Congress’ Medicare ‘Fix’ Could Leave Seniors Paying More
By David Dayen, The Fiscal Times
March 20, 2015
Washington perpetually laments the loss of bipartisanship in this polarized political environment. But ordinary Americans might want to fear one example of bipartisanship’s return, and what it could mean for their pocketbooks.
John Boehner and Nancy Pelosi have been locked in negotiations to clear two of the biggest hurdles facing Congress this year: the so-called “doc fix” for Medicare reimbursement rates, and an extension of the Children’s Health Insurance Program (CHIP). We don’t have all the details, because the negotiations have taken place far from the public eye, with the release of the House and Senate budgets this week affording them cover.
The “doc fix” refers to the rate the government pays doctors who see Medicare patients. A 1997 law created something called the “sustainable growth rate” or SGR that governs the level of payments. Since Medicare spending consistently outstrips economic growth, this translates into large reimbursement cuts under the SGR formula. If nothing is done by April 1, the reimbursement rate will fall by 21 percent. More important, doctors claim they would react to pay cuts by prioritizing other patients, making it harder for Medicare beneficiaries to get treatment.
This 21 percent cut should always be accompanied by the phrase “in theory,” because every potentially large rate cut since 2002 has been patched; hence the phrase “doc fix.” On 17 different occasions, Congress has made sure Medicare doctors get their expected paycheck, sometimes even adding a small raise, and often finding money somewhere else in the budget to offset it.
Congress appears to want to stop having conversations with angry doctors every year, and have cast about for a permanent “doc fix” that would repeal and replace the old Medicare payment system. Doing this would cost $177 billion over the next decade, but the Boehner-Pelosi negotiations are looking at covering less than half this, around $70 billion in back-ended cuts, and letting the rest add to the budget deficits. To sweeten the pot for liberals, the emerging package would include a two-year, $30 billion extension of CHIP for 8 million children, at the boosted benefit levels under the Affordable Care Act. The tentative plan is for the House to vote next week, and throw it into the Senate’s lap just before the April 1 doc fix deadline.
It’s the other half of the cuts that get problematic. There would reportedly be more means-testing for Medicare beneficiaries, increasing premiums for seniors showing income over $133,000 and couples over $266,000. These seniors would have to pay 65 percent of their total costs under the new plan. This would go up at higher incomes. Means-testing historically dips lower and lower as budgeters try to get more out of beneficiaries, so this continues that ratcheting process for Medicare.
But this would raise out-of-pocket expenses on all 9 million seniors with a Medigap plan, including the 86 percent of these beneficiaries who have incomes under $40,000, and almost half with incomes below $20,000. So this cut hits those who can’t really afford it. (This idea, along with the means-testing, was in President Obama’s budget, incidentally.)
The proper term for this is cost-shifting, pushing funding for a public program onto those who get the benefits. Medigap was created to deal with cost-shifting in Medicare, and now Congress may look to shift costs within it as well. And like means-testing, cost-shifting is prime terrain for double-dipping over time.
All of this is being done to protect doctor salaries, which are among the highest in the industrialized world. Maybe Medicare doctors shouldn’t endure a 20 percent pay cut, but the idea that they wouldn’t see patients if the cut were 5 or 7 percent doesn’t pencil out. Plus, doctor payment rates are tied to Medicare premiums, as the Congressional Budget Office has explained: “Beneficiaries enrolled in Part B of Medicare pay premiums that offset about 25 percent of the costs of those benefits.” This means that any permanent change to a new doctor payment formula will likely result in a hike to Part B premiums.
Clearly everyone in Congress hates the messy process of annual “doc fix” patches, and the uproar from the hospital lobby that accompanies it. But nobody in Washington has raised the point that higher costs for ordinary patients might not be a great solution to the supposed problem of lower cash flow for doctors.
U.S. Voter Turnout is Low Because There’s Little to Vote For
by Glen Ford, Black Agenda Report
President Obama wants you to believe that the political map of the United States would be transformed – “completely changed,” he says – if citizens were required by law to vote. Obama told a town hall meeting in Cleveland that mandatory voting would “counteract” the influence of money in the U.S. electoral process. That’s a hell of a statement from the guy who wrecked the public campaign finance system by opting out of it in 2008, and outspent his Republican opponents in both of his runs for the presidency. Obama ought to have his picture on a million dollar bill.
But, why does the United States have the lowest voter turnout in the industrialized world, including Russia? It’s not because Americans are happier with the way they’re living than the rest of humanity. The U.S. ranks 17th on the global Happiness index and 23rd on the Satisfaction with Life scale. And, although racial exclusion in voting is very important when comparing Black voter turnout with whites, white Americans also vote in numbers far below almost all of the rest of the developed world.
Americans don’t vote because both major political parties are answerable to the same people: the moneyed classes, the power structures that determine the issues that will be on the political agenda long before the party primaries begin. This is called the hegemony of the bourgeoisie, the rule of the rich.
The corporations and bankers choose the menu; the only option citizens have is whether to select from the pre-packaged list of candidates, or stay home. Almost two out of three chose not to vote in 2014. They were not behaving irrationally. Since both major parties are controlled by the rich, only the most minor tinkering with the way the country is actually run, is tolerated. No matter how many people vote, very little changes, because the U.S. offers the narrowest spectrum of electoral choices in the industrial world – which is why it has the lowest voter turnout.
The Democrats want to keep their lock on the Black vote, but they have no interest in Black people voting their own political agenda, for the simple reason that Blacks are the most left-wing constituency in the country and must, therefore, be kept in check by the Democratic Party machinery. It is the Democrats who have for decades sought to break up concentrations of Black voters, spreading them out across a number of districts. This gives the Democratic Party a better chance to win seats in more districts, but it means that only those Black candidates that can appeal to a substantial segment of white voters can win election. The Black political conversation is left in a state of arrested development. Ultimately, even the Black political landscape turns into a desert, and rational Black people choose not to vote.
What’s so hard to understand about why Congressional approval, indeed our satisfaction with all elected officials from President to Dog Catcher, is in the toilet?
It’s because they toady to the wealthy and not to the voters.