With Presidential Election Static, Senate Slips from GOP's Grip
The most frequent question I get is "what will the elections mean to Medicare and Medicaid?" We've said here the Republicans' only hope of repealing the Affordable Care Act and enacting entitlement reform comes from making President Obama a one-termer, maintaining their majority in the House, and retaking the Senate. At the moment the Presidential race remains largely unchanged, with Mitt Romney getting a disappointing bounce from the GOP convention; Republicans will likely hold the House, but their grip on retaking the US Senate is slipping -- and with it, any chance of ObamaCare repeal or major changes to Medicare and Medicaid.
Earlier this year it seemed a foregone conclusion that Democrats would lose the Senate, defending 23 of 33 seats up this year. But now it's anything but sure, with some wild developments in races thought over and in the books -- just look at Todd Akin's epic "legitimate rape" fail in Missouri, emperiling his shot to knock off Claire McCaskill, and in doing so, possibly control of the Senate.
BusinessWeek got the scoop when GOP master strategist Karl Rove gave a briefing at the Republican convention that gave the best picture yet on the Senate math. Republicans need four seats to retake the Senate, and Rove said he's hopeful the party can pick up three from Nebraska, North Dakota, Wisconsin and Virginia. Between New Mexico, Hawaii and Connecticut, he added, "we've got a shot to take at least one." That's political shorthand for "too close to call."
But Rove also painted a picture where the GOP remains the Senate minority party: if they lose in Maine (Charlie Summers is getting crushed by Independent Angus King) and Massachusetts (Senator Scott Brown is in a dogfight with liberal crusader Elizabeth Warren), where the Republican candidates face headwinds. "But we're gonna lose, either [Summers] or Scott Brown—we can't afford to lose both," Rove said ominously. "If we win both, we're in great shape. If we lose one, it starts to get a little bit edgy. If we lose two, we're in real difficulty."
While the Presidential race remains stuck, it's these "down-ticket" races that really matter in terms of the post-election outlook for Medicare and Medicaid. It doesn't appear Romney gave his GOP colleagues any help down-ticket with Paul Ryan's selection. So unless Akin and Brown manage to pull ahead -- and there's still two months left, folks -- it looks like the Dems may hold the Senate. In doing so, they may assure ObamaCare stays as the law of the land, and major reforms to Medicare and Medicaid unlikely.
Politics Distort Similarities Between RomneyCare, ObamaCare and RyanCare
I was quoted in Monday's New York Times story on the success private plans are having in Medicare, pointing out the similarities between RomneyCare, ObamaCare, and RyanCare -- Paul Ryan's proposal for Medicare reform, now receiving unprecedented scrutiny following his selection as Vice Presidential candidate. When you remove the distortion of election-year politics, it's easy to see the three approaches share the same DNA.
Only in an election year could you see a conservative advance a proposal for Medicare reform with a liberal pedigree and get demagogued for it. The same could be said for Obama -- a liberal advancing health reform with conservative concepts. Consider:
- RyanCare's premium support or vouchers resemble the subsidies of Romney's Massachusetts' health reform and Obama's Affordable Care Act. All three proposals have roots extending to President Clinton's and subsequent bipartisan entitlement reform commissions, as well as to conservative think tanks like the American Enterprise Institute and the Heritage Foundation.
- All three feature a government-regulated insurance exchange, modeled after Medicare Advantage and Part D, as the central marketplace where consumers will choose the coverage that fits best.
- All three feature critical insurance reforms and foster regulated competition among payers and providers at their core. To be clear, Ryan's second Medicare proposal with Senator Ron Wyden (D-OR) features much stronger consumer protections.
Medicare really wasn't a leading issue in the election; now it is with Ryan's selection, especially in senior-heavy swing states like Florida and Pennsylvania. Both camps are jockeying to define the other, with Ryan the Democrat's poster boy for "Medi-Scare" or "Medagoguery" tactics. An honest debate over Medicare is delusional in an election year -- but will be unavoidable in 2013 as the "fiscal cliff" looms and the deficit debate comes to the fore again.
My concern is that Democrats and Republicans will stake out positions during the election cycle that prevent them from having the thoughtful discussion the country needs about Medicare's future next year. We must first agree that Medicare in its current form is unsustainable. The most recent Medicare Trustee's report stated the Part A Trust Fund will be bankrupt in 2024 under a rosy outlook, and we know the program is a major contributor to deficit projections. We can't go on this way.
Ryan-Wyden lays out a carefully considered approach shown to be successful in Medicare Advantage and Part D. Without Ryan-Wyden's kind of structural reform, we have no hope of getting our debt under control. Ryan-Wyden was a significant improvement over "Ryan 1" -- his first, draconian Medicare reform proposal two years ago -- and it shows Wyden's liberal, former Gray Panthers fingerprints. It keeps traditional Medicare as an option, with heavily-regulated competition at its core. Ryan-Wyden is adequately funded whereas Ryan 1 pegged subsidy growth to inflation, which would result in a huge cost shift to beneficiaries. Ryan-Wyden's subsidies are pegged to the second-lowest bid or traditional Medicare, whichever is cheaper. Seniors who choose a plan above the benchmark would pay the difference, just like in Part D. It calls for the formation of a Medicare exchange modeled after www.Medicare.gov, and even adds a new catastrophic benefit, also like in Part D. It is inextricably related to both RomneyCare and ObamaCare.
The fundamental difference between the parties is what we'd do with the savings, and that's what elections are for. My hope is that it doesn't get so nasty that battle lines harden and Ryan-Wyden doesn't get its moment.
GOP Piling-on Begins on the Medicare Advantage Star Ratings Demo
House Republican Committee chairmen began to pile onto rising controversy around the $8.3 billion Medicare Advantage Star Ratings Demonstration this week, first brought to attention by the Government Accountability Office's study of the program commissioned by Senator Orrin Hatch (R-UT) in April.
In May, the American Action Forum — an influential conservative think tank here in DC — released a report authored by former Congressional Budget Office Chief Douglas Holtz-Eakin blasting the Stars Demo. "The system rewards beneficiaries for choosing those plans favored by the selected CMS criteria, rather than the plans that best meet their needs," said the report. It went on to say the program will actually serve to limit choice — and since counties with higher incomes will end up having higher-rated plans, it will have an adverse effect on low-income beneficiaries. "The goal of incentivizing quality health plans is legitimate and admirable; that goal will not be achieved by the rating structure currently being put into place," Holtz-Eakin wrote.
Last Friday House Ways and Means Committee Chairman Dave Camp (R-MI) weighed in with a nasty-gram to HHS Secretary Kathleen Sebelius demanding extensive additional information on the development of the Stars Demo. Camp wrote, "With its most recent report, GAO has determined HHS exceeded its legal authority to implement this demonstration, which calls into question all activities surrounding the development of the (Stars Demo)". Camp requested that Secretary Sebelius detail all communications with the "CMS Actuaries' office, the Office of Management and Budget, the White House, the Democratic National Committee, the Democratic Congressional Campaign Committee, the Democratic Senatorial Campaign Committee and" — wait for it — "Obama for America, which led the agency to take action related to the (Stars Demo)". Wait, wait — did he just say that? The Obama campaign directed CMS to launch this demo? Having worked in the agency I can tell you these guys are smoking something excluded from Part D coverage.
Join us Thursday for First in New Webinar series: Risk adjustment in the exchanges
On Thursday July 26th at 1pm ET we'll kick off our new webinar series, "Lessons from Medicare Advantage and Part D", a monthly webinar series around what we've learned in Medicare that can be applied to the exchanges and other aspects of health reform. We'll begin with a deep dive on risk adjustment in the exchanges.
Risk adjustment is the defining health care finance issue of the decade, and MA and Part D represent the largest experiments in risk adjustment on the planet. MA and Part D's risk adjustment system is the blueprint for ACOs, the exchanges, and a growing number of state Medicaid programs as well. We'll explore the risk adjustment provisions in the ACA and the final regulation, and apply what we've learned in the last 7 years to the future of health plan payment, with our partner Dr. Jack McCallum, CEO of GHG sister firm CenseoHealth. Bring your CFO, Chief Strategy Officer, CMO,Chief Marketing Officer, and your actuaries for a geektastic discussion on how to follow the money post-2013. In the coming months we'll examine other reform topics where the Medicare, Part D and Medicaid Dual Eligible experience shines a light: In early September: Distribution In and Around the Exchanges: Lessons from MA and Part D. We'll explore how individuals with subsidies and small groups will be sold the "metal" plans, especially in the Exchanges through Navigators and other impartial facilitators, to the deployment of brokers and sales management. Our focus will be on the Federally-Facilitated Exchange, which could operate in as many as 40 states, with updates on specific states as applicable. In late September: we'll explore the Nuts and Bolts of the Federal Exchange: Lessons from MA and Part D. We'll focus on how the Federal Exchange will function from a 10,000-foot level perspective, where the plan interfaces are and the broad strokes of anticipated reporting requirements. In late October: Product Strategy in the Exchanges: Lessons from MA and Part D. How subsidies will work based on income determinations; a landscape view of where states are on accepting ACA Medicaid expansion dollars in the wake of the SCOTUS ruling. For Red States: what the new "near-Medicaid coverage gap" means in those states that refuse the ACA funds. We'll examine how to segment the market for Platinum, Gold, Silver, and Bronze plans, and the allowability of supplemental insurance products (like dental) in the exchanges. What existing commercial and government programs provider networks mean to product pricing and strategy. The imperative for a database of local individual claims to wargame product designs on. More to come. The scars on our collective backsides in Medicare the last 16 years provide some great "teachable moments" for the new world post-ACA. We look forward to the discussion.
Medicaid Mattered Most in the SCOTUS Decision
In all of the drama around the recent Supreme Court ruling on the Accountable Care Act (ACA) and the individual mandate, it was the Medicaid eligibility expansion ruling that mattered most. Hands-down, Medicaid was WAY more important: $1 TRILLION and 17 million Americans' access to health insurance is now at stake, potentially millions more when Medicaid maintenance of effort rules on states expire in 2014, and it's all red meat for Red State governors who will devour it at their own peril.
Red State governors will make a spectacle of throwing a middle finger at President Obama -- but it's the most vulnerable Americans and the most hardcore uninsured they're giving the shaft. Not to mention hospitals and other powerful provider organizations who would prefer Medicaid to bad debt. I'll say it here: the RedGovs' are bluffing for political gain and most of these jerks will fold before the election, ultimately taking the ACA expansion money in the face of an onslaught of local lobbying.
Why Medicaid mattered: SCOTUS essentially made it optional for a state to participate in ACA's $1 TRILLION Medicaid eligibility expansion to 133% of the poverty limit. The federal government is funding 100% of the expansion for the first three years, and will eventually scale back to match $9 to every $1 spent by states. According to the Center on Budget and Policy Priorities, the Feds would pay $931 billion of the cost of the Medicaid expansion through 2022 — while the states would be asked to chip in $73 billion, or about 7%. It's a great deal for cash-strapped Red States. If a state declines to participate in the coverage expansion, it will create a huge gap in coverage among the poor and near-poor, and will subject safety-net providers to more bad debt where there was supposed to be coverage.
The Republican governors of 5 states — Florida, Texas, Louisiana, Mississippi, and South Carolina — have declared they want nothing to do with the expansion. "The bottom line here is that Medicaid is a failed program," Texas Governor Rick Perry -- who claims 1.3 million long-term uninsured in his state -- said Monday on Fox News. "To expand this program is not unlike adding a thousand people to the Titanic."
Are we talking about the same Medicaid program? You know, the one that is the largest source of health insurance in Texas and the nation? Leaders of 6 other states are considering the same kamikaze mission. As of today, the scorecard looks like this:
Hell, No (5) -- FL, TX, LA, MS, SC
Probably Not (5) -- IA,MO, NE, NV, NJ, WI
Leaning Yes (3) -- AR, OR, RI
All-In (10) -- CA,CT, DE, DC, HI, IL, MD, MA, MN, VT, WA
Undecided (26) -- AL, AK, AZ, CO, GA, ID, IN, KS, KY, ME, MI, MT, NH, NM, NY, NC, ND, OH, OK, PA, SD, TN,
UT, VA, WV, WY
Publicly-traded health plans and hospitals and Wall Street itself are betting the RedGov's are chest-thumping too. WellPoint announced Monday it will spend almost $5 billion to purchase Amerigroup to buy a bigger stake in Medicaid expansion. "When you step back from all this, there are billions of dollars of federal money that are going to flow into the states. We think the states are going to need to take it," Amerigroup CEO James Carlson said following the announcement. Stocks for Amerigroup, Molina and Centene all jumped following the SCOTUS ruling, posting gains of 20+% this week.
Stocks for the largest chains of private, for-profit hospitals also shot up following SCOTUS, and the RedGovs' threats to withdraw from Medicaid have done little to drive them down. Hospitals expected to be another beneficiary of the Medicaid expansion -- in 2010, they paid out $39.3 billion — 5.8 percent of their total expenses — in uncompensated care.
I get the RedGovs' posturing but still hate them for it: rejecting the Medicaid expansion fits with their crusade to cut government, and a slam on Obama is catnip for their base. But the ringleader of the RedGovs, Florida Governor Rick Scott, is the former CEO of HCA, one of the biggest publicly-traded hospital chains in the nation. Texas' massive hospital districts and Louisiana's charity hospital system make for noisy, well-funded lobbying campaigns with intense turnout on the ground. The RedGovs will face the fury of a local lobbying campaign never before seen at the state level. Hospitals will say they're doomed to bad debt if RedGovs reject the coverage expansion. They'll remind the RedGovs that hospitals are among the biggest employers in most communities and will say that once-rock-solid jobs in their communities are now in peril. They will point out that without Medicaid expansion, many small safety-net and traditional providers of care to the underserved will cease to exist.
The Kaiser Family Foundation released a poll this week following the SCOTUS ruling, and it found 56% of Americans now say they would like to see the GOP stop their efforts to block the ACA's implementation and move on to other national problems. Solid majorities of voters of every political stripe say the decision won't impact whether or not they vote this November. That shows the RedGovs' politics on Medicaid expansion for what they are: opportunistic, fiscally irresponsible, cynical, and heartless. And they'll pay for it in November.
Medicare ACO's: Tool for Reducing Medicare costs or something more?
The June 18th blog by my colleague and friend William MacBain posed a valid question when he asked whether Medicare ACO's are a revolution in healthcare or a side show. My view--it's that and more. To the point that Medicare ACO's will probably have only a minor impact on overall Medicare expenditures, I totally agree but would argue that significantly reducing Medicare expenses is not the overriding goal of the CMS sponsored shared savings program. I believe the overriding goal is to stimulate provider change in how healhcare is priced, delivered and made accessible to those who need it.
To the question of whether Medicare ACO's are a sideshow, I would respond with yes but in a good way--meaning that ACO's, Medicare sponsored or not, have helped ramp up the level of dialogue and drawn attention to the reality that change is coming to the healthcare industry, that it will come in many forms and that ACO's are one model for implementing such change. ACo's are not the magic cure for what ails the healthcare industry but ACO's do begin to address some of the symptoms -- that is a good thing.
If Mandate Survives SCOTUS, Will GOP States Be Caught Flat-Footed on Exchanges?
I keynoted the Opal Events Medicare Executive Forum last week and stated there -- as I have here -- that I think there's slightly more than an even chance that SCOTUS will overturn the individual mandate in its ACA ruling later this month. The presentation raised an interesting question: if the mandate survives the Court, will the 26 GOP governors who filed suit be caught flat-footed on exchanges, and have a Federal fallback exchange jammed down their throats in 2014 for their inaction? Remember that the states must demonstrate to HHS this fall that they'll be ready to launch their exchanges by January 1, 2014, and that there are dozens of states waiting to see what the Court will decide before taking any action. Politico held a policy briefing Friday with a couple influential state regulators that argued at least a few of those red states are moving forward on exchanges.
The most heartening news for ACA supporters were remarks by Bill Hazel, Virginia's secretary of health and human resources. Virginia is in the vanguard of states opposing the law but nonetheless has been busy getting ready to open an exchange if the court doesn't strike down the measure."We've done a lot of the planning," he said, adding that Virginia is in the "weird position" of being in relatively good shape to launch its exchange while opposing the law. "Virginia's done it and we don't want to," he said.
One of the most difficult things for states to pull together even if they are enthusiastic about exchanges is the information technology required. "We are one of the handful of states that could probably pull the IT piece off" if the Court upholds the law, Hazel said. Hazel added that he thinks it's a mistake for states opposed to the law to sit idle and watch the federal government struggle to open exchanges to fill the gap. Amen to that. "There is a group of individuals who believe that the states should just stop all work now, default into a federal plan, and assume that the feds can't get it
done," Hazel said. "That's not a bet that I would recommend yet that the Governor take because there's been a tremendous amount of work at the federal level."
Ron Pollack, executive director of Families USA, a pro-ACA consumer group, also called Virginia an "important lesson" and added that states opposed to the law may be doing more to get ready for exchanges than many realize. The narrative in press coverage is that only a few more than a dozen states will be ready to open exchanges by 2014, an assessment he said is based on the relatively small number of states that have passed laws to open the marketplaces. But, he said, a more telling sign of readiness is the number of states that have gotten the first round of grants to set up exchanges: 34, according to Pollack.
"Behind the scenes there is work being done to set up exchanges," he said. Pollack added that it makes a significant difference that the federal government is willing to share in the work of opening state exchanges by entering into
partnership arrangements. Both Pollack and Joshua Sharfstein, Maryland's secretary of Health and Mental Hygiene, struck an upbeat tone when talking about the health law in sharp contrast to the mostly gloomy talk of late about implementation struggles. Sharfstein downplayed the difficulty of opening an exchange.
It appears — initially at least — that the Maryland and Virginia exchanges would not be markedly different, assuming the health law survives and they both open. Left-leaning states are thought to be more likely to drive a hard bargain with insurers by excluding those that don't offer relatively low rates. But Sharfstein says that's not in the cards right now at least; Maryland officials first want to get their exchange up and running for a while before they think about becoming an "active purchaser."
One state out of 26 doesn't make a trend but the hope is that Pollack is right and that 34 planning grants will be enough to break through GOP gubernatorial intransigence on exchanges. The clock is ticking, almost no matter what happens in the SCOTUS ruling this month.
Times Are A-Changin'...Get Your Team to the GHG Forum June 12-13
In response to client requests, GHG is holding its first-ever Client Forum June 12-13 in Washington. With so much change in the air in government programs, the Forum is the perfect opportunity to get your team focused on the road ahead.
This isn't a disjointed lineup of vendors selling from the podium like at your usual industry conference: the presenters are all GHG's elite subject-matter experts, and the agenda is designed to be a silo-busting deep dive for government programs executive teams, with downtime built-in to allow you and your team to process and plan ahead. If you want answers, this is your gathering.
Change is a constant in the government programs world, and most of the folks who call us for help are those who are too busy these days to do anything but react. We have a motto at GHG: you can't react your way to excellence. Take two days to join us, bring your team leaders, and learn about how to get ahead of what's coming.
Let's Just Say It: the GOP is the Problem
Two of Washington's most eminent political observers, Thomas E. Mann of the left-leaning Brookings Institution, and Norman J. Ornstein, resident scholar at the conservative American Enterprise Institute, published an awesome op-ed in today's Washington Post on the truly sorry state of our national politics. And they did something extraordinary: they courageously laid the blame squarely at the feet of a Republican Party that has become unhinged. They make the point that unless Americans reject ideological extremism at the polls this November, we'll get the dysfunctional government we deserve. And the two guys they blame most? Newt Gingrich, the architect of the politics of division and destruction that began with the Congressional GOP takeover in 1992, and Grover Norquist, the founder of Americans for Tax Reform who pioneered the "No New Taxes Pledge" that's become a litmus test for GOP candidates.
Some of Mann/Ornstein's bon mots:
"We have been studying Washington politics and Congress for more than 40 years, and never have we seen them this dysfunctional. In our past writings, we have criticized both parties when we believed it was warranted. Today, however, we have no choice but to acknowledge that the core of the problem lies with the Republican Party."
"The GOP has become an insurgent outlier in American politics. It is ideologically extreme; scornful of compromise; unmoved by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition. When one party moves this far from the mainstream, it makes it nearly impossible for the political system to deal constructively with the country's challenges."
"Both sides do it" or "There is plenty of blame to go around" are the traditional refuges for an American news media intent on proving its lack of bias, while political scientists prefer generality and neutrality when discussing partisan polarization. Many self-styled bipartisan groups, in their search for common ground, propose solutions that move both sides to the center, a strategy that is simply untenable when one side is so far out of reach."
"Today, thanks to the GOP, compromise has gone out the window in Washington. In the first two years of the Obama administration, nearly every presidential initiative met with vehement, rancorous and unanimous Republican opposition in the House and the Senate, followed by efforts to delegitimize the results and repeal the policies...And Republicans in the Senate have abused the confirmation process to block any and every nominee to posts such as the head of the Consumer Financial Protection Bureau, solely to keep laws that were legitimately enacted from being implemented."
"In the third and now fourth years of the Obama presidency, divided government has produced something closer to complete gridlock than we have ever seen in our time in Washington, with partisan divides even leading last year to America's first credit downgrade."
"Rank-and-file GOP voters endorse the strategy that the party's elites have adopted, eschewing compromise to solve problems and insisting on principle, even if it leads to gridlock. Democratic voters, by contrast, along with self-identified independents, are more likely to favor deal-making over deadlock."
"Democrats are hardly blameless, and they have their own extreme wing and their own predilection for hardball politics. But these tendencies do not routinely veer outside the normal bounds of robust politics. If anything, under the presidencies of Clinton and Obama, the Democrats have become more of a status-quo party. They are centrist protectors of government, reluctantly willing to revamp programs and trim retirement and health benefits to maintain its central commitments in the face of fiscal pressures."
"No doubt, Democrats were not exactly warm and fuzzy toward George W. Bush during his presidency. But recall that they worked hand in glove with the Republican president on the No Child Left Behind Act, provided crucial votes in the Senate for his tax cuts, joined with Republicans for all the steps taken after the Sept. 11, 2001, attacks and supplied the key votes for the Bush administration's financial bailout at the height of the economic crisis in 2008. The difference is striking."
"(P)olitical scientists Keith Poole and Howard Rosenthal, who have long tracked historical trends in political polarization, said their studies of congressional votes found that Republicans are now more conservative than they have been in more than a century. Their data show a dramatic uptick in polarization, mostly caused by the sharp rightward move of the GOP."
"If our democracy is to regain its health and vitality, the culture and ideological center of the Republican Party must change. In the short run, without a massive (and unlikely) across-the-board rejection of the GOP at the polls, that will not happen. If anything, Washington's ideological divide will probably grow after the 2012 elections."
It's a terrific column and a cautionary tale. As I've said before, our national politics are in a death spiral as we are losing our ability as a nation to deal with complex, expensive issues before us -- like long-overdue Medicare reform -- because of Republican obstructionism. I continue to believe the President will be narrowly re-elected but the GOP will hold the House, and we will face another 4 years of vitriolic gridlock. This will be our "Lost Decade" like the Japanese had in the 90s. And all because the Grand Old Party has lost its mind.
Medicare's Wobbly Solvency
The Medicare Trustees released their 2012 report this week on the fiscal health of our favorite program and concluded that Medicare's Part A Trust Fund won't run out of gas until 2024, the same finding as last year. That's welcome news -- but the conclusion rests on some shaky assumptions, and therefore the day of reckoning could come sooner.
Last year, the Trustees also predicted that the fund would become insolvent in 2024, five years ahead of its 2010 prediction of 2029 due to the slowdown in the economy and diminished tax receipts for Medicare. This report acknowledges no further erosion in the economy by the Trustees since last year's. The Part A Trust Fund has been paying out more than it has received since 2008. In 2011 alone, Medicare used $27.7 billion in trust fund assets to cover hospital insurance expenses.
The Trustees found that Medicare's Part SMI Trust Fund -- which covers Parts B and D -- is balanced and that general revenue is expected to cover the program's costs. A problem here is that expenses for Part B likely will be higher than the report predicts because the report factors in a more than 30% cut to physician reimbursement rates scheduled for 2013 under the SGR formula. Congress has passed several "doc fixes" since 2002 to offset the cuts scheduled under the SGR and is expected to continue to kick the can down the road.
Over the next 10 years the Part A Fund's expenditures will grow by an annual average of 5.3%, and its income will grow by 6%. The Trustees expect the Fund to have only enough revenue by 2024 to pay 87% of projected costs that year -- and even that conclusion is suspect as it's based on several assumptions that aren't realistic, including:
- A scheduled 31 percent pay cut for doctors in 2013, which Congress is almost certain to override and will inevitably use Part A funds to offset the cost. A permanent fix to the SGR costs almost a half-year of solvency to the Trust Fund;
- That the 2% across-the-board cut to Medicare resulting from the collapse of the Congressional Super-Committee (sequestration) can be sustained over the coming decade;
- That the U.S. Supreme Court will not overturn the entire ACA in June, the possibility of which seems remote but increased given the tenor of the Court's deliberations earlier this month;
- The trustees also said Medicare is on an unsustainable path over the long term that could cause expenditures to more than double as a percentage of GDP, from 3.7 percent now to 10.4 percent in 2086, under a worst-case scenario.
- The ACA is slated to reduce Medicare payments to hospitals and other providers, which lowers the trustees' estimate of program spending. CMS Chief Actuary Rick Foster writes that that is unrealistic, noting "the best available evidence indicates that most health care providers cannot improve their productivity to this degree — or even approach such a level — as a result of the labor-intensive nature of these services."
All of this calls into question whether we really have until 2024 before Medicare is upside down. The only thing we know for certain is that the program will be the biggest political hot potato in the Washington debates for the foreseeable future, and that program volatility is the "new normal."