According to CNNMoney, the median cost of living in private nursing homes and assisted living facilities has ballooned by 24 percent and 23 percent, respectively, over the last five years. The median annual cost of private nursing home care is now $83,950 — almost two and half times the mean tuition at private not-for-profit colleges in 2010-2011.

Semi-private room costs in nursing homes have risen to $75,405 per year, and even a stay at an assisted living facility — where patients do not receive anywhere near the level of care that they would at a private nursing home — now tends to cost over $41,000 per year. As Bob Bua, vice president of long-term care provider Genworth, explained, employees at nursing homes “rarely get pay decreases, food rarely costs less, rent rarely goes down — it’s an ever-increasing cycle.”

The CNNMoney article points out that less costly alternatives include hiring home health care aides and other live-in assistance. The median price for those services have only risen at about one percent per year over the last half decade to about $44,000 annually. But considering health aide salary data released last month, even that comparatively low price is a figure that is greatly inflated by organizations providing assistance services to the elderly. Home health aid — the fastest-growing job in America — pays less than $10 per hour, meaning that a full-time worker makes only around $20,000 per year.

These new numbers underscore the financial and medical strain put on elderly Americans due to the ever-increasing cost of health care services. Despite generous coverage under Medicare, high out-of-pocket costs bankrupt one in four American seniors because medical services themselves cost so much money. And more than half of Americans will delay their retirement so as not to lose health benefits — a consequence of America’s entrenched system of employer-sponsored insurance.

The price of brand-name drugs has skyrocketed over the past several years, leading increasing numbers of Americans to switch over to cheaper generic drugs. But even those generic drugs are also increasingly costing Americans more money, as chain pharmacies across the country hike their prices to charge up to 18 times the drugs’ original cost. There’s one clear winner in this equation: the giant pharmaceutical companies that are raking in the profits.

Over the past decade, the 11 largest global drug companies reaped about $711 billion in profits, according to a new analysis from the Health Care for America Now (HCAN) advocacy group. In 2012 alone, the drug companies’ annual profits totaled nearly $84 billion. The organization’s analysis credits much of these profits to the federal policy that prevents Medicare from negotiating directly with drug companies — which allows Big Pharma to price gouge the government program’s prescription drug benefit, known as Medicare Part D:

Medicare’s prescription drug coverage is essential for seniors — and since Obamacare has helped ensure that more prescription drugs are now covered under Medicare Part D, millions of seniors have saved $6 billion on the medication they need. But, since Medicare is unable to negotiate bulk purchasing discounts, Big Pharma continues to overcharge the federal program for those drugs. HCAN points out that pharmaceutical profits soared around 2006, when Medicare Part D was first put in place.

Pharmaceutical companies often claim their huge profits are necessary because that money goes toward innovative drug research and development. But one recent study found that drug companies actually spend 19 times more on advertising their products than they do on investing resources to develop new ones. And some areas of scientific research, like the development of new vaccines to replace some old antibiotics that have become increasingly less effective over time, have largely stalled because Big Pharma isn’t as willing to invest money in less-profitable ventures.

While companies should obviously make some kind of profit from their products, HCAN points out that Big Pharma’s prices far exceed what people in other countries are paying for the exact same drugs. The United States’ per capita drug spending is about 40 percent higher than in Canada’s, 75 percent higher than Japan’s, and nearly three times higher than Denmark’s.

During an appearance on Fox and Friends Friday morning, Fox News contributor and legal analyst Peter Johnson, Jr. claimed that Medicare beneficiaries who are losing access to critical medical services as a result of sequestration “ain’t seen nothing yet,” as Obamacare will kill off far more Americans in the next ten years.

During a segment discussing how the budget sequester’s two percent cut to Medicare is forcing cancer clinics to deny chemotherapy to thousands of beneficiaries, Johnson told host Steve Doocy that elderly Americans should expect a lot more bad news in the coming decade as a direct consequence of the health care law:

DOOCY: This story is going to disturb you. Cancer clinics across this country are turning away thousands of Medicare patients in need of chemotherapy. You can blame the sequester. Is there more to come? Peter Johnson, Jr. has a prescription for truth. Peter, what is this about?

JOHNSON: This is about people dying as a result of Obamacare and as a result of the sequester. What the oncology association is saying is that thousands of chemotherapy patients who should have received their treatments, their benefits under Medicare, will not based on a 2 percent reduction under the sequester. What they fail to understand — and maybe they do and they don’t want to discuss it at this point — is that over the next ten years, 2013 to 2023, under Obamacare, there will be a $716 billion reduction [to Medicare] in Obamacare. We’re talking about a $3 billion reduction in the sequester now and the $3 billion reduction in Obamacare –

DOOCY: This is a preview of coming awful things.

JOHNSON: You haven’t seen anything yet. You ain’t seen nothing yet.

Johnson’s conflation of the sequester’s ham-fisted spending cuts with Obamacare’s Medicare savings demonstrates a complete misunderstanding of the sequester, Obamacare, and how federal budgeting works. Sequestration is causing cancer clinics to turn people away because they can’t afford to keep providing expensive chemotherapy drugs to patients in the face of a two percent cut to Medicare Part B that has to come entirely out of clinics’ overhead funding — making the sequester cut more akin to a double-digit pay cut. Obamacare’s $716 billion in Medicare savings come from reducing historically excessive payments to providers that service private Medicare Advantage plans, meaning that it doesn’t affect benefits. Conservatives have consistently fear-mongered over those savings despite including them in their budgets.

Later on in the program, Johnson also revived the widely debunked claim that Obamacare has “death panels” — a claim that is so patently false that Politifact named it 2009′s “Lie of the Year.”

In the aftermath of Congress’ failure to reach a deal averting the sequester, President Obama described the automatic spending cuts as foolhardy, warning, “The pain will be real. The longer these cuts are in place, the greater the damage.” Those words are now coming to fruition, as local cancer clinics all across America are being forced to turn away thousands of senior citizens on Medicare and deny them their chemotherapy treatments as a consequence of federal budget cuts.

The Washington Post’s Sarah Kliff reports that even the sequester’s relatively mild two percent cut to Medicare is forcing clinics to choose between providing care to patients, absorbing debilitating financial losses, or downsizing medical staff. Faced with those unsavory choices, clinics like North Shore Hematology Oncology Associates in New York are refusing to see as many as 5,000 of their Medicare patients:

Medications for seniors are usually covered under the optional Medicare Part D, which includes private insurance. But because cancer drugs must be administered by a physician, they are among a handful of pharmaceuticals paid for by Part B, which covers doctor visits and is subject to the sequester cut.

The federal government typically pays community oncologists for the average sales price of a chemotherapy drug, plus 6 percent to cover the cost of storing and administering the medication.

Since oncologists cannot change the drug prices, they argue that the entire 2 percent cut will have to come out of that 6 percent overhead. That would make it more akin to a double-digit pay cut.

“If you get cut on the service side, you can either absorb it or make do with fewer nurses,” said Ted Okon, director of the Community Oncology Alliance, which advocates for hundreds of cancer clinics nationwide. “This is a drug that we’re purchasing. The costs don’t change and you can’t do without it. There isn’t really wiggle room.” [...]

An analysis prepared by [the Center for Cancer and Blood Disorders director Ralph Boccia's] clinic estimates that, if the full 2 percent cut takes effect, between 50 and 70 percent of the drugs it administers would become money losers.

Doctors at the affected clinics have been warning their patients about the consequences of the sequester for weeks, starkly noting that the choice is between curtailing services or shutting down completely. A South Carolina oncologist with the Charleston Cancer Center told Kliff, “We don’t sugar-coat things, we’re cancer doctors. We tell [patients] that if we don’t go this course, it’s just a matter of time before we go out of business.” Patients seeking to continue their treatments will have to go to larger hospitals, where their out-of-pocket costs for the pricey chemotherapy drugs will be substantially higher.

As budget sequestration goes into effect, its ill effects are increasingly taking tangible form, with everything from health care services to aviation towers being forced to shut down due to insufficient funding.

As the health reform law approaches its third birthday, Obama Administration officials are noting that one of its provisions has already helped seniors on Medicare save $6.1 billion on their prescription drug costs.

Obamacare ensures that more prescription drugs are covered under Medicare by closing the “donut hole” coverage gap. Even as the cost of prescription drugs has continued to rise, the health law gives discounts to Medicare beneficiaries so seniors continue to be able to afford the medication they need — one of its most popular provisions. On Thursday, HHS Secretary Kathleen Sebelius announced that more than 6.3 million Americans in the Medicare program have saved more than $6 billion on prescription drugs.

Since the Affordable Care Act first began phasing in reforms to Medicare’s drug coverage in 2010, the recorded savings for seniors have been steadily growing. And according to new estimates from the Congressional Budget Office (CBO), it won’t cost as much to close the donut hole’s coverage gap as initial estimates predicted. Ultimately, making drugs more affordable means that people will take them more regularly, ensuring seniors stay healthy and their medical costs are lower. In fact, the estimated 90 million Americans who don’t take their medications as directed represent the biggest root of wasteful health spending in the United States.

A full 90 percent of seniors with Medicare plans are satisfied with the prescription drug coverage they can access through the program, largely because of the savings they’re now experiencing. And those savings are likely to increase. This year, Obamacare increases Medicare’s prescription drug discounts to about 52 percent of the cost of most brand name drugs and 21 percent of the cost of covered generic drugs.

As Republicans push the country toward draconian spending cuts, it’s important to remember the uncertainty built into the debt projections that the GOP touts to justify their policies. Health care spending is a big part of this: Medicare is one of the biggest single drivers of long-term debt, but that doesn’t necessarily mean we need to cut the program’s budget.

In fact, between 2010 and 2013, the Congressional Budget Office’s projections of how much the program would spend over the next decade dropped by $500 billion — not because lawmakers cut any spending, but simply because the growth of health care costs in the markets as a whole unexpectedly slowed after 2008. The Washington Post’s Sarah Kliff dug a chart out of the White House’s annual Economic Report of the President that drives home what a game-changer it would be if that slow-down sticks.

The blue line below represents the projection of Medicare’s spending made in the 2012 Medicare Trustees report, based on current law. The dotted orange line is Medicare’s spending if health care cost growth holds to its trend since 2008:

If the past few years turn out to be the new norm, Medicare will stay essentially flat as a share of the economy going forward. In which case, the problem of Medicare spending — and with it, much of our long-term debt problem — has already been solved. This is something CBO wouldn’t have picked up on yet, precisely because their method for projecting health care costs rests on the assumption that trends over the last two decades hold roughly steady.
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With the release of Rep. Paul Ryan’s (R-WI) latest budget for the House GOP, a number of commentators are asking why the plan resurrects the idea of privatizing and imposing premium support on Medicare, even after the GOP just lost a presidential election in which that very proposal was a major sticking point.

MSNBC’s Chuck Todd brought up the matter Tuesday morning with Rep. Steve Daines (R-MT), and none other than Fox News’ Chris Wallace put the question to Ryan himself this past Sunday. Ryan’s response was basically that while he and Mitt Romney lost the general vote, they won the vote that actually matters:

CHRIS WALLACE: Now, you know, I don’t have to tell you, this was a big issue in the campaign, between Romney-Ryan versus Obama-Biden. They think they won and they think that’s one of the reasons they won. And there are, Congressman, a lot of independent strategists that say if you put this into effect, the net effect economists will be that seniors will end up having to pay more a share of their health care costs.

PAUL RYAN: Well, first of all, it’s not a voucher. It’s premium support. Those are very different. […]

And I would argue against your premise that we lost this issue in the campaign. We won the senior vote. I did dozens of Medicare town hall meetings in states like Florida, explaining how these are the best reforms to save the shrinking Medicare program and we are confidently this is the way to go.

Daines repeated that talking point to Todd: “Remember, the President did not carry seniors. Mitt Romney carried seniors 56 to 44. So seniors understand the issues here. [Medicare] needs to be reformed, so that their children and grandchildren have that safety net.”

Setting aside the issues with Ryan’s proposal to “preserve” Medicare in this fashion, there’s a more fundamental problem with this argument: It cites the wrong senior vote.

Apparently, according to Ryan and Daines, the fact that Ryan and Romney clinched the senior vote is more significant than the fact that they lost the general vote because seniors are the ones who are actually on Medicare, and are presumably best positioned to judge any changes to the program. But the seniors Ryan and Romney won are current seniors — and, for every one of his budgets, Ryan has explicitly stated that current seniors will not be moved into his premium support system. For those 55 and above, “no changes whatsoever in Medicare.” So by his own logic and his own policies, Ryan actually needed to win current voters under 55 to claim a mandate.

According to exit polling, the 2012 GOP presidential ticket won voters 65 years old and older by 56 percent to 44 percent — Daines’ number. And they won the 45-64 vote by 51 to 47. So they got at least a little bit of the under 55 crowd. But they lost voters 30-44 by 45 to 52, and they lost voters 18-29 by a whopping 37 to 60. Given who would actually be living with the reality of Ryan’s schemes, it’s hard to interpret those numbers as a mandate.

Several weeks ago, the Center on Budget and Policy Priorities analyzed the latest budget outlook from the Congressional Budget Office, and found that Medicare’s projected spending between 2010 and 2020 had dropped by over $500 billion since CBO’s projections in 2010.

This was effectively free deficit reduction: no spending had to be cut or policies changed. Health care markets simply shifted in an unexpected way that slowed the growth of health care costs — and what Medicare is projected to spend to buy health care for seniors slowed accordingly.

The big question is whether this slow down is temporary or long-term. David Cutler and Nikhil Sahni took a closer look and found that CBO’s numbers assume the slow down is temporary. If that assumption is wrong, then Medicare could see $363 billion in additional savings by 2023.

Cutler and Sahni constructed the graph below using CBO data. The blue line shows CBO’s 2010 forecast of Medicare’s “excess” annual spending growth. (The increase in spending per beneficiary minus the increase in gross domestic product per capita.) The green line shows CBO’s 2013 forecast. As you can see, while the growth projected in 2013 undercuts what was projected in 2010, the lines re-converge after 2018:

Basically, CBO is projecting that excess spending growth will jump back from its recent average of -2.9 percent to 1.4 percent after 2018.

Cutler and Sahni raise several reasons why this projection could be mistaken, and why the changes we’ve seen will stick: Medicare and Medicaid are moving to reduce reimbursement rates; digital record-keeping and new business models are lowering administrative costs; more low-cost generic drugs are becoming available as patents end, allowing for low-cost generics); we’re turning to expensive and overused procedures less often; and many health care organizations are restructuring to deliver care more efficiently.

This is important because Medicare is the primary driver of CBO’ long-term debt projections. As a result, predicting our future debt levels is a very tricky business, something the Beltway would do well to remember as it’s been gripped by debt panic. Changes in health care markets may have quietly lowered Medicare’s future spending by levels that rival the deficit reduction in either the “fiscal cliff” deal or 2011 Budget Control Act — all without lawmakers reducing any of Medicare’s benefits.

Equally important, we may very well owe many of those market changes — especially lower reimbursement rates, digitized records, and delivery system efficiency — to the reforms and incentives built into Obamacare. If true, that would make the health care reform law a far larger deficit reducer than anyone, including the CBO, has given it credit for.