I trust the actual actuary for these funds-<quoted text>
As usual, the Republican claim begins with a real fact. The Affordable Care Act really does reduce Medicare spending by more than $700 billion over the next ten years. And while some of those cuts represent efforts to reduce overpayments to private insurers in the Medicare Advantage program, some of those cuts represent reductions in what hospitals will make for taking care of Medicare patients.
An independent analysis of the Affordable Care Act suggested that some hospitals might not be able to adapt these reductions—and that, as a result, 15 percent would become unprofitable. If that happens, they might stop seeing as many Medicare patients, forcing seniors to wait longer for care. Or Congress might decide to ease up on the cuts, cause the law's total cost to rise.
The analysis comes from Richard Foster, Medicare’s chief actuary. He is smart and honest, so you should take what he says seriously. But plenty of smart and honest analysts take a different view.
They point out that the Affordable Care Act doesn’t simply make crude, across-the-board payment reductions—as, say, the Balanced Budget Act of 1997 did. Instead, Obamacare also introduces incentives designed to reward efficiency. In addition, the Affordable Care Act’s expansion of coverage—remember, it will mean 30 million additional Americans have insurance—should reduce the number of uninsured people showing up at the emergency room, easing the charity care burden on hospitals.
Keep in mind that the hospital industry endorsed the Affordable Care Act. If it had thought the cuts were too steep, rest assured, it would have howled. And the hospitals may already be adapting, if early indications are correct.
CMS Actuary Simulations Indicate Trouble for Hospitals
In a report Friday, Rick Foster, chief actuary for the Centers for Medicare and Medicaid Services, questioned the sustainability of many of the proposed cuts, the major source of funding in a plan to extend insurance to more than 30 million additional Americans.
The proposal to reduce payments to hospitals and other providers, to force them to adopt more efficient practices, could prove particularly problematic for institutions that serve large numbers of Medicare patients, Foster wrote. He warned that many institutions might drop Medicare,“possibly jeopardizing access to care for beneficiaries.”