Sunday, December 16, 2012

How The $700 Billion Cuts From Obamacare Will Impact Medicare

By B. Loughead
In August of 2012, then presidential candidate Governor Mitt Romney went on the offensive regarding President Obama's proposed $700 billion Medicare spending cuts. Although Vice-Presidential running mate Senator Paul Ryan of Wisconsin has stated that Medicare should be transformed and plans to cut $700 billion in future Medicare expenditures, Obamacare would cut roughly $716 billion over a period of 10 years. So there is now a great deal of speculation as to how the $700 billion in cuts under Obamacare is going to impact Medicare.
In order to get Obamacare to pass, President Obama proposed $700 billion in across-the-board cuts that were extremely arbitrary in nature. Medicare patients will see reduced reimbursement rates for services provided them regardless of how poorly or well these patients are treated by healthcare and medical services. Nearly $160 billion in cuts to Medicare Advantage plans will also be incurred over the next decade as well. This means that by 2017, seniors will be paying nearly $4,000 more for healthcare.
Even worse is the fact that it has been estimated that this increase in healthcare costs will eliminate roughly 4 million seniors from all Medicare Advantage plans over the 6-year period beginning in 2012 and ending in 2018. Hospital payment rates would also be slashed drastically as a result of these Obamacare cuts. According to the program's Chief Actuary, these cuts could jeopardize any senior's access to healthcare.
In addition to the above, it has been estimated that 15% of all assisted living facilities and hospitals will no longer take Medicare patients in the future in order to prevent potentially huge financial losses resulting from payment of Medicare premium rates. Additionally, it is speculated that 25% of these institutions will no longer be a part of the Medicare program as of 2030.
According to Charles Blahous, a Stanford University fellow who specializes in domestic economic policy research, the Medicare cuts involved with Obamacare won't be used as replenishment for Medicare benefit trust funds. The reality is that the money from these cuts will pay for a huge entitlement spending expansion. So another question arises. Where will this $700 billion plus in Medicare cuts actually come from?
A portion of them will come from the harsh, restrictive control over medical billing procedures. However, the worse part regarding this entire scenario is how seniors are going to suffer from these cuts. With so many of them now living on fixed incomes, it could be financially disastrous in the long run.

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