A rosy scenario government report that the recent heathcare overhaul will cut costs for Medicare is coming out today. An AP story on  it hails an $8 billion savings for Medicare, without noting any pain or suffering for beneficiaries. Alas, this appears not to be the whole story. 

Chris Jacobs of the Republican Policy Committee has written an email entitled “Setting the Facts Straight on Medicare” that takes a hard look at the claims. I thought I’d share some of Jacobs’s points and urge you to read the AP story with a critical eye. A few points from Jacobs:

 •·        The report implies that the Medicare cost containment provisions will be pain-free for beneficiaries.  However, the Medicare actuaries found that the provisions “are unlikely to be sustainable on a permanent annual basis,” as about 15 percent of hospitals and related Medicare providers could become unprofitable within ten years, “possibly jeopardizing access to care for beneficiaries.”  Likewise, the Congressional Budget Office concluded that many of the law’s major savings provisions “might be difficult to sustain for a long period,” and should not be expected actually to occur.

•·        The report once again claims that the health care law will extend the solvency of the Medicare trust fund.  However, the Congressional Budget Office found that the provisions “would not enhance the ability of the government to pay for future Medicare benefits,” and the Medicare actuaries also concluded that the Medicare savings “cannot be simultaneously used to finance other federal outlays and to extend the [Medicare] trust fund.”

•·        Perhaps unsurprisingly, the report does NOT attempt to quantify the impact of the more than $200 billion in Medicare Advantage cuts on beneficiaries.  However, the Medicare actuaries found that projected enrollment in Medicare Advantage plans would be cut in half as a result of the legislation, meaning the benefits to millions of seniors would change as a result of the legislation.  The Congressional Budget Office also found that extra benefits for seniors participating in Medicare Advantage would fall by an average of more than $800 per year by 2019 – making the changes for millions of seniors one for the worse.