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Obamacare either MASSIVE cuts to Medicare or MASSIVE deficits
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Yeah, we were all lied to...
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The Obamacare health care bill will absolutely cause a deficit. Why? 2 reasons:
1 The estimate they gave to the CBO has 10 years of revenues but only 6 of benefits (because benefits start in 2013).
2 Obamacare relies on unsustainable cuts to payments to Medicare doctors.
The link above is for a very long document provided by CMS.gov, who are the actuaries for Medicare. In it they examine Obamacare's (PPACA) long term effect on Medicare, and it's sustainability. Some relevant sections:
Let's get Medicare cuts right off the bat. On p.23 you can clearly see that this bill is paid for largely by cuts to Medicare. Total just for 2010-2019 is $575.1 billion). So what are these cuts to Medicare? They aren't cuts to benefits, they are cuts to proposed PAYMENTS to doctors that accept Medicare patients.
So what's wrong with that? Well, the main problem is that ALREADY doctors are limiting the number of Medicare patients because...PAYMENTS ARE ALREADY TOO LOW. A full 13% of doctors refuse ALL Medicare patients because the payments are too low. Ah yes, the wonders of Medicare.
So if the payments are already too low...how can Medicare expect to cut payments FURTHER and retain Medicare doctors?
Answer: they can't.
If you read the quotes below, they clearly state that the cuts to Medicare doctors are NOT SUSTAINABLE, which means they won't happen.
Congress just had a proposed 21% cut in Medicare payments that took effect June 1st; the Senate punted and reversed the cut until after the November elections.
Time and again, Congress refuses to cut payments to Medicare doctors. Why? Because to do so means that FEWER AND FEWER doctors will accept Medicare, effectively making the entire Medicare unusable.
What is the point of you Medicare if no doctor in your area treats Medicare patients?
So this is why in the real world, these Medicare cuts will NOT be made. What will happen instead is that Congress will quietly NOT cut Medicare payments, which will end up ballooning the deficit.
"Examples of the latter include the productivity adjustments to Medicare payment updates for most categories of providers, which would reduce overall Medicare cost growth by roughly 0.6 to 0.7 percent per year, and the Independent Payment Advisory Board process, which would further reduce Medicare growth rates during 2015-2019 by about 0.3 percent per year. As discussed previously, however, the growth rate reductions from productivity adjustments are unlikely to be sustainable on a permanent annual basis, and meeting the CPI-based target growth rates prior to 2020 will be very challenging as well."
According to CMS.gov, MEDICARE'S OWN ACTUARY, these cuts to payments are "unlikely to be sustainable".
Check out this quote on p.20:
"As stated in the section on Medicare estimates, reductions in payment updates to health care providers, based on economy-wide productivity gains, are unlikely to be sustainable on a permanent annual basis. If these reductions were to prove unworkable within the 10-year period 2010-2019 (as appears probable for significant numbers of hospitals, skilled nursing facilities, and home health agencies), then the actual Medicare savings from these provisions would be less than shown in this memorandum. Similarly, the further reductions in Medicare growth rates mandated for 2015 through 2019 through the Independent Payment Advisory Board may be difficult to achieve in practice."
To repeat:
"If these reductions were to prove unworkable within the 10-year period 2010-2019 (as appears probable for significant numbers of hospitals, skilled nursing facilities, and home health agencies), then the actual Medicare savings from these provisions would be less than shown in this memorandum. "
That is, deficits going through the roof because of Obamacare.
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