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Photo of man who supports obamacare at the supreme court in washington dc on 6/28/12.
Is it time yet?
While healthcare costs overall have increased—as expected with all the new patients thanks to Obamacare—in the last few quarters, Medicare spending growth is really, really slow. The Committee for a Responsible Federal Budget finds that Medicare growth in the first eight months of this fiscal year has been just 0.3 percent. Some of that can be accounted for by federal policies, "the Medicare sequester [which wasn't in effect for part of FY 2013], payment reductions in the Affordable Care Act for home health agencies and Medicare Advantage plans, ramped-up hospital readmission penalties, and frozen means-tested Medicare premium income thresholds." Even without those factors, though, costs are being held down.
Chart of year-to-date Medicare growth
Adjusted for timing shifts, Medicare growth is even lower through eight months at just 0.3 percent. And even after removing the effects of temporary policies, year-to-date Medicare growth remains extremely low at 2.5 percent, even lower than through April. This is more than a full percentage point below economic and beneficiary growth, meaning that even excluding one-time effects, Medicare spending is on pace to both fall as a percent of GDP and on a per-capita basis. [emphasis in original, which tells you how big a deal this is to these analysts!]
The Incidental Economist notes that economic growth is 3.9 percent. Obamacare's supposed "death panel," the Independent Payment Advisory Board would kick in when spending reached GDP + 1 percent. We're nowhere near that now. So yes, this is pretty good news for Medicare, and should mean the end to any talk about raising the eligibility age for the program, or doing more means testing. Hell, maybe now would be time to start talking about expanding the program. Medicare at 55, anyone?

Originally posted to Joan McCarter on Thu Jun 12, 2014 at 04:06 PM PDT.

Also republished by Daily Kos.

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Comment Preferences

  •  Tip Jar (25+ / 0-)

    "The NSA’s capability at any time could be turned around on the American people, and no American would have any privacy left, such is the capability to monitor everything. [...] There would be no place to hide."--Frank Church

    by Joan McCarter on Thu Jun 12, 2014 at 04:06:27 PM PDT

  •  MEDICARE FOR ALL (2+ / 0-)
    Recommended by:
    Gooserock, alypsee1
    •  Not so fast please (3+ / 0-)
      Recommended by:
      Bronx59, scott jones, indres

      I am a year away from Medicare. My ACA-exchange policy is much cheaper for me than Medicare, because the ACA subsidies are sliding scale based on income while Medicare is a flat amount for everyone no matter how big a bite it takes -- except for the very-poor (Medicaid pays their premiums) and the very-rich (who pay a surcharge). I'm not looking forward to what will likely be an extra $150 a month out of my pocket for regular Medicare + BushCare (Part D).

      On top of that, there is a surcharge for people who have to pay their Medicare premiums themselves because they are not yet collecting Social Security.

      And the co-pays and deductibles are higher than I have with my ACA policy, I believe. (I am a very low user of health care services, so I don't really know.)

      So yes, it would be good to have a single system instead of the current patchwork. But Medicare as currently structured would not be a good deal financially for many people.

      •  Medicare Costs (1+ / 0-)
        Recommended by:
        scott jones

        While you are correct that the cost of "traditional Medicare" are $104.90 for Part B and anywhere from $25 to $45 for Part D, so your $150 estimate is in the ballpark, there is only a surcharge on Part B if your income is great ($250K for couple) or unless you failed to get Part B in a timely manner and are charged a penalty. There is no surchage because you are not collecting Social Security.  "Traditional Medicare" has an 80/20% split and is why many, who can afford it, purchase a Medigap (supplemental) policy (Plans A through O offered by private insurers). They are not cheap.

        Another option for you, depending on your state, is a Medicare Advantage Plan offered by private insurers. In many states, there are no premiums and some plans offer vision and dental as well plus prescriptions.  However, these plans are 80/20% split as well.

  •  Medicare for All (6+ / 0-)

    It's a good policy. It's the future of American health care, just as Obamacare was the future of American health care back when it was a Republican idea. Maybe we just have to wait 20 years, again, for the right thing to be done. Because even Joe Lieberman was for it, before he was petulantly against it:

    Mr. Lieberman had supported the Medicare buy-in proposal in the past — both as the Democrats’ vice presidential nominee in 2000 and in more recent discussions about the health care system. In an interview this year, he reiterated his support for the concept.

    But in the interview, Mr. Lieberman said that he grew apprehensive when a formal proposal began to take shape. He said he worried that the program would lead to financial trouble and contribute to the instability of the existing Medicare program.

    And he said he was particularly troubled by the overly enthusiastic reaction to the proposal by some liberals, including Representative Anthony Weiner, Democrat of New York, who champions a fully government-run health care system.

    it fitfully blows, half conceals, half discloses

    by Addison on Sat Jun 14, 2014 at 07:07:22 PM PDT

  •  Hell, I think its a good idea to start (6+ / 0-)

    talking about expanding Social Security and Medicare as often as possible because it instantly short-circuits all the right brains in DC.

    The austerity movement needs austerity to be the only answer to even have a shot. Anything else is on the table, and they have to argue why that it's a better option rather than the only option and they are on the defensive from the get-go.

    "Real journalism is printing what someone else does not want printed. Everything else is public relations." -George Orwell

    by LeftHandedMan on Sat Jun 14, 2014 at 07:08:00 PM PDT

  •  Someday we'll have a Congress which can (6+ / 0-)

    understand and appreciate the overwhelming benefits, both fiscal and social, of single payer #Medicare4ALL.

    I only hope I live long enough to see that day arrive.

    "I like paying taxes...with them, I buy Civilization"

    by Angie in WA State on Sat Jun 14, 2014 at 07:12:35 PM PDT

  •  This is good news. (3+ / 0-)
    Recommended by:
    Tamar, Yoda54, ybruti

    This is one more benefit that the "repeal Obamacare" politicians would eliminate. The ACA is about more than affordable coverage for the uninsured. The law extends the fiscal life of Medicare. Democratic candidates need to make sure seniors know that Obamacare is working for them too.

    •  Not sure this is true (0+ / 0-)
      Democratic candidates need to make sure seniors know that Obamacare is working for them too
      I don't think this is true.  We aren't allowed ACA if we have Medicare.

      Medicare requires a 20% co-pay plus monthly premiums.  I did a comparison at the ACA website.  My monthly costs for healthcare would decrease significantly by signing up for private insurance through a marketplace exchange.  However, by law, if I'm eligible for Medicare, I can't be sold another policy through the ACA.

      The ACA would work wonderfully for seniors, if we were all allowed to actually use it and benefit from it.  I don't know if it's all seniors, or just my income level.  But, it was true for me when I wanted to supplement or replace Medicare as my insurance.

      Seniors are being left behind in the area of health insurance.  Yes we have it through Medicare, but that's not as good as private insurance when you consider the co-pays and monthly premiums for Parts A, B, and D.  

      Also a huge problem is that most doctors won't take Medicare as insurance anymore.  All doctors, ALL, in my area refuse Medicare as a payment source because Republicans, who else?, cut payments to doctors.  Then cut those payments again in one of the budgets bills.  One doctor said that he'd like to take Medicare patients, but with paying off his student loans, office staff, etc., he couldn't afford to do it.  This is echoed through most of the medical community.

      So, seniors aren't doing very well in the ACA era.  As I said, we're being left behind just like those who would benefit from Medicaid expansion but live in a state that won't expand.  

      We're moving in the right direction.  But, lots of folks still being left behind, young and old, and inbetween.

      •  Medicare (1+ / 0-)
        Recommended by:

        Seniors on Medicare do benefit from ACA in a number of ways.  ACA has extended the life of Medicare by about ten years before it would go broke and must be re-financed, and seniors who are in the donut hole benefit from the ACA provisions that reduce the costs of the drugs. Last year, brand names were reduced by 50% and this year by 53%.  Generics are reduced by a smaller percentage.  The donut hole will close entirely by 2020.

        Additionally, the ACA requires that all preventive tests and services are provided without any copay. (Immunization, mammograms, colonoscopies, annual physical, etc.)

        There are a number of provisions in ACA which help low-income seniors.  Check with Center for Medicare Services.

        Regarding your comments that doctors aren't accepting Medicare, you may be confusing Medicare with Medicaid which has lower reimbursements.  I live in an area with a high older population and all doctors here (and there are thousands) accept Medicare.

        •  Thanks for your comments (0+ / 0-)

          I'm glad that Medicare can be extended in funding.  But, that isn't a set thing when Repukes are determined to dismantle/defund it as soon as they can.  I hold my breathe every time Congress starts working on a budget (Federal or state) wondering how much I'll lose "this year" having both programs.

          As for co-pays, my Part D co-pays increased in 2014, as did the premium.

          I really do know the difference between MediCAID and MediCARE.  The doctors here will take neither.  There's one clinic 45 miles away where everyone without private insurance must go, or nothing.  The next choice is 85 miles.  The clinic is run more or less like a cattle call with staff that should never have a job in healthcare.  Interferes with their tweeting, you see.

          If you live in an area with a high senior population, I can see why things might be different.  But, where I live, it isn't so.

  •  Umm, economic growth 3.9% who pulled that (2+ / 0-)
    Recommended by:
    brightlights, John in Cleveland

    number out of their Arse?

    The Economy shrank by at least 1% annualized last quarter. One more negative quarter and we are officially in a recession:

    "The Earth is my country and Science my religion" Christiaan Huygens. The gold standard ended on August 15, 1971, its time we start acting like it. If we can afford full employment killing Germans, we can afford full employment during peace-time.

    by Auburn Parks on Sat Jun 14, 2014 at 07:17:48 PM PDT

  •  Bill Richardson proposed Medicare buy-in (1+ / 0-)
    Recommended by:

    for those age 55 and over when he was running for president in 2007. Obama, Hillary, and John Edwards all had proposals similar to what the ACA became. Maybe it's time to start thinking about Richardson's idea as a step toward Medicare for all. (after we flush out the obstructionists who are constipating Congress).

  •  And because Medicare is run by the government (5+ / 0-)

    and is centralized (unlike Medicaid), administrative costs are a tiny percentage of the costs. You won't see Medicare administrative costs include big salaries and big bonuses for the CEOs and CFOs.

    a decade ago, I saw studies in CA and FL (I think it was FL) looking at administrative costs of insurance companies and HMOs. The for-profit ones had rates of anywhere from 15% to 30%. For the most part, the not-for-profit were much lower (though there were ones who had higher costs -- my guess is that those were the non-profit-in-name-only health coverage organizations).

    Medicaid has slightly higher administrative costs because each state has its own plan. But even with the inefficiency of that system, Medicaid outperforms profit-making and private coverage -- last time I looked, Medicaid administrative expenses were about 4%.

    (of course, until recently, Medicare Advantage programs did a great job of providing lots of profit to their executives at the expense of American taxpayers. But that's been curtailed to some degree).

    While Democrats work to get more people to vote, Republicans work to ensure those votes won't count.

    by Tamar on Sat Jun 14, 2014 at 07:38:06 PM PDT

    •  Medicare Advantage (5+ / 0-)
      Recommended by:
      Yoda54, Australian2, Bronx59, indres, cocinero

      is a GOP plan which does what, you ask?
      why, it restricts access to providers at increased costs. I looked into it with United and concluded that it: a) served me much less well than my Supplement Plan F (which even covers oversea travel), and b) costs more, padding CEO's, er, adequate salaries.
      BTW, OT, I got excellent care in France in Sarlat-la-Canada's general hospital. I stumbled on a 10th century cobblestone and hit my head against a 12th century wall. The Gauls won, the Britt schoolmarms called the paramedics who, despite my protests, hauled me to the ER. There, to my horror, they admitted me overnight for observation. The food? Well, it was France. The next day they discharged me, called me a cab, and bid adieu. The cost? Nada, zero, zip. EOS.
      I fell in with civilized people...  

      "the northern lights have seen queer sights, but the queerest they ever did see. Was that night on the marge of Lake Lebarge, I cremated Sam McGee". - Robert Service, Bard of the Yukon

      by Joe Jackson on Sat Jun 14, 2014 at 09:01:04 PM PDT

      [ Parent ]

  •  Doc fix? (2+ / 0-)
    Recommended by:
    bull8807, Yoda54

    Does the growth rate include the cost of the doc fix which takes place every year?

    If I remember correctly they would always assume the lower cost without the doc fix to make Medicare look less costly knowing they would pass the doc fix provision later on which eliminated the savings assumed in reimbursement rate cuts that don't end up happening.

    It is a classic Washington trick to make things look less costly than they appear.

  •  Are these numbers adjusted for population? (0+ / 0-)

    i.e. some of the growth may just be the influx of seniors and per capital costs might be growing much slower.

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