Riddle Me This

by Dave Schuler on April 8, 2014

Episodes of this kind

The Obama administration announced Monday that planned cuts to Medicare Advantage would not go through as anticipated amid election-year opposition from congressional Democrats.

The cuts would have reduced benefits that seniors receive from health plans in the program, which is intended as an alternative to Medicare.

Under cuts planned by the administration, insurers offering the plans were to see their federal payments reduced by 1.9 percent, which likely would have necessitated cuts for customers.

Instead, the administration said the federal payments to insurers will increase next year by .40 percent.

The healthcare law included $200 billion in cuts to Medicare Advantage over 10 years, in part to pay for ObamaCare.

The Centers for Medicaid and Medicare Services (CMS) on Monday said changes in the healthcare market meant it did not need to make those cuts to Medicare Advantage this year.

It cited an increase in healthy beneficiaries under Medicare, which it said has lowered projected costs for that program.

should cast real doubt on our ability to reduce the rate of increase of healthcare spending within the constraints of the current system. A shorter version of the plan is “don’t cut the benefits, just lower the projected costs”. This returns to the time inconsistency problem I mentioned yesterday.

Such a process also makes a number of assumptions, each of which should concern us. Broad discretionary executive power assumes that every conceivable future executive will agree with you. Future legislators will have motivations different than those of the present incumbents. It will be easier to make cuts in the future than it is now.

Another way of looking at the events described in the quoted passage is that healthier insureds than anticipated mean that fewer people will be hurt by benefit cuts than might otherwise be the case so it’s the perfect time to cut them.

Of course treating CMS’s explanation as substantive makes assumptions, too. It assumes, for example, that they weren’t just looking for a plausible pretext to avoid making the cuts. It also assumes that the pretext is plausible.

{ 6 comments… read them below or add one }

... April 8, 2014 at 9:03 am

But the important thing is that everyone has been promised everything.

... April 8, 2014 at 9:04 am

I mean, except for the prospect of jobs, the ability to influence one’s future, and that kind of trivial thing. But is malingerers don’t care about that.

jan April 8, 2014 at 2:18 pm

Basically, this administration is making it up as it goes along. It’s all about political advantage as it reflects on the next election, having little or nothing to do with long term solution-oriented governance. It’s similar to having a creative writing course, as being the tone of those who lead.

Andy April 8, 2014 at 5:45 pm

Not surprising at all. So much for those CBO estimates that the ACA would reduce the deficit that proponents used to cite at every opportunity. We don’t hear that argument anymore.

steve April 8, 2014 at 6:17 pm

MA has been a continuing waste of money. It costs more than standard FFS, and studies show (there was just recently another) that the extra services it provides are not well valued (roughly 15 cents on the dollar). It needs to be cut. If we cannot cut even this par tof Medicare, the easy part, we are in trouble.

For those who did not read the article, this was a bipartisan effort.

Steve

Guarneri April 8, 2014 at 7:47 pm

“don’t cut the benefits, just lower the projected costs”.

You can make almost anything look good on paper, and/or without context. In politics, a comatose press helps. Phony employment numbers. Phony inflation numbers………………and hence phony GDP growth numbers………….and hence leverage numbers. Phony Obamacare sign up numbers.

I take steve’s point at face value “a waste……if you can’t cut this….” The essential argument for a government program only as a last resort, not “oh, hell, its no damned good, but we’ll just fix’r as we go…”

Leave a Comment

Previous post:

Next post: