there are no limits on federal power. The Constitution does not simply allow Congress to regulate commercial markets. It establishes that, in Justice Scalia’s words, “where Congress has the authority to enact a regulation of interstate commerce, it possesses every power needed to make that regulation effective.”
Scalia’s rule is important because the ACA doesn’t just require people to carry insurance, it also eliminates one of the insurance industry’s most abusive practices — denying coverage to patients with pre-existing conditions. This ban cannot function if patients are free to enter and exit the insurance market at will. If patients can wait until they get sick to buy insurance, they will drain all the money out of an insurance plan that they have not previously paid into, leaving nothing left for the rest of the plan’s consumers.
Because the ACA’s regulation of the national insurance market cannot function without a requirement that nearly every American carry insurance. this requirement is clearly constitutional under Justice Scalia’s statement that Congress possess “every power needed” to make it’s economic regulations effective. Moreover, upholding the Affordable Care Act under Justice Scalia’s rule would require a court to do nothing more than hold that the Affordable Care Act is constitutional. There is no federal law which depends upon mandatory broccoli purchases, for example, in order to function properly in the same way that the ACA’s preexisting conditions provision can only function properly in the presence of an insurance coverage requirement. Accordingly, the court’s concern that upholding the law would destroy any limits on federal power is unwarranted.
As a final note, it is likely that conservatives will tout the fact that Judge Hull was appointed by President Clinton in the same way that progressives touted Bush-appointed Judge Sutton’s decision rejecting an ACA challenge. The two judges are not comparable, however. Judge Sutton is a former Scalia clerk who stood on the vanguard of the conservative legal movement for many years. Judge Hull, by contrast, is a compromise nominee Clinton selected in order to overcome obstruction from the Republican-controlled Senate.
Hull has a long record of conservative criminal and individual rights decisions. We now know that she is also very far to the right questions of federal power. That is unfortunate, but it also places her well to the right of some of the Supreme Court’s most conservative members.
By: Ian Millhiser, U. S. News and World Report, August 12, 2011
The Fight Will Continue: Democrats Will Lose Now But They Can Win Later
Democrats are going to lose this one. The first stage of the emerging deal doesn’t include revenue, doesn’t include stimulus, and lets Republicans pocket a trillion dollars or more in cuts without offering anything to Democrats in return.
The second stage convenes a congressional “Supercommittee” to recommend up to $2 trillion in further cuts, and if their plan doesn’t pass Congress, there’s an enforcement mechanism that begins making automatic, across-the-board cuts to almost all categories of spending. So heads Democrats lose, tails Republicans win.
It’s difficult to see how it could have ended otherwise. Virtually no Democrats are willing to go past Aug. 2 without raising the debt ceiling. Plenty of Republicans are prepared to blow through the deadline. That’s not a dynamic that lends itself to a deal. That’s a dynamic that lends itself to a ransom.
But Democrats will have their turn. On Dec. 31, 2012, three weeks before the end of President Barack Obama’s current term in office, the Bush tax cuts expire. Income tax rates will return to their Clinton-era levels. That amounts to a $3.6 trillion tax increase over 10 years, three or four times the $800 billion to $1.2 trillion in revenue increases that Obama and Speaker John Boehner were kicking around. And all Democrats need to do to secure that deal is…nothing.
This scenario is the inverse of the current debt-ceiling debate, in which inaction will lead to an outcome — a government default — that Democrats can’t stomach and Republicans think they can. There is only one thing that could stand in the way of Democrats passing significant new revenues on the last day of 2012: the Obama administration.
Republicans — and even some Democrats — think that the Obama administration lives to collect revenue. The truth is closer to the opposite. Senior administration aides view the expiration of the Bush tax cuts as less of an opportunity than a chore. About four-fifths of the cuts go to households making less than $250,000 a year, and they don’t want to raise taxes on those folks. They don’t like the politics of the issue, either. It’s an article of faith among Democratic strategists that debates on taxes inevitably favor Republicans, allowing Democrats to be hammered from the right and undermined from the left. White House aides would rather focus on “win the future” issues like infrastructure, education and energy.
The White House’s strategy in the debt-ceiling negotiations has reflected its ambivalence, with Obama trying to extract either as much revenue as Republicans would allow or as little as Democrats would accept. Obama even offered Boehner a deal in which the Bush tax cuts would be extended right now, so Republicans wouldn’t have to fear a subsequent negotiation in which they lacked leverage. Boehner rejected that deal and, in doing, might have saved the safety net.
But the Obama administration doesn’t want to take its second chance. They argue that the economy will still be recovering in 2013, and so it’s not an ideal time for a large tax increase. True. But what happens in 2012 is not simply setting tax policy for 2013. It’s setting tax policy for decades to come.
Health costs are rising and the Baby Boomers are retiring. If taxes don’t rise, none of these commitments are sustainable. And Republicans, in normal times, are perfectly capable of blocking any and all attempts to raise taxes. For Democrats, the expiration of the Bush tax cuts presents a unique opportunity in which GOP intransigence will mean more new revenues rather than no new revenues.
The alternative has been on clear display in recent months. Republicans can’t necessarily sell the country on big cuts in federal programs, but they can make them necessary. All they need to do is hold the line aganst taxes, allow deficits will continue to mount, and then use forcing events like the debt ceiling or the budget to demand huge spending cuts. A world in which the two parties can’t agree on tax increases but can agree on spending cuts is one in which the government eventually shrinks dramatically. Republicans understand this. Do Democrats?
A year ago, I was less concerned about the Bush tax cuts. I assumed, as did many in Washington, that the Republicans’ antipathy to taxes was a negotiating stance. Eventually, we would strike a “grand bargain” that would reduce spending and raise revenue substantially. The past few months have proved me wrong.
Republicans have shown, that they will block any and all tax increases, no matter what incentives they are offered in return and no matter how dire the consequences of their refusal. Next year’s deadline offers Democrats their only chance to negotiate from a superior strategic position. Republicans will still be able to refuse to raise taxes. But if they do, it won’t matter. The only way they can succeed in keeping taxes from rising is if the Obama administration and the Democrats stand shoulder-to-shoulder with them to extend the Bush tax cuts.
By: Ezra Klein, The Washington Post, July 31, 2011
Tom Coburn’s Cuts: Military’s Tricare Prime Health Care Program Targeted
Sen. Tom Coburn (R-Okla.) wants to cut taxpayer funding for non-military elements of the Defense Department, starting with making retired, uninjured service members pay more for what he described as “extremely low-cost health care for life” for themselves, their wives and dependents under the Tricare Prime system.
For military retirees eligible for Medicare, he also wants to raise the co-payments that they are charged to be in Tricare for life, the second payer for health care after Medicare. In addition, he wants to increase low fees that Tricare beneficiaries pay for pharmaceuticals purchased at their local drugstores.
Former defense secretary Robert M. Gates proposed raising Tricare Prime enrollment fees for single retirees from $230 a year to $260 a year and fees for retiree families from $460 a year to $520 a year. Coburn wants the fees to be much higher and more in line with private-sector health plans.
Part of his concern is fairness, first for uninjured veterans who, for example, served in Iraq and/or Afghanistan but “leave the military without serving 20 years [and] are not entitled to any of these health-care benefits.” They represent some 70 percent of those serving, according to Pentagon officials.
Another comparison he makes is to other federal government workers whose plans are not as cheap. A medical doctor, Coburn told reporters last Monday: “Nobody in the country, as a single person working 20 years for the government, should be able to get health care for $250 a year. Nobody was ever promised that, and nobody should be able to do that.”
Instead, he wants to increase the enrollment fee for single retirees to “approximately $2,000 per year and $3,500 for a family.” At the same time he would limit out-of-pocket expenses at $7,500 for those retirees with families. He thinks these changes could save $11.5 billion a year.
His Tricare for life would require retirees to pay up to $550 for half the initial cost not covered by Medicare and then up to $3,025, after which all costs would be paid by Tricare. This change could save $4.3 billion a year.
Coburn wants to reduce the $8 billion annual government share of the cost of drugs that Tricare beneficiaries purchase from their local private retail pharmacies rather than buying them at lower cost by mail order or at military base facilities. Where the price is now $3 for a 30-day supply of a generic drug and $9 for a brand-name from private pharmacies, Coburn would raise that to$15 for generic and $25 for brand names and save some $2.6 billion a year.
Coburn told reporters he has no doubt about the reaction to his Tricare ideas.
“There’s no question,” he said, “. . . retired military, they won’t like what I’ve done. But the fact is is nobody’s going to like what we’ve done, because everybody gets a pinch — everybody. ”
Beyond health care, Coburn has several other proposals that will rattle the Pentagon. He wants to eliminate most of the $1.3 billion-a-year subsidy that supports the Defense Commissary system of 252 grocery stores on military bases worldwide. Prices at commissaries are much lower than at civilian supermarkets; they are listed at cost plus a 5 percent surcharge. That money goes to offset costs of new commissaries or to repair and maintain old ones. It does not pay for salaries and benefits of the roughly 18,000 people who work at the commissaries.
Coburn supports a Congressional Budget Office proposal that would reduce the taxpayer subsidy over five years and see a gradual raise in prices so commissaries could become self-sufficient. The increase in cost, according to the CBO, would amount to $400 per service family per year and save the government about $900 million annually.
He also wants to close down the Congressionally Directed Medical Research Program, which for more than 20 years has added around $200 million a year primarily for breast, lung and prostate cancer projects that have to be managed primarily by contractors. Coburn’s option is to “transfer funding for cancer research that affects the general population back to [the National Institutes of Health] and reduce the administrative costs of administering this research for savings.”
By: Walter Pincus, The Washington Post, July 24, 2011
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