July 29, 2014

Posts on medicare

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Saturday, June 28, 2014 - 9:58 AM

Short-term improvements in the federal government’s finances have led to widespread complacency in Washington about fiscal reform.

But a panel discussion this week highlighted the continuing need for such reform, with former members of Congress lamenting the sharp political divisions within the two major parties as well as between them that hinder constructive change.

“We have a fiscal challenge which is really a political challenge which really is a societal challenge. . . .the two parties are more polarized than ever before,” said Evan Bayh, a former senator (D-Ind.). “The Democratic Party has moved further left, the Republican Party has moved even further right.”

Mike Castle, a former congressman (R-Del.), sounded a similar theme, noting the pressures faced by moderates in both parties. “The Congress of the United States today,” he said, “is a difficult place.”

The panel discussion took place in Washington on Wednesday night, when The Concord Coalition honored Senators Dick Durbin and Tom Coburn with the 2014 Paul E. Tsongas Economic Patriot Award.

Joining Bayh and Castle for the panel discussion were former senator Judd Gregg (R-N.H.), former House member John Tanner (D-Tenn.) and Concord Coalition Executive Director Robert L. Bixby.

Castle and Tanner are Concord’s co-...

Tuesday, June 24, 2014 - 10:00 AM

Following last year’s bipartisan budget agreement, this was supposed to be the year of a harmless fiscal ceasefire on Capitol Hill. Unfortunately, the ceasefire is becoming a retreat for fiscal responsibility.

On issues ranging from tax and entitlement reform to highways and veterans health, Congress has backtracked, ducked and gimmicked its way around hard choices. This pattern does not bode well for any attempt to put the budget on a sustainable track after the fall elections.

Backing away from military retirement reforms. The first sound of retreat came in February with overwhelming votes in the House and Senate to repeal a provision included as part of their budget agreement just a month earlier that limited cost-of-living adjustments for working-age military retirees.

The minor change supported by the Pentagon would not have saved a huge amount of money (roughly $7 billion over 10 years) but represented the type of difficult choice necessary to reduce defense spending. However, in the face of complaints from veterans groups, Congress quickly backed down. To save face, lawmakers replaced the savings on paper with unspecified automatic cuts 10 years from now, but it was still a clear case of kicking the can down the road.

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Monday, May 5, 2014 - 4:00 PM

A book titled “Dead Men Ruling” is not the place you would expect to find an optimistic message about our nation’s future. That is the case, however, with a new book from budget expert Eugene Steuerle of the Urban Institute. The critical connection he draws between renewed fiscal freedom and generational fairness casts the budget debate in a far more important context than deficit reduction for its own sake. This larger theme is one that The Concord Coalition has long embraced.

Despite the dismal fiscal outlook, which portends rising deficits and debt in perpetuity, Steuerle argues that “we no more live in an age of austerity than did Americans at the turn of the twentieth century.... Conditions are ripe to advance opportunity in ways never before possible, including doing for the young in this century what the twentieth did for senior citizens, yet without abandoning those earlier gains.”

The key to realizing these opportunities, he says, is “breaking the political logjam that…was created largely by now dead (and retired) men.”

As Steuerle puts it, “both parties have conspired to create and expand a series of public programs that automatically grow so fast...

Tuesday, April 8, 2014 - 9:39 PM

Yesterday, the Centers for Medicare and Medicaid Services (CMS) released the 2015 government payment levels for the Medicare Advantage private insurance plans that are offered to seniors as an alternative to traditional Fee-for-Service (FFS) Medicare. In a bit of a surprise, CMS projects that total payments will increase by about 0.4 percent despite earlier CMS guidance suggesting payments would be cut by 1.9 percent.

The change follows months of lobbying by the private insurance industry -- fearful of lost profits -- along with members of Congress from both parties who are fearful of being attacked for cutting benefits to seniors.

Medicare Advantage plans have seen annual cuts to their payments from the government through a process set in motion by the Affordable Care Act (ACA), and cuts are scheduled to continue (despite the slight increase for next year). The payment reductions were intended to fix a fundamental financing disparity between FFS Medicare and the Medicare Advantage program; insurers are paid more per beneficiary than it would cost the government if the beneficiaries remained in FFS. 

The negative reaction from politicians and interest groups to these continual cuts...

Wednesday, March 26, 2014 - 10:34 AM

The growth in health care spending has slowed in recent years but could speed up again as the economy strengthens and the population ages. Even with slower growth rates, however, federal and state governments need to pursue reforms and innovations to keep public health programs sustainable.

Massachusetts and Maryland are at the forefront of such efforts. Officials in other states and the nation’s capital should watch how the experiments in these two states turn out and consider what lessons they may hold.

Maryland regulators recently received approval from the Center for Medicare and Medicaid Services (CMS) to limit the growth in hospital spending for each of the next five years to 3.58 percent. That is the state’s average annual rate of per capita economic growth since 2002.

Maryland already has successful experience restraining growth in health care spending relative to other states because of a unique commission that...

Monday, February 24, 2014 - 3:52 PM

As we await the full release of the President’s Fiscal Year 2015 Budget, some important specifics have been slowly made public. It looks like this budget, as is usually the case, will contain a mixture of sensible reforms and politically expedient omissions.

The first bit of news is that this year’s budget will not contain a proposal -- included last year -- to switch the government-wide formula for measuring inflation to a more accurate index called the “Chained CPI.” 

Switching would save money in numerous spending programs, including Social Security, that provide cost-of-living increases. That’s because the government’s current formula, according to most economists, overstates inflation. The Chained CPI addresses this problem while ensuring that the value of federal benefits still keep up with citizens’ purchasing power.

Because tax brackets are indexed to inflation, switching to the Chained CPI would also increase revenue.

The President’s budget does not have the force of law and does not normally form the basis for the congressional budget resolution. It is a stylized world in which the administration proffers a multi-faceted policy course and projects where that would lead the nation fiscally.

In that world last year, the administration rightly identified that the country has a...

Tuesday, November 26, 2013 - 10:57 AM

A recent report by the President’s Council of Economic Advisors (CEA) reviewing the recent slowdown in health care costs examined its potential causes, its sustainability and the economic impact going forward.

While the report is intended to put the administration's efforts on health care reform in the best light, that shouldn’t diminish the importance of the slowdown and the lessons we can learn from it. When looking at future fiscal policy decisions, some crucial takeaways are:

  • Changes in government policy can, at the very least, contribute to lowering health care cost growth.
  • Unlike five or six years ago, health care experts are now fairly confident they have identified some strategies to build upon and there is an emerging political consensus for encouraging their implementation.
  • The slowdown presents a unique opportunity to expand reform efforts, and is not a moment for complacency or resting on laurels.

The CEA report highlights the cost slowdown by examining how per-capita spending from 2010 to 2012 saw the lowest growth rate for a three-year...

Monday, May 20, 2013 - 10:07 AM

This is post three of a three-part series on the developing consensus for the next steps on health care reform. Part One is here. Part Two is here.

Ultimately, for any health care reform plan to be credible and passable through Congress, it must have a meaningful and enforced target for long-term cost growth. In this final post of my three-part series (Part 1, Part 2), I look at the recent health care plans from the Bipartisan Policy Center, Simpson and Bowles, the Engleberg Center at Brookings, and the...

Tuesday, May 7, 2013 - 7:57 AM

This is post one of a three-part series on the developing consensus for the next steps on health care reform. Part 2 is here. Part 3 is here.

Recently, I discussed how the new health care reform plan from the Bipartisan Policy Center’s (BPC) Health Care Cost Initiative mirrors the core values of nearly every major deficit reduction plan -- a reduction in spending on the federal budget’s health care programs and an increase in revenues from limiting tax expenditures. I argued that if the absence of political will to pursue a “grand bargain” among a majority of members of Congress continues, perhaps the BPC plan could become an alternative “smaller bargain” that would go a long way towards attacking the nation’s long-term fiscal challenge.

In a series of three blog posts, I will look more closely at how the BPC report, along with a few other high-...

Wednesday, April 24, 2013 - 1:52 PM

Last Thursday, the Bipartisan Policy Center’s (BPC) Health Care Cost Containment Initiative released a comprehensive plan to increase efficiency and reduce costs while reorienting the nation’s health care system to become more patient-centered. That combination would ideally lead not only to a more sustainable fiscal future but to better health care as well.

The plan targets the largest health care levers that federal policymakers have: Medicare and the tax code -- specifically the exclusion of employer-provided health care from taxation. The plan, as scored by health policy experts, would reduce budget deficits over the next 10 years and then continue to lower the trajectory of the federal debt.

Medicare would be transformed into a system that rewards value and coordination instead of the quantity of services, and the tax code would no longer encourage overspending on health care. Furthermore, these changes at the federal level are meant to encourage and incent a more rational private health care system.

These lofty goals were heralded by BPC’s health care leaders: former Senators Tom Daschle, Bill Frist and Pete Domenici, along with Dr. Alice Rivlin. Their agreement after a year of...