Cold, Hard Realities Behind Medicare Cuts

Posted in the Minneapolis Forum

Bob Schmahl

Saint Paul, MN

#1 Dec 3, 2012
Democrats have said they can cut Medicare spending without touching seniors’ benefits. But here’s the reality: They can’t get several hundred billion dollars out of Medicare without at least some beneficiaries taking a hit.

And that could be a big problem if the framework for a fiscal cliff deal calls for $400 billion in entitlement savings — most of which would be likely to come from Medicare.

Republicans insist that entitlements should be part of a deal because they’re the largest drivers of the nation’s debt. But Democrats insist they won’t agree to any Medicare savings that would trim benefits — and that’s exactly what would happen with some of the biggest savings options that have circulated in recent years.

POLITICO has reported that $400 billion in entitlement savings is likely to be the floor in an eventual deal and that the Medicare cuts are likely to be a combination of raising the eligibility age, means testing and “efficiencies.”

But if President Barack Obama and Congress do agree to phase in a higher eligibility age — which, technically, wouldn’t touch “benefits”— many of those near-retirees would have to pay more for their health coverage. And if health care providers get hit with another round of cuts — the other big potential source of savings — in addition to the ones already on the way in the health care law, they’re warning that some of them won’t survive.

(Also on POLITICO: Providers: Doctors face 'worse' fiscal cliff)

Here are some of the biggest cost-saving options:

Increase the Medicare eligibility age from 65 to 67:$148 billion

Most Democrats on Capitol Hill have lined up against the idea, arguing that doing so would leave 66- and 67-year-olds without access to affordable coverage. Plus, the 66- and 67-year-olds aren’t the ones sinking the Medicare trust fund; they’re typically the cheapest beneficiaries.

But they likely would become the costliest in the private insurance market, which could make coverage hard to find if they don’t already have it through the workplace — and they’d probably have to pay more out of pocket than they would under Medicare.

“Many of the people who would otherwise have enrolled in Medicare would face higher premiums for health insurance, higher out-of-pocket costs for health care, or both,” the Congressional Budget Office wrote in a January analysis of the idea.

An ABC News/Washington Post poll released Wednesday shows that 67 percent of people surveyed oppose the idea, too

Read more: http://www.politico.com/story/2012/12/medicar...

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