Monday, January 7, 2013

Brace yourselves...Obama WILL cut Medicare spending

How do I know that President Obama will cut Medicare spending? Two reasons.

The first is because he already has. As we heard so much about in the recent presidential campaign, Obamacare reduced Medicare spending by $716 billion over 10 years.

And secondly, because he's promised to cut more.
Already, the reforms we passed in the health care law will reduce our deficit by $1 trillion. My approach would build on these reforms. We will reduce wasteful subsidies and erroneous payments. We will cut spending on prescription drugs by using Medicare’s purchasing power to drive greater efficiency and speed generic brands of medicine onto the market. We will work with governors of both parties to demand more efficiency and accountability from Medicaid.

We will change the way we pay for health care -– not by the procedure or the number of days spent in a hospital, but with new incentives for doctors and hospitals to prevent injuries and improve results. And we will slow the growth of Medicare costs by strengthening an independent commission of doctors, nurses, medical experts and consumers who will look at all the evidence and recommend the best ways to reduce unnecessary spending while protecting access to the services that seniors need.

Now, we believe the reforms we’ve proposed to strengthen Medicare and Medicaid will enable us to keep these commitments to our citizens while saving us $500 billion by 2023, and an additional $1 trillion in the decade after that. But if we’re wrong, and Medicare costs rise faster than we expect, then this approach will give the independent commission the authority to make additional savings by further improving Medicare.

But let me be absolutely clear: I will preserve these health care programs as a promise we make to each other in this society. I will not allow Medicare to become a voucher program that leaves seniors at the mercy of the insurance industry, with a shrinking benefit to pay for rising costs. I will not tell families with children who have disabilities that they have to fend for themselves. We will reform these programs, but we will not abandon the fundamental commitment this country has kept for generations.
This isn't a so-called "austerity" measure. Its about reining in the future costs of health care. All of the Republican plans (ie, vouchers, raising the eligibility age, etc) take those rising costs for granted and simply reduce how much of the tab the government will assume (leaving the rest for retirees to pick up).

That's where the real battle lines will be drawn. Its best we be clear about what the stakes are.


  1. This is one of those examples of how our media leans right. We don't talk about "efficiency measures," but about "cuts" when it comes to the social safety net. Why? To reduce the chances of actually making our social safety net more efficient and, then, cutting it. In this case the cuts would likely take the form of raising the eligibility age.

    I am for expanding the safety net, and part of that means making its implementation as efficient as possible.

  2. The 716 billion is a reduction in future planned baseline spending, right? Reminds me of my wife telling me when we get our credit card bill in the mail that she promises as a New Year's resolution to cut her future spending (she promises!)


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