Gutting Medicare

Democrats say Republicans want to gut Medicare, an accusation that couldn’t be further from the truth. President Biden claimed, “Republicans will let America default on its own debt if Medicare and Social Security are not cut.” Not to be outdone, Senate Majority Leader Chuck Schumer said Republicans “call for putting Social Security, Medicare, and Medicaid on the chopping block.”

Democrats believe in Medicare they have a powerful political issue they can use against Republicans. But an honest assessment of the facts reveals that Republicans are recognizing reality by addressing the elephant in the room – Medicare’s looming insolvency.

Without changes to the current system, the Medicare Board of Trustees says Medicare’s Hospital Insurance fund will become insolvent by 2028. Starting in 2029, Medicare will have less money to fully pay hospitals and providers, so they would see reimbursement cuts of around 10%, growing each year thereafter.

The Congressional Budget Office predicts insolvency two years later, in 2030, but agrees with the Trustees that Medicare hospital spending would be cut 10% if nothing is done.  Let’s call this what it is – a cut in Medicare spending. It would translate into hospitals and doctors reducing or eliminating available services. It would encourage more doctors to exit an already overworked and understaffed health care industry, further exasperating patients experiencing longer wait times or struggling to find the right doctor.

Instead of accepting a 10% cut to Medicare spending, there are options to reduce Medicare costs. For  example, improper payments cost Medicare about $40 billion in 2020, which can be curbed with simple strategies such as checking invoices to ensure services billed were provided.

Another avenue to savings would be to implement a strategy known as site-neutral payment policies. Currently, hospitals are reimbursed more for the same procedure than outpatient facilities like surgery centers. Hospitals are thus incentivized to keep their higher reimbursement rates by buying outpatient businesses, which eliminates competition and keeps costs high.

At the same time Democrats accuse Republicans of wanting to gut Medicare, they are actively trying to undermine the popular Medicare Advantage program, a private alternative to traditional Medicare. In 2022, almost half of Medicare beneficiaries (48%) were enrolled in a Medicare Advantage plan, up from just 27% ten years earlier.

Furthermore, a recent poll found that “A bipartisan majority of seniors on Medicare Advantage are satisfied with their coverage” – 94%!  It is hard to think of any other federal program that could earn that level of satisfaction.

The program is obviously popular, yet Democrats want to weaken this coverage option. Why?

Because Medicare Advantage is private coverage that makes traditional Medicare look bad by comparison. Since Medicare Advantage plans compete for beneficiaries’ business, they often offer additional benefits at low or no additional cost to enrollees. More for less is something government-run Medicare can’t match.

A couple of desperate Democrats even introduced legislation to ban the term “Medicare” in health care plans offered by private insurers. They argue the name is being used to “trick seniors” into enrolling in Medicare Advantage instead of government Medicare. They even want to rename Medicare Advantage “Alternative Private Health Plan.”  

But a name won’t help.  Just ask the 65 million enrollees who spent countless hours doing side-by-side comparisons and chose the better health plan coverage in every single region of America.  And if we are renaming things, how about calling original Medicare “Antiquated Bureaucratic Health Plan”?

Democrats have a good reason to be alarmed by the popularity of Medicare Advantage.  Ultimately, they want to force everyone into government run healthcare – even if it’s substandard compared to what’s available from private insurers. For example, Washington state’s public option program – Cascade Care and Cascade Select – has been failing miserably from the start and ought to serve as a “canary in the mines” for a federal program.

The reimbursement rates doctors and hospitals receive are roughly 14% less than other health plans, a sizeable pay cut for anyone to weather, and had 11% higher premiums than private plans on the insurance marketplace.  No wonder the state is having to force providers to accept its plans.

The Democrats and their head-in-the-sand approach to Medicare insolvency, and their ideologically driven opposition to Medicare Advantage is a recipe for disaster.

Dr. Madrigal has been a physician in the Highland Lakes Area for 19 years. She has her own medical practice where she treats people with cancer for free, gives a discount to teachers and preachers and still makes house calls. Dr. Madrigal is also the Burnet County Health Authority, and the Medical Director for Marble Falls and Horseshoe Bay Fire Departments as well as the MFHS EMT program.