The seven lies of health care

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The practice of national politics in America is a mixture of lies and truth—an ebullient broth of misinformation, misdirection, and hype coupled with some real issues and honest beliefs.  With the help of others, I would like to catalogue the many flavors of lies in the Washington political scene. The health care reform initiative is a rich example.  So, let’s start with one basic type of lie and see how that lie associates with seven other types.

Offering a Free Lunch: Offering a free lunch is the stock and trade of politicians. On Sept. 9, 2009, President Obama said “The only thing [my] plan would eliminate is the hundreds of billions of dollars in waste and fraud, as well as unwarranted subsidies in Medicare that go to insurance companies — subsidies that do everything to pad their profits but don’t improve the care of seniors….. Reducing the waste and inefficiency in Medicare and Medicaid will pay for most of [my] plan.”

Over an operating 10-year window (2014-2023) the Medicaid expansion and new subsidies in the Senate health care bill would cost $2.5 trillion.  See, according to our President, this is a free lunch paid for by reducing waste and inefficiency.

The reality is these costs are borne through tax increases and cuts to Medicare.  People lose money to offset to offset the new spending.

Hiding the Dirty Laundry: Congress must find money every few years to keep doctors under Medicare from taking a significant hair cut.  We call this the “doc fix.” The House originally provided several hundred billion in new spending over 10 years to address these payments, but no longer.  Got a deficit, deal with it later.

Committing to Promises that Future Congresses Will Not Keep: CBO certainly does not try to hide its skepticism over the new cuts to Medicare spending per beneficiary.  These bills would have yearly reductions in costs in Medicare of 10-15% annually starting in 2019.  Politically, this will not occur.  Just like with the doc fix, Congresses will need to scramble to find money.

The Medicare actuaries, in evaluating the House bill were even more explicit in to pointing to this sham. Because of the bill’s severe cuts to Medicare, “providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and might end their participation in the program (possibly jeopardizing access to care for beneficiaries).” Because Medicare cuts would likely have to be reduced to avoid jeopardizing access to care for seniors, the provisions “will likely result in significantly smaller actual savings” than assumed.

The purported cuts are not real. This Congress just wants to pass a headache to a future Congress.

Misleading About Who Gets the Cuts: The Senate and House bill also reduces payments to Medicare Advantage.  This will raise cost for the elderly if they want to keep their Medicare Advantage plans.  Saying these cuts are primarily directed at insurers is a way of misleading people.  In response, Medicare Advantage plans will reduce benefits or increase cost-sharing for beneficiaries.

Selectively Presenting Arguments: About half of the new spending will go for subsidies that, technically, are also sent to insurance companies.  So why did our President single out payments to insurers as cut under Medicare Advantage when far more will technically go to insurers under the new subsidies. It seems like he is selectively arguing the point.

Double Counting the Cuts: Sen. Harry Reid, speaking on the Senate floor in advance of the key cloture motion at 1 a.m. said:

“And it protects America’s oldest citizens by strengthening Medicare and extending its life by nearly a decade …

“This bill also strengthens our future by cutting our towering national deficit by as much as $1.3 trillion dollars over the next 20 years ….”

As many now know, the Senator double counted the cuts.  Honestly, the cuts are being used to offset the 2.5 trillion in new spending over a 10 year window – not to save to Medicare or increase its solvency.   CBO caught him on this.

Borrowing when Medicare is Going Insolvent: Putting aside the double counting lie, you still have to reflect on a basic point raised by the Reid statements: savings from to Medicare should go to Medicare. Medicare is going broke.  Medicare needs the money.

Lies of Many Flavors: You can see here how the basic lie of a free lunch weaves with many supporting lies.  Each fits its own category and adds its own effect to the brew. There is plenty of misleading statements from all sides. I just think we should start to label the categories like it is a toolkit we can use to observe political speech.

Nandan Kenkeremath is currently President of Leading Edge Policy & Strategy, LLC.