Friday, March 15, 2013

Could Obamacare make a grand bargain unnecessary?

Yesterday I wrote about why President Obama wants a grand bargain. Its all about rising health care costs combined with baby boomers' retirement and the effect all that will have on Medicare. At the same time, I wrote about the leverage the President has recently introduced into the budget negotiations by being willing to walk away from a deal.

Knowing that President Obama doesn't bluff, why would he be willing to walk away from something he's identified as so important?

The short answer might be that the Medicare costs controls included in Obamacare are being even more effective than was originally forecast. This morning Sarah Kliff wrote about an economic report released today by the White House. Included was a graph that showed the difference between prior projections for Medicare spending compared to projections if it grows at the same rate it has since 2009.
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As an example, the report included the fact that the level of hospital readmissions for Medicare patients (which is penalized via Obamacare) has dropped from around 19% to 17.8%.

Kliff's conclusion:
Either way, this data underscores how important the changes happening in our health-care system, right now, will be to the future of health-care spending. If they stick around, they could completely reorient the typical Washington discussion of Medicare as a budget-buster.

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