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.

Stephanie Condon
Stephanie Condon is a political reporter for CBSNews.com.
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by Mysoft101 March 14, 2011 1:38 AM EDT: Ah yes, worked really hard. Somehow "workin' really hard" seems to jell with our primal ideas about hunting and gathering. Only through some idea of stress and strain do we dole out extra portions.
Truth is you can be hugely successful, get a restful nice sleep each night and have a very comfortable time of it.
http://vfrankz.blogspot.com; Reply to this comment


by JackChoice August 11, 2010 11:51 AM EDT: another good website for seniors to learn about medicare and medicare supplements is www.americanseniors.com; Reply to this comment


by JackChoice August 11, 2010 11:49 AM EDT: Medicare cost continues to go up, the part a and part b medicare deductibles went up again this year, and the amount they charge for part B just went up as well, I was forced to shop around for a new medicare supplement insurance plan f as my old one kept going up to, I found a new one online via http://nationalmedicaresupplements.com/ It is a great resource for seniors.; Reply to this comment


by justdatrooth December 14, 2009 10:14 AM EST: Everything Obamie has said and "done" (after all he hasn't really done much other than extreme deficit spending) has been unrealistic!!; Reply to this comment

by reveal4 December 12, 2009 8:53 PM EST

jschmid...I support reform...However, I empathise with seniors who worry that their doctors, or clinic, or hospital may have such an influx of new patients that they may cut back on lower paid Medicare patients. We need more doctors. We simply need more doctors, if reform passes. We need more doctors training, we need more nurses, we need more healthcare professionals. Seems reasonable to think reform will bring more professionals from foreign countries and more training of medical professionals in America.

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by jschmidt27 December 12, 2009 10:12 PM EST: Don't think there is anything in the bill about training more doctors or nurses even though we desperately need them. Just a $500million cut to medicare which I don't think is wise. Our medicare system now will exceed medicare tax revenues. Few of our hospitals are fiscally sound and that is talked about is cuts. So I think the end result will be more taxes for less services. I don't think this has been well thought out. As usual some special interest are catered to and others ignored. Congress needs to figure what's better for the people. Unfortunately the Congress has no credibility with the people. We have ethics challenged commitee chairs on the Dems that shouldn;t have these jobs. Pelosi squeaky clean Congress is a failure on ethics. Under Republican control, these ethics charges would be denounced by the media. But the MSM lets ethics challenged chairs off the hook.


by reveal4 December 12, 2009 8:45 PM EST: The Reuters story says that cost growth would be decreased, but more than made up by higher health expenditures resulting from coverage expansion...To me that says, Less medical cost inflation, but more people putting money into the system.Max Baucus says the report shows that Americans will spend less on healthcare than they would if reform does not pass. The tough part of the report says that supply may not meet demand, at first, due to the number of newly insured. The report also says some doctors may raise prices. Also, some hospitals, doctors, and clinics might cut back on Medicare patients or end their participation with Medicare, in my words. There is another article I found today that says some doctors are giving a preferred status to patients who pay a yearly fee of around $1300.00. So, reform will save money, on average, for consumers. Some doctors may cut back on Medicare patients...Some hospitals may cut back on Medicare patients or end participation in Medicare and other lower cost reimbursement programs. The thing is, Richard Foster noted that his report had a greater degree of uncertainty than is usually the case with more routine healthcare proposals. http://www.reuters.com/assets/print?aid=USTRE5BA41C20091211; Reply to this comment


by reveal4 December 12, 2009 8:27 PM EST: jschmid...I found the report...I'll check it out.; Reply to this comment

by jschmidt27 December 12, 2009 7:00 PM EST

you can't cut $500 million from medicare and not have service deteriorate. Doctors may stop seeing medicare patients. There is nothing that forces doctors to treat them. With this bill, medicare patients could end up with no doctors to treat them. This bill is not well thought out.

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by gboyd41 December 12, 2009 7:55 PM EST: jschmidt27-that is what will occur. If it puts a physician in the red to see a medicare patient, how long do you think that will last?


by jschmidt27 December 12, 2009 8:10 PM EST: gbod41- I agree with you. But why can't the so called bright bulbs in DC see that. Or do the liberals think doctors should not have to worry about making a living and should treat people out of the kindness of their hearts? I think the Dems and liberals will not be happy until every business, doctor or service is non-profit.

by jschmidt27 December 12, 2009 6:52 PM EST

Reuters take on it- not good

WASHINGTON, Dec 11 (Reuters) - U.S. healthcare spending would rise by about $234 billion over the next decade under the Senate Democrats' overhaul bill and some of the proposed savings might never be achieved, a U.S. agency said in a report released on Friday.

"The report shows that health reform will ensure both the federal government and the American people spend less on health care than if this bill doesn't pass, helping get a hold of America's debt and keep more money in people's pockets," said Senate Finance Committee Chairman Max Baucus, who helped write the legislation.

The report, written by Richard Foster, the chief actuary at the Centers for Medicare and Medicaid Services, said the increase in healthcare spending reflected the impact of millions of newly covered people seeking medical care.

"Although several provisions would help to reduce healthcare cost growth, their impact would be more than offset through 2019 by the higher health expenditures resulting from the coverage expansions," the report said.

Foster acknowledged his analysis of the sweeping reform had a "greater degree of uncertainty than is usually the case with more routine health care proposals."

SOME COST-SAVING PROPOSALS 'MAY BE UNREALISTIC'

The healthcare revamp seeks to rein in soaring costs and provide medical coverage to millions of uninsured people. The report said about 57 million people would be without health insurance in 2019 under current laws. The number would be reduced by 24 million if the Senate bill is enacted, it said.

The report, similar to one issued by the agency on the healthcare bill passed by the House of Representatives in November, went on to say the added demand for health services at first may be difficult to meet and could lead to price increases and a reluctance by providers to treat patients with low-reimbursement health coverage.

Medicare has significantly lower reimbursement rates than private insurers. Doctors, clinics and hospitals that rely heavily on Medicare patients for business "could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the program," the report said.

Congress would probably find that politically unacceptable and the report concluded some of the Medicare cost saving proposals "may be unrealistic."

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by reveal4 December 12, 2009 8:14 PM EST: jschmid...You cite a deleterious Reuters story of December 11 regarding healthcare reform...The thing is...I checked Reuters for December 11 for about 15 multi story pages, and did not come up with this article...Your history of opposition to reform is clear. Your tales of socialised medicine and scare tactics are clear. Perhaps you can actually substantiate your post and add a link to an actual story with the actual information you say actually came from Reuters...You might be posting from some other place that says Reuters has such an article. As you seem to post word for word, it should be no problem to give a link...


by reveal4 December 12, 2009 8:21 PM EST: jschmid...Here's a good article on CBS that says reform would lower people's premiums, on average.. http://www.cbsnews.com/blogs/2009/11/30/politics/politicalhotsheet/entry5839982.shtml?tag=contentMain;contentBody


by luadda22 December 12, 2009 4:58 PM EST: From the Boston Globe January 2007, "THE TRUSTEES of the nation's Medicare trust funds have just released their 2007 annual report, and once again the news is grave. The hospital insurance trust fund is projected to be exhausted by 2019".

So lets see, cut $500 billion from Medicare and cover 33 million new people. It shoud be broke by 2012. What are these thiefs thinking? But again when you have a nation of moochers, what do you expect.; Reply to this comment