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New Medicare Trustees Report Demonstrates Republicans Can’t Repeal Bill Without Undermining Medicare Program

By Igor Volsky  

"New Medicare Trustees Report Demonstrates Republicans Can’t Repeal Bill Without Undermining Medicare Program"

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A new Medicare Trustees report finds that the Independent Payment Advisory Board [IPAB], the payment reform demonstration projects, and productivity improvements in the new health care law will save Medicare $8 billion by the end of 2011, and $575 billion over the next decade. The law will also extend the life of Medicare’s hospital fund (Medicare Part A) by 12 years, which will now remain sustainable through 2029.

This afternoon, during a conference call evaluating the new report, Robert Greenstein of the Center for Budget and Policy Priorities (CBPP), argued that should Republicans attempt to repeal all or portions of the health care law, the would significantly undermine the longevity of the Medicare program. Greenstein maintained that if the GOP becomes the governing party, it would be against their political interests to suspend IPAB and the payment reform demonstration projects — which the GOP has pledged to repeal:

GREENSTEIN: If the entire Affordable Care Act is repealed, that’s a different story, but then the Medicare trust fund finances would be in much worse shape. But assuming the bill remains in affect, I think that the fiscal pressures on the whole federal budget moving going are going to be so severe and Medicare plays such a central role in this, that it is really hard for me to imagine policymakers of either party…whoever is in the position of governing is going to desprately need to find efficiency savings in Medicare and it will be in their political interest…. to pursue whatever measures can devleop and produce savings, especially savings that result from payment and delivery system reforms, rather than from the more unpoular approch of cutting beneficiaries’ benefits and raising premiums.

Greestein also responded to the GOP’s claims that the trustees’ findings are contradicted by the CMS’s own actuary, Richard Foster, who has predicted that some of the savings from health care reform may not materialize. Under Foster’s more pessimistic analysis, only 60% of the projected savings would be realized. Consequently, the insolvency of the Medicare Trust Fund would be moved back to 2028 instead of 2029 and only half of the current shortfall would be closed (instead of four-fifth as the actuaries predict.)

“Under either conclusion, this is still a dramatic improvement.” “The most likely scenario probably lies in between those two.” But in their report, the trustees underscore the “the crucial importance of moving forward strongly with the pilots and the demos and the research and really running what results from that.”

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