Research

The Senate just voted down Sen. John McCain’s motion to send the Obama-Reid government-run health care experiment back to the Senate Finance Committee with instructions for the committee to strip out nearly $500 billion in Medicare cuts. These cuts are based on top-down, across-the-board reductions. Former OMB economist James Capretta analyzed the payment reform elements for Kaiser Health News and concluded that the proposed Medicare cuts are just big government heavy-handedness:

The Reid bill would achieve significant Medicare savings in the coming years, but not with innovative payment policies or more efficient health care delivery. The savings would come from across-the-board payment rate cuts, applied without regard to any metric of quality, which is instructive.

As a face-saving alternative, Democrats are rallying behind an amendment by Sen. Michael Bennet (D-CO), which promises that nothing in the bill will cut guaranteed Medicare benefits. Yesterday, we noted an important shift on this issue: Democrats stopped denying that their bill will cut Medicare benefits and instead deny their bill will cut guaranteed Medicare benefits. In other words, they are implicitly conceding that seniors on Medicare Advantage will lose their benefits, their doctors, and their plans.

Bennet’s amendment also promises that the Medicare savings will go to shore up the Medicare trust fund.  But that promise is based on phony accounting.  Billions of dollars will be diverted from Medicare payroll taxes to pay for the creation of two new health care entitlements.

See our new Research Briefing outlining the damage to Medicare that Democrats just voted to support, “Dems To Seniors, Bid Farewell To Your Doctors, Benefits.”