How to slash Medicare funding (surreptitiiously and in plain sight)

[MrsSmith]

nightrain  (1000+ posts)        Sat Sep-12-09 12:37 PM
Original message

How to slash Medicare funding (surreptitiiously(sic) and in plain sight) 
 http://seminal.firedoglake.com/diary/8062






....Suppose you're Pete Peterson, and you've spent your career trying to slash America's "entitlement" programs, and you figured out a way to make drastic cuts in Medicare under the guise of "health care reform."

In that hypothetical, your major goal would be to extract hundreds of billions of dollars from the Medicare payment system, and then build in a politically shielded mechanism to extract hundreds of billions more if the initial cuts didn't sufficiently reduce Medicare's hit on the budget.

You'd have to package this carefully, because if you simply announced you wanted to slash Medicare by perhaps a trillion dollars or more over the next decade or so, you'd get slaughtered by AARP and earn the wrath of liberal Democrats and particularly seniors, the majority of whom tend to vote Democratic, or at least they used to.

So you'd talk about eliminating "waste, fraud and abuse" in the system. Few would believe there's much hope in that, so you'd add the idea of changing the provider payment incentives to get equal or better care by changing how providers practice medicine. You'd talk about "bending the cost curve" and warn folks that unless we did something dramatic, the Medicare deficits would overwhelm the federal budget and dominate the GDP.

It would be useful to have bipartisan cover for the risks of incurring seniors' wrath, but since the Republicans would be unlikely to participate openly in such a scheme and would rather use it to scare seniors, you probably couldn't count of them. So you'd settle for a small, manageable "bipartisan" group you could more easily control and which would provide at least temporary cover while you put the package together.

Of course, the core of the Democratic Party would never stand for doing this in lieu of pursuing universal coverage, let alone doing it alone and accepting the risks. But you might be able to convince them you were trying to enact broader "health care reform" and then slip the Medicare package inside the broader effort. That would get the Democrats, including the reform-minded progressives, fully engaged in the details of "reform" while continuing to move the main Medicare piece through the more controlled "gang of six."

Part of the Medicare savings would have to come from reducing subsidies for Medicare Advantage insurers and providers. But to make that acceptable to insurers, you'd offer a deal to AHIP that they'd make up for the losses by getting millions of new customers, which would come from the mandates the "reformists" would impose in pursuit of universal coverage. Once Karen Ignagni signed off on this deal (as she did last spring), and sold it as "we accept no prior conditions in exchange for mandates," a major piece would be in place.

That would leave only the difficult piece where you ease the Democrats, and roll the progressives, so that they bought the whole "incremental" argument. You'd sell a package that included some expansion in coverage but wasn't really reform. And since expansion wasn't your priority in the first place, you'd signal in the President's speech that (1) you had to keep costs under about $900 billion and (2) new revenues could only come from within the health sector.

You'd have the President demand these two arbitrary limits in a national speech to make them hard to overturn. Of course, neither limit had any intrinsic merits; in fact if you wanted true reforms and universality, you'd initially have to find major revenues outside the system, just as the House had done, until the potential savings you hoped to achieve could materialize (or not) within the sector. But if the President set out these limits, and most Democrats didn't immediately scream, you'd be home free.

As final negotiations moved ahead, Progressive would realize they'd been had. They'd watch in horror as the $900 billion for expansion and affordability got cut down to $800 billion and then $700 billion as the WH originally suggested, exacerbating the risks their yes votes would force the uninsured to purchase junk insurance at prices they couldn't afford but their no votes

So there it is: the Pete Petersons would get drastic trillion dollar cuts in Medicare, while Democrats tried to hide from seniors the fact they've been asked to risk benefit cuts to fund a questionable expansion of coverage which, after all, was only a cover for hacking Medicare. It's a neat trick.

And all that stuff about the "public health insurance option" and co-ops and/or triggers? Nice diversion, but gosh, we just don't have the votes in the Senate.

All of this was done in plain sight. This was never multidimensional chess. It was just the simple card game of gin. You just had to look at the cards in a different way.