Medicare Advantage Growth Driving Up Federal Spending

[dockside]

Federal healthcare spending relative to GDP doesnt really matter . Every real dollar taken from me and spent on someone else who didnt earn it, matters. Not how small those dollars are relative GDP. And those dollars have TRIPLED since the ACA was passed. And so has my direct cost of healthcare. It may be more affordable for those Im paying for, but it certainly isnt for me.

In GDP terms or real terms the problem has gotten worse and is only getting worse. More of GDP being taken and spent on healthcare, more real dollars being taken and spent on healthcare.

In 2009 the govt spent 700bn on healthcare, today they are spending 1.7 trillion.
In 2009 the govt spent 4% of GDP on healthcare, todays its 6%

In 10 years theyll have spent another 14 trillion on healthcare!

So what do you propose to address the rising costs of health care which affect those in lower income brackets the worst? Since you seem to only care about how it affects you, financially, and the government budget, do you propose that those who cannot afford healthcare without help from the government just die? Perhaps we should take a look at how the rest of the developed nations handle it. It is unthinkable to most citizens of those countries that healthcare only be available to those who can afford it. The cost of healthcare in those countries, even to the lower income individuals, is much lower than what it is here. And they have longer life spans than the U.S. So, what are we doing wrong? And, do you propose we do something different? And, if so, what?

 

[jonny5]

So what do you propose to address the rising costs of health care which affect those in lower income brackets the worst? Since you seem to only care about how it affects you, financially, and the government budget, do you propose that those who cannot afford healthcare without help from the government just die? Perhaps we should take a look at how the rest of the developed nations handle it. It is unthinkable to most citizens of those countries that healthcare only be available to those who can afford it. The cost of healthcare in those countries, even to the lower income individuals, is much lower than what it is here. And they have longer life spans than the U.S. So, what are we doing wrong? And, do you propose we do something different? And, if so, what?

We shouldnt look at the rest the world, they are not relevant since they dont have the same prioties as us. What we should do is get the govt out of it. Then YOU can do whatever works best for you. If you want socialist healthcare in your group have at it. If I want to spend my money on me and not other people, then I would free to do so as well.

I am not responsible for lower income brackets, or those who cant afford healthcare. Neither is the Union. Its purpose is to secure our rights, to be free from violence, and free to pursue happiness how we choose.

How about this simple compromise. Let people opt out of medicare and all federal healthcare programs. No taxes, no services. Thats a win win.

 

[rahl]

We shouldnt look at the rest the world, they are not relevant since they dont have the same prioties as us. What we should do is get the govt out of it. Then YOU can do whatever works best for you. If you want socialist healthcare in your group have at it. If I want to spend my money on me and not other people, then I would free to do so as well.

I am not responsible for lower income brackets, or those who cant afford healthcare. Neither is the Union. Its purpose is to secure our rights, to be free from violence, and free to pursue happiness how we choose.

How about this simple compromise. Let people opt out of medicare and all federal healthcare programs. No taxes, no services. Thats a win win.

No. We will continue taking your tax dollars and using them for basic govn’t services. Because libertarian utopian fantasies do not and have never at any time in human history worked.

 

[AZRWinger]

All real Medicare cost growth since the ACA passed in 2010 has been due to enrollment growth (i.e., people aging into it). Unavoidable, unless someone invents an anti-aging ray. Of course, this is now threatened by the Medicare Advantage cash monster.

Amazingly, not only did real Medicare per beneficiary cost growth abruptly stop its 45-year climb when the ACA passed and hasn't resumed since (see below), excess cost growth in the American health care system as a whole averaged zero in the decade-plus after the ACA passed (and that's counting the 2020 surge in health spending during the pandemic)--something unprecedented over any ten-or-more-year period.

This is the biggest budget win of our lifetimes.

Medical spending didn't increase as much as projected so that's "savings" ? That's pure Democrat doublespeak.

According to the Harry Reid dictated CBO report Obamacare was going to save $1 billion per year in Federal health-care spending. The CBO report included the force fed assumption health-care provider reimbursements by 22%. Obamacare was also going to end Medicare advantage. None happened.

More boomers retired. They all got older making it more likely they'd need medical care. Medicare advantage was not only spared cancellation its enrollment grew.

Obamacare's cost reduction assumptions turned out to be false. But, Medicare advantage is to blame for medical cost increases. Nonsense.

 

[Greenbeard]

Medical spending didn't increase as much as projected so that's "savings" ? That's pure Democrat doublespeak.

According to the Harry Reid dictated CBO report Obamacare was going to save $1 billion per year in Federal health-care spending. The CBO report included the force fed assumption health-care provider reimbursements by 22%. Obamacare was also going to end Medicare advantage. None happened.

More boomers retired. They all got older making it more likely they'd need medical care. Medicare advantage was not only spared cancellation its enrollment grew.

Obamacare's cost reduction assumptions turned out to be false. But, Medicare advantage is to blame for medical cost increases. Nonsense.

Obamacare's cost reduction assumptions turned out to be vastly understated. In real life, the savings turned out to be much larger than anyone predicted. To repeat some (astonishing) basic facts, excess health care cost growth after 2010 was zero and real per beneficiary cost growth in Medicare simply stopped after the ACA passed. Nothing like that has ever happened before.

Medicare Advantage's problem is that it costs the taxpayers more than traditional Medicare for the same beneficiaries. It always has, though the ACA erased most of the differential (an obvious policy success that rightwing alarmists falsely claimed at the time "was going to end Medicare Advantage"). That progress is now reversing and thus requires attention.

 

[AZRWinger]

Obamacare's cost reduction assumptions turned out to be vastly understated. In real life, the savings turned out to be much larger than anyone predicted. To repeat some (astonishing) basic facts, excess health care cost growth after 2010 was zero and real per beneficiary cost growth in Medicare simply stopped after the ACA passed. Nothing like that has ever happened before.

Medicare Advantage's problem is that it costs the taxpayers more than traditional Medicare for the same beneficiaries. It always has, though the ACA erased most of the differential (an obvious policy success that rightwing alarmists falsely claimed at the time "was going to end Medicare Advantage"). That progress is now reversing and thus requires attention.

Not a word about the failed CBO analysis concocted by Harry Reid. Obamacsre wasn't supposed to stop excess healthcare cost growth, whatever that gibberish is, supposed to mean, it was supposed to make real reductions to healthcare costs it failed. Congress had to step in with a so-called doctor fix after healthcare providers refused en mass to accept new Medicare patients. Double fail.

 

[Pyrite]

<snipped>

Medicare Advantage's problem is that it costs the taxpayers more than traditional Medicare for the same beneficiaries. It always has, though the ACA erased most of the differential (an obvious policy success that rightwing alarmists falsely claimed at the time "was going to end Medicare Advantage"). That progress is now reversing and thus requires attention.

Yes, Medical Advantage costs taxpayers more than traditional Medicare. And it almost certainly makes huuuuuuuuge profits, as evidenced by the surge in advertising over the last years.

 

[Lovebug]

Is anyone wondering why it is so complicated?

 

[Greenbeard]

Not a word about the failed CBO analysis concocted by Harry Reid. Obamacsre wasn't supposed to stop excess healthcare cost growth, whatever that gibberish is, supposed to mean, it was supposed to make real reductions to healthcare costs it failed. Congress had to step in with a so-called doctor fix after healthcare providers refused en mass to accept new Medicare patients. Double fail.

It was supposed to slow the growth in health care costs, which it did. Substantially more than even its most optimistic boosters predicted. That's why its cost came in hundreds of billions of dollars below that CBO score and its savings came in hundreds of billions of dollars above it.

The "doc fix" doesn't have anything to do with the Affordable Care Act, it was a series of remedies to the GOP's 1997 Balanced Budget Act that began in 2003.

 

[AZRWinger]

It was supposed to slow the growth in health care costs, which it did. Substantially more than even its most optimistic boosters predicted. That's why its cost came in hundreds of billions of dollars below that CBO score and its savings came in hundreds of billions of dollars above it.

Obamacare failed to produce the savings projected by the CBO anslysis warped by Harry Reid's unrealistic assumption. No problem for Democrat propagandists, just change the definition of "savings" to slowing the rate of healthcare cost increases. The newspeak savings is like saying "I didn't increase my credit card balance as much as I anticipated so I saved money". Simple arithmetic shows this claim of savings by cost growth reduction to be nonsensical

The "doc fix" doesn't have anything to do with the Affordable Care Act, it was a series of remedies to the GOP's 1997 Balanced Budget Act that began in 2003.

Oh really? So healthcare reimbursement rates were reduced by 22% as the force fed assumption in the CBO report states? Of course not. Of course the doc fix rescued millions from losing their healthcare thanks to the ravages of Obamacare. But it had nothing to do with that.

 

[jonny5]

It was supposed to slow the growth in health care costs, which it did. Substantially more than even its most optimistic boosters predicted. That's why its cost came in hundreds of billions of dollars below that CBO score and its savings came in hundreds of billions of dollars above it.

And yet, increased federal health care spending by triple. Those are not savings. Its just another welfare program.

3. Federal Health Spending Is Unsustainable, Needs $1.9 Trillion Trim Over Next Decade​

In January, Paragon Health Institute (where I am the president) released a study from budget policy expert Paul Winfree that quantified the contribution of federal health spending to the US’s unsustainable fiscal trajectory. Winfree measured sustainability using fiscal space or the federal government’s ability to borrow money in the future. Winfree estimated that federal spending on government health programs must be reduced by at least 7.5 percent of baseline spending, or 0.5 percent of the economy, over the next decade to put these programs on a sustainable path. The CBO’s estimates of $25 trillion in federal health subsidies over the next decade translates into needing about a $1.9 trillion reduction in spending. A February study that I coauthored with Joe Albanese contained a dozen reforms to Medicaid and Medicare that would achieve the level of necessary savings.

Importantly, baseline spending assumes enhanced ACA exchange subsidies (described below) expire after 2025. Extending those for another decade would likely mean about $250 billion in higher federal costs.

https://www.healthaffairs.org/content/forefront/cbo-report-highlights-need-change-direction-health-policy

 

[Greenbeard]

Obamacare failed to produce the savings projected by the CBO anslysis warped by Harry Reid's unrealistic assumption. No problem for Democrat propagandists, just change the definition of "savings" to slowing the rate of healthcare cost increases.

The definition was always based on slowing the rate of increase ("bending the cost curve"). The CBO analysis assumed ~$500 billion in savings over the first decade, mostly in the Medicare program.

Their numbers were indeed unrealistic, in that actual savings came in at nearly double what they projected in their score. And that's because health care cost growth overall plunged far more than anyone anticipated.

Medicare Spending (Billions $)

​	2010​	2011​	2012​	2013​	2014​	2015​	2016​	2017​	2018​	2019​	2010-19​
CBO (No-ACA) Baseline	528​	574​	581​	638​	710​	735​	794​	830​	867​	962​	7,219​
CBO ACA Projections	519​	560​	563​	611​	645​	677​	733​	763​	797​	869​	6,737​
Projected Savings	9​	14​	18​	27​	65​	58​	61​	67​	70​	93​	482​
Actual Spending	524​	554​	551​	585​	600​	634​	692​	702​	728​	768​	6,338​
Actual Savings	4​	20​	30​	53​	110​	101​	102​	128​	139​	194​	881​

Oh really? So healthcare reimbursement rates were reduced by 22% as the force fed assumption in the CBO report states? Of course not. Of course the doc fix rescued millions from losing their healthcare thanks to the ravages of Obamacare. But it had nothing to do with that.

Those CBO baseline numbers included the GOP's (unrealistic) physician reimbursement cuts from the 1997 Balanced Budget Act, sure. And those were indeed averted until the relevant provision of the BBA was ultimately repealed. What that means is that the baseline the CBO was using was artificially low (since it didn't include the physician pay raises everyone knew was coming).

In other words, when the "official" numbers above show that we saved $881 billion on Medicare in the ACA's first decade, that number is actually low because in an ideal world the baseline would've included the expected physician pay bumps and thus been higher. (The actual spending numbers, of course, do include those physician pay bumps because they actually happened.) So really, the ACA budgetary savings in the first decade was well over a trillion dollars. Pretty astonishing stuff--and yeah, the docs got their raises!

Then remember that the health care cost growth slowdown was systemwide and we're just considering the Medicare budgetary impact here. The cost slowdown was felt everywhere--in employer-based coverage, Medicaid spending, the new ACA marketplace subsidies, etc. The savings on overall American health care costs was in the multi-trillion dollar range in that first decade. And it continues today.

 

[Greenbeard]

And yet, increased federal health care spending by triple. Those are not savings. Its just another welfare program.

And yet again, federal health care spending is multiple points lower as a percentage of GDP (even with the new "welfare program") then it was on track to be in the absence of the ACA. According to the Long-Term Budget Outlooks you like to cite. The budget picture with respect to health spending improved after the ACA passed.

 

[jonny5]

And yet again, federal health care spending is multiple points lower as a percentage of GDP (even with the new "welfare program") then it was on track to be in the absence of the ACA. According to the Long-Term Budget Outlooks you like to cite. The budget picture with respect to health spending improved after the ACA passed.

So what? It still tripled. Going from theoretically really bad to not as bad as we thought is not "This is the biggest budget win of our lifetimes." It is still a loss. They took a 500bn deficit and increased it to 1.3 trillion deficit, just in healthcare. Oh but it wasnt 20 trillion, so we saved 19 trillion! Why not 100 trillion? They saved us 99 trillion!

 

[Greenbeard]

So what? It still tripled. Going from theoretically really bad to not as bad as we thought is not "This is the biggest budget win of our lifetimes."

Of course it is. Trillions and trillions of dollars have been shaved off of current and future federal budgetary obligations. There’s nothing even remotely comparable to halting the rise in real per beneficiary Medicare spending for a decade and a half (and counting).

 

[jonny5]

Of course it is. Trillions and trillions of dollars have been shaved off of current and future federal budgetary obligations. There’s nothing even remotely comparable to halting the rise in real per beneficiary Medicare spending for a decade and a half (and counting).

No, it certainly isnt. Trillions and trillions were actually added on TODAY. Halting theoretical future spending by tripling real actual spending is not "the biggest budget win of our lifetimes." We the peopel who actually pay for these things are worse off today than we were before ACA.

In 2023, federal subsidies for health insurance are estimated to be $1.8 trillion, or 7.0 percent of gross domestic product (GDP). In CBO and JCT’s projections, those net subsidies reach $3.3 trillion, or 8.3 percent of GDP, in 2033.

This is reality. Spending has increased, and will keep increasing. And they just added more to it with the last few bills. 300bn just in the ARRA, which will never expire.

 

[Pyrite]

No, it certainly isnt. Trillions and trillions were actually added on TODAY. Halting theoretical future spending by tripling real actual spending is not "the biggest budget win of our lifetimes." We the peopel who actually pay for these things are worse off today than we were before ACA.



This is reality. Spending has increased, and will keep increasing. And they just added more to it with the last few bills. 300bn just in the ARRA, which will never expire.

Medicare Advantage plans - now chosen by 52% of seniors - cost taxpayers more than traditional Medicare.

Do you support shutting these down?

 

[jonny5]

Medicare Advantage plans - now chosen by 52% of seniors - cost taxpayers more than traditional Medicare.

Do you support shutting these down?

Of course, and the rest of medicare too. Its not my job to pay for other peoples healthcare. Im spending enough on my own.

 

[Helix]

Cover everyone with single payer.

 

[ttwtt78640]

Obamacare's cost reduction assumptions turned out to be vastly understated. In real life, the savings turned out to be much larger than anyone predicted. To repeat some (astonishing) basic facts, excess health care cost growth after 2010 was zero and real per beneficiary cost growth in Medicare simply stopped after the ACA passed. Nothing like that has ever happened before.

Medicare Advantage's problem is that it costs the taxpayers more than traditional Medicare for the same beneficiaries. It always has, though the ACA erased most of the differential (an obvious policy success that rightwing alarmists falsely claimed at the time "was going to end Medicare Advantage"). That progress is now reversing and thus requires attention.

Yep, since my (WellCare) Medicare advantage plan pays (saves?) me $95/month in (part B) premiums (and reduced copays) it must be costing someone (the federal government?) more to provide that benefit.

 

[Greenbeard]

MedPAC's annual March Report to Congress on Medicare payment policy is out and the Medicare Advantage chapter is getting some attention across the ideological spectrum. It costs the taxpayers substantially more when a Medicare beneficiary picks a privatized Medicare Advantage plan over traditional Medicare.

 

[dmpi]

Of course medicare advantage costs more. Basic medicare is just garbage and doesn't cover very much.