Centers for Medicare & Medicaid Services: House Bill could reduce services for seniors

The chief actuary for the Centers for Medicare & Medicaid Services has delivered his scoring of HR 3962 to members of Congress and the news isn’t good. Not only does it look like the bill will wind up costing more than projected by the CBO, the pledge that the bill will not reduce services to Medicare recipients will be difficult, if not impossible, to keep.

Some of you may remember Rick Foster from the fiasco surrounding George Bush’s Medicare Prescription Drug Plan. Foster’s cost estimates for the plan were more than $200 billion higher than the CBO’s.

Last Thursday when I read that the report for HR 3962 would not be finished by Saturday’s vote I feared we were headed for trouble. Actually, I was a bit stunned that House leaders weren't waiting to hear from Medicare's chief actuary when their bill introduced major changes for Medicare and Medicaid.

The report is much easier to read than the one released by the CBO. I found some of the best analysis of it at The Washington Post.

A plan to slash more than $500 billion from future Medicare spending -- one of the biggest sources of funding for President Obama's proposed overhaul of the nation's health-care system -- would sharply reduce benefits for some senior citizens and could jeopardize access to care for millions of others, according to a government evaluation released Saturday.

If the government intervenes to prevent these reductions in and losses of health services for seniors, there would be a substantial reduction in actual savings as projected by House leadership.

The report also questions whether current healthcare infrastructure is capable of handling the immediate increase of those seeking benefits.

The additional demand for health services could be difficult to meet initially with existing health provider resources and could lead to price increases, cost-shifting, changes in providers’ willingness to treat patients with low-reimbursement health coverage.

The President continues to say that there will be no reduction in guaranteed Medicare benefits for seniors. What he isn't saying is these benefits may cost more for many seniors and health services may be more difficult to find due to a lack of participating providers.


Re Kissell watch (James 11/12) and the ensuing comments

Go back to that post and the comments -- and then all you folks who were ready to run Larry Kissell out of the district and state on a rail after being tarred and feathered, start apologizing. It seems he had read the bill and correctly analyzed what he read (after all, he does have an economics degree from Wake Forest).

Thanks, Betsy, for keeping us informed with accurate information and the back up links to research it our lazy selves. You do great work.

Sweet Union Dem

Kissell may have had other reasons as well

One thing liberal democrats and I am sure progressive types as well are overwhelmingly in favor of a woman having the right to choose matters concerning her own body up to and including abortion. To me it was a total cop out by those people when they voted for HR 3962 with provisions that will not allow insurance provided by the federal government to cover abortions. I think (as has been implied here) that some people should rethink their opinion of Kissell on this matter.

On a side note, I have been away from any information source concerning politics for a bit and have just found out that the RNC employee's insurance plan COVERS abortions. Here is the link in case anyone else didn't hear about this. Talk about hypocritical !!!!!

Proof that Stupak is horrible idea

The RNC situation is proof that the Stupak amendment is a horrible idea.

The RNC covered abortions for their employees b/c they did not opt out back in '91. They have now removed that coverage, in a decision made by them as an employer. However, why should every other employer in the country be forced to make the same decision that the RNC has made? Why should coverage for a legal procedure be taken away from every one who wants that coverage or whose employer wants that coverage?

The Stupak amendment would make it so that no insurance bought in the exchange could include abortion coverage. Because of things like the employer and individual mandates, that means that abortion will be effectively removed from all insurance companies, regardless of what "Bart" says.

"Keep the Faith"


So what are the options if folks want reform but don't like where the money is coming from?

They can vote for a bill which is not deficit neutral. I would do this, but I doubt a majority in Congress would.
They can vote for a larger tax increase on the super rich, again I would do this, but would Congress?
They could vote for taxes on health care benefits like the Senate Finance committee wants, something that I think is a horrible idea, but what does Congress think?

Or we could really increase the amount of oversight on Medicare and Medicaid. A report says that this year Medicare has paid out $47 billion dollars in suspect claims. Drop that to zero and that is the entire cost savings expected from both Medicare and Medicaid.

Thought everyone would also like to see Nancy-Ann DeParle's response to this report. She is the White House's lead on Health Care policy, but during the Clinton Administration she was in charge of what is now the CM&MS.

"Keep the Faith"

I have no problem with that

But the leadership upped those levels trying to get votes from moderates, so if they lower them back down will it pick up more than it loses?

"Keep the Faith"

Not good enough.

The strongest argument presented in this analysis is that expanding coverage to most of those who presently can't afford it COULD adversely impact the availability of some providers to some people who are presently insured. It's noteworthy, however, that the CMS actuary who authored this memo candidly admits that he can't quantify some of the most important effects that he posits as possible--and that he didn't even try.

This is a credible argument against reform? This is supposed to strengthen the justification of conservative Democrats (like Larry Kissell) who opposed reform?

Sorry. On the merits, this adds up to little more than an unproven fear that "helping these needy people get health care MIGHT reduce the number of doctors available to see me". As a political analysis, it will have an impact. As a moral argument, it stinks.

Dan Besse

Thanks Dan...

I agree. (Helping reduce carbon also costs money...but it wouldn't be enough to justify a no vote on the energy bill.) Kissell's reasons don't end up holding water...on either energy or health care. It's hard enough to get an appt to see a physician now. And a trip to the emergency room will (here) result in at least a four hour wait. These problems already exist... This is fear mongering and nothing more. I think a similar position might be taken that if people now without care get care then the longer term effect would be to decrease overall demand.

I'm going to go to another fact regarding cost. We're spending $Billions in Iraq and Afghanistan. Even worse we're killing our loved ones and scores of others... But, money-wise, this is money we don't have. Would Kissell rather see us spend money we don't have on our own health care or to continue these fruitless conflicts? I'll look to see if I can find his votes...but we're sure spending the money.

Stan Bozarth

That's my view too.

And, as always, you've articulated it much better than I could have. There are enough weasel words in the analysis to fill a zoo, just as there are in Kissell's defense of his misguided vote.

Wars are rarely

deficit neutral. Quite the opposite I would think. Plus all that 'collateral' damage. Let's not do war no more.



There cannot fail to be more kinds of things, as nature grows further disclosed. - Sir Francis Bacon

You are absolutely right, Dan

Where was the cost analysis before we went to war in Afghanistan and Iraq? Nobody asked if we could afford those wars except those America-hating lefties and pacifists. Where was the cost-bending curve then, Boehner?

Now we hear "a stark warning to every Republican, Democrat and Independent worried about the financial future of this nation" (Republican Dave Camp). This by the very people who cheer-led us into unsustainable, costly wars that produced nothing but death, debt, and despair? These people are telling us that we cannot afford to make sure that all Americans have access to affordable, quality health care in the richest nation on earth because of some highly questionable numbers coming out of a highly questionable study?


Where, in the Washington Post, is the cost analysis that details the cost of lives lost and families ruined? How much is the life of an American worth these days anyway?

Think of health care reform as part of a much needed national security program. We don't need a study to know that any money spent on that front will yield much greater benefits to the ordinary American family than the bombs our drones drop overseas.

PS: Have you ever checked into where the money comes from AFTER a bill gets passed?

Resistance is Fertile

Before jumping to conclusions

Read the article about Medicare fraud in the latest AARP newsletter.

One example. Wheelchairs and motorized wheelchairs. There is a five-fold difference in prices between the lowest cost claim and the highest cost claim. Investigation of providers show that some are just price gouging because they have convinced a senior that their chair is the best (look at the expenses in advertising on daytime TV that these companies have). Getting a wheelchair for $1000 a year lease instead of a $5000 a year lease is not a reduction of services although it definitely a reduction of costs.

And this phenomenon is pervasive in medical equipment and supplies, in Medicare and outside of Medicare.

Also, look at Jon Walker's article on this report HR 3292's Massive Expansion Of Coverage Would Result In Very Small Increase In Health Care Spending.

And what is interesting is that the deficit scolds in Congress are the very ones fighting to keep their pet industries and stakeholders from having to reduce costs.

Finally, see Dan Besse's post above.

I am not convinced that Larry Kissell actually waded through the 1990 pages of the bill himself (few Congressmen do because of competing time pressures), and I am not sure of the quality of advice that his legislative aide on healthcare is giving him.

50 states, 210 media market, 435 Congressional Districts, 3080 counties, 192,480 precincts

Not much news in the CMS analysis

Institutional providers subject to the market basket updates aren't going to drop Medicare.

The real question is will we aggressively institute cost control policies or just find new revenues in the future and continue paying providers to overbuild? I hope some of the ideas like global budgets, making use of comparative effectiveness research, and reforming the health care delivery system are central to reform in the coming years.

None of this has anything to do with Kissell's vote.

Also, the conclusion Betsy quotes is a reference to Medicaid, not Medicare. As the report notes, for areas with especially low Medicaid reimbursement rates there could be access issues. NC has pretty good Medicaid rates, but the goal of reform is clearly to increase all Medicaid rates to Medicare levels.

There is nothing in this report to back up Rep Kissell's NO vote

Absolutely nothing, except a vague threat that somehow providers would stop accepting Medicare, which is ludricuous. Medicare beneficiaries are the vast majority of health care visits in the USA. Almost every hospital and most physicians accept Medicare and will continue to do so according to most public health economists. Now, there are issues with providers accepting Medicare Advantage, a privately run alternative version of Medicare which is SO BAD, that many providers refused to accept it until George W. Bush bribed them with a subsidy in 2003. This bill will actually do away with a lot of this expensive and foolish program.

There are some interesting points made in the CMS report about the budgetary numbers and the effect increasing Medicaid coverage to millions more Americans could have. There are some real issues to be addressed here. However, this report in no way concludes that the health care bill will deny seniors any coverage or defined benefits, as Kissell and the GOP claim.

No one needs to apologize to Rep Kissell. He still has some explaining to do since his rationale for voting NO is still not accurate.

Totally unrelated, of course, is this article from the Huffington Post last week: "Va. Rep. Tom Perriello, On Health Care Vote: 'He Didn't Come To Congress To Get Re-Elected'"