Medicare Actuary pans Obamacare

Surprise, surprise. The Medicare Actuary says that health care nationalization will cost more than projected:

President Barack Obama’s health care overhaul law is getting a mixed verdict in the first comprehensive look by neutral experts: More Americans will be covered, but costs are also going up. . .

But the analysis also found that the law falls short of the president’s twin goal of controlling runaway costs, raising projected spending by about 1 percent over 10 years. That increase could get bigger, since Medicare cuts in the law may be unrealistic and unsustainable, the report warned. . .

In addition to flagging provider cuts as potentially unsustainable, the report projected that reductions in payments to private Medicare Advantage plans would trigger an exodus from the popular alternative. Enrollment would plummet by about 50 percent. Seniors leaving the private plans would still have health insurance under traditional Medicare, but many might face higher out-of-pocket costs. In another flashing yellow light, the report warned that a new voluntary long-term care insurance program created under the law faces “a very serious risk” of insolvency.

So the new law drives health care costs up, even if you assume Medicare reimbursements will be cut, which of course they won’t be. The full report is here. No wonder Democrats wouldn’t wait for the report before passing the bill.

BONUS: Kathleen Sebelius admits that she has no idea what the bill’s high-risk pools will cost.

POSTSCRIPT: The report did say that the bill would extend health coverage to 34 million more people, but as people will discover, coverage is not necessarily the same thing as access. At a talk I attended yesterday, Allan Meltzer pointed out that the bill does nothing to expand the supply of health care. Primary-care physicians are already underpaid, and the bill assumes their pay will be cut further. Thus, expanding coverage merely moves the long lines for treatment out of the emergency room and into the physician’s office where all of us can enjoy them.

UPDATE: In fact, most of the newly insured would be in Medicaid, which many doctors won’t accept because the reimbursement rates are so low.

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