December 11, 2009 6:04 PM

Report: Senate Bill's Medicare Savings May be "Unrealistic"

By
Stephanie Condon
Topics
Health Care
(AP)
A new government report shows that the Senate's health care bill would very slightly raise national health care spending over 10 years and that Democrats' plans to achieve savings from Medicare "may be unrealistic."

The actuary for the Centers for Medicare and Medicaid Services (CMS), part of the Department of Health and Human Services, said in its report (PDF) that spending from 2010 through 2019 would increase by 0.7 percent, primarily because of the "greater utilization of health care service by individuals becoming newly covered."

An additional 33 million would be insured under the bill, the report said.

Republicans jumped on the news to further their argument against the bill, the Associated Press reports.

"This report confirms what we've long known," Senate Republican Leader Mitch McConnell of Kentucky said. "The Democrat plan will increase costs, raise premiums, and slash Medicare. That's not reform. This analysis speaks for itself. This bill is a sham."

The report also said the Democrats' plan to cut $493 billion in waste from Medicare relies on some proposals that "may be unrealistic." While the proposed payment cuts "would provide a strong incentive for providers to maximize efficiency, it is doubtful that many could improve their own productivity to the degree achieved by the economy at large," the report says. Over time, it says, providers may not find it profitable to offer a "substantive portion" of their business to Medicare enrollees.

Moreover, the tax on high-premium health benefits, which is adamantly opposed by unions, would prompt many employers, according to the report, to "reduce the scope of their health benefits" while only reducing national health expenditures by 0.3 percent, the liberal blog FireDogLake reports.

The new report covers the legislation introduced on the Senate floor by Sen. Majority Leader Harry Reid, but it would not be affected much by the proposed changes to the bill Democrats are currently discussing, the AP reports.

Democrats found the positive parts of the report. For instance, Sen. Max Baucus (D-Mont.) noted in a statement that the report says the bill will "reduce premiums and cost-sharing for Medicare beneficiaries by nearly $500 per couple annually."

"There is a lot of great news in the report released today by the CMS actuary," he said.

Democrats previously trumpeted an earlier report, from the nonpartisan Congressional Budget Office, that estimated the Senate bill would, on average, lower people's premiums.

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