Overview:
Obamacare will be partially funded by cuts to Medicare totaling $416,500,000,000. The gross number is 459,000,000,000. However, there will be a spending increase of 42,500,000,000 for prescription drugs. Many of the cuts are speculative.
- Physician compensation: There was a 25% reduction in fee for service compensation slated to take effect starting 2003. Congress has extended the physicians pay every year since then. Already 1/3rd of physicians do not accept Medicare. Slashing the compensation another 25% would mean most of the remaining doctors would drop the program. Almost half of the anticipated savings from medicare cuts would come from this 25% reduction no Congress has been willing to pass.
- Medicare advantage: $139 billion in savings was expected with wiping out this program. It offered increased benefits through subsidized private insurance for medicare recipients. Although the program was slated to be cut in 2012, it was extended through the election year under the guise of an “experiment” in order to not cut a very popular program for seniors in an election year. There have been few acts of corrupt pandering more blatent in US history.
- Prescription drug “donut hole”: There is a $310 dollar deductible for prescription drugs. Between $310 and $2800 medicare pays for 75%. Between $2800 and $4550 the patient pays 100% (the hole in the donut). After $4550 Medicare picks up 95%. This will be gradually closed.
- Drug company mandate: Drug companies give a 50% discount off the price of brand named (new) drugs. The cost to the drug companies is estimated at $42,500,000,000.
- Independent Payment Advisory Board: This was originally designed as a board that would ration care. A citizens worth to society would be the basis of how care was rationed. This was deemed political suicide for some democrats, so the mission of the board was modified. Beginning in 2015, it will only control how treatments are compensated. Instead of telling somebody they can’t have a treatment, they will tell the doctor and later the hospital (starting in 2020) that it will
Topics in Depth
Physician compensation cuts
Arguments in favor:
Physicians make too much money. A large driver of health care costs is high physician pay in a fee for service system. The more doctors perform procedures, the higher the cost to society.
Arguments against:
Already 1/3rd of physicians do not accept Medicare. Slashing the compensation another 25% would mean most of the remaining doctors would drop the program. Almost half of the anticipated savings from medicare cuts would come from this 25% reduction no Congress has been willing to pass.
Market economy 101 – If you drive down physician compensation per procedure, this will make them do more procedures. If you drive it down to the point they will not make a profit, they will stop doing the procedure. This will be the first step in rationing care.
Filling the donut hole
Arguments in favor:
Seniors need help paying for medications.
Arguments against:
There is not a single entitlement that has not stayed within budget. People will abuse it until there is no money left. Then it gets rationed.
Drug price controls
Arguments in favor:
Drug companies charge more for their name brand drugs then they should. They make too much money and drive up the cost of health care.
Arguments against:
Drug companies will lose 42 billion dollars if they do not make it up by increasing costs for consumers. 1/3rd of all profits go into I&D (check financial report for any major pharma company). This means 14 billion will be lost that would have been used for researching new medications. That figure is nearly 60 percent of the entire NIH research budget.
IPAB (death panel)
Arguments in favor:
The rising costs of health care require a regulatory body to keep prices down. It does not ration care because it will only control compensation decisions.
Arguments against:
The idea that deciding what will be compensated for is not a form of rationing does not fool anybody. If a procedure is too expensive or primarily used on the elderly, they will pull funding. One of the main advisors to the president was Rahm Emanuel’s brother, Dr. Emanuel. He produced a chart showing a person’s worth to society based on their age. This chart was to be used to decide what treatments should allowed each individual. Here is the link to the full article.