Cutting costs means cutting
President Barack Obama is poised to unveil a new plan for tackling mammoth deficits -- a plan that aims to rein in soaring Medicare and Medicaid costs but balances benefit cuts with higher taxes on the rich. AP video. (April 12)
Talking tough about containing Medicare costs is all the rage in Washington. Actually doing it, not so much.
The nation has a decision to make: We can do what it takes to control health care spending, or we can admit we don't want to and accept higher taxes to pay for current programs. Washington is dodging that choice while backpedaling on cost-cutting approved in the health care reform law.
One source of savings was to be reduced payments to private insurers for covering seniors in Medicare Advantage plans. Washington pays 12 percent more to insure an individual in one of those plans than it would cost to cover that person directly in Medicare. That should be an easy cut.
But in a politically advantageous about-face, the Obama administration decided to give hundreds of Medicare Advantage plans "quality bonuses" -- even though they were rated average. That means spending $6.7 billion that should have been saved.
Then there is the expert panel established by the reform law to come up with cost-cutting measures whenever Medicare spending exceeds certain limits.
Congress would still have the last word, either accepting the recommendations or adopting other plans for equivalent savings. But some Democratic and Republican lawmakers are opposed to that approach, apparently wary of ceding turf to unelected experts.
The public and its elected officials need to embrace a simple truth: You can pay less or have it all, but not both.
