Since ObamaCare passed, congressional Democrats and the White House have claimed that $500 billion in Medicare cuts will help balance the Medicare budget AND help pay for “reform.” This is, of course, not possible.
It can be used for one or the other, but it can’t be used for both. During a hearing of the House Energy and Commerce Health Subcommittee, the Secretary of HHS was asked point blank about this kind of double-counting:
What’s the $500 billion in cuts for? Preserving Medicare or funding the health-care law?
Sebelius calmly replied, “Both.â€? Here’s the scary thing. It’s probable that Sebelius is, like most progressives, so illiterate about economics that she actually believes it is indeed possible to do both. Watch it and weep:
[via Daily Caller]
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It is a little hard to get the thread of the dialogue since the Republican Congressman gives Ms. Sibelius so little time to respond and cuts her off, but she appears to be saying that reductions in the growth of the wasteful Medicare Advantage program cut the Medicare growth rate and thus extend the solvency of the fund. It is true that as an accounting matter under unified government accounting the full amount of trust fund savings cannot be counted towards the cost of funding healthreform. That is why the official CBO cost estimates for healthreform do no such thing. They don’t engage in any “double counting.” Even Representative Paul Ryan admits that:http://voices.washingtonpost.com/ezra-klein/2010/03/the_true_cost_of_the_health-ca.html
So the accusation about “double counting” goes to past Democratic political rhetoric, but has nothing to do with the official cost scoring of the healthcare reform law.
Perhaps if the Congressman had given Ms. Sibelius enough time to explain that would have come out in the testimony. But getting the soundbite for use in the echo chamber was too important for that.
Posted 05 Mar 2011 at 10:34 am ¶They don’t engage in any “double counting.”
Nice try, but no sale. They’ve been using this gimmick all along. In the Klein interview to which you link, Ryan confirms that the Dems have indeed been engaging in double counting: “You’re counting these premiums for this benefit as offsets for another spending project … That’s double counting.”
If you’re interested in what Ryan actually thinks on ObamaCare’s math, and his views are not flattering, watch this video.
Posted 05 Mar 2011 at 10:36 am ¶I don’t know the “you” to which Mr. Ryan is referring. Nor do I know the identity of the “they” who supposedly “have been using this gimmick all along.” Perhaps the reference is to Mr. Strawman.
The key question is whether the official CBO cost estimates upon which health reform is based rely on this “double counting” of savings from reducing the rate of growth of the wasteful Medicare Advantage program. The answer is “no,” as Douglas Elmendorf has repeatedly said. And that is precisely what Ryan admits to in the Klein interview:
Q: “But insofar as the double counting goes, the double counting is an issue of how some Democrats are talking about this. And I agree with you. Saying that the money will do two things at once is out of line. But what I want to make sure is clarified here is that the numbers people are using from CBO are not afflicted by that rhetorical overreach. When CBO says the bill will save this much money, it really will, at least according to the best estimates.”
PR: “I’m not disagreeing with that. “
Posted 05 Mar 2011 at 1:36 pm ¶NYP:
That the CBO was gamed should be clear by now, on SOOO many levels. Their inputs were based on political numbers. That’s not the same thing as the world of numbers you and I are used to. The OMA (Office of Medicare Actuary) already busted Sebelius’ chops over these BS numbers from the CBO, the failure to include the so-called “doc fix” in the official tally related to whether or not it was a budget buster, and the failures of coverage, et al.
Posted 16 Mar 2011 at 10:36 am ¶You have now abandoned the specific “Medicare was double counted” accusation. Instead, you nebulously claim that the entire non-partisan CBO analysis was “gamed.”. The point about the “doc fix” is not well taken. That expenditure must be undertaken regardless of whether health reform is implemented in its current form or in some speculative GOP version, or if nothing whatsoever is done and we continue with the current system. As for Rick Foster’s comments, although they were not directed to the specific CBO analysis, he is a serious person and not a hack, and, although I disagree with him, he deserves to be taken seriously. However, his doubts about the feasibility of cost reduction apply with equal force to the proposed GOP plans, particularly the Paul Ryan roadmap.
Posted 16 Mar 2011 at 9:13 pm ¶I didn’t “abandon” anything, but merely added that the CBOs shifting numbers are hardly reliable, and that double counting as seen in Medicare is hardly unexpected. After all, funny numbers are showing up in much of the reports.
And, it is not “nebulous” to understand that the CBOs inputs can only be–by LAW–those provided by politicians and some very unrealistic assumptions based more on politics than proper counting. That the government has funny money accounting methodology is legendary, and I was merely pointing out that unlike the CBO, the OMA cannot be gamed quite so handily just because Pelosi and others ignore their quite numerous detractors and say “behold–healthcare mandates for all!
Quite honestly, there are dozens of problems here, but the overarching one is that, paraphrasing blogger Political Math, it’s somewhat disconcerting to see people claim that spending two trillion and climbing is the proximate way to reduce the deficit, when the other side of the ledger has the non-descretionary budget locked in place by force of law and mulish habit–about 75% of it.
You’ll at least forgive me if I don’t believe in magic. Catron is in the right here, but since you don’t take his word, I’ll not be adding a link festival here, and you are now welcome to research this on your own.
The “Doc Fix” problem/fallback claim is extremely disingenious. The common retort is that it is separate, geared to stay in place from before anyhow, and therefore is “off budget” from the specific CBO considerations of O-Care. The problem with this pedantic matra is that the whole ISSUE of O-care was to FIX issues like this, so as not to have to continue bribing docs with money who’d otherwise drop out of the Medicare program when the benefits got pared down in reimbursement, et al.
In any case, the problem of “Dox Fix” not being part of the “official” O-Care considerations is absurd in its own right, even if the claim is that it is a separate piece of legislation or 15 or 20 separate pieces of legislation. Matters not. The purpose of “holding down costs”, which I assume the O-Care cheerleaders are to the moment still claiming, was one of the pitches for this garbage and glop.
The “Dox Fix” is not even the main problem, but really just an example. The problems with O-Care would fill 10 blackboards. Indeed, I think Catron has another post in this regard that address but some of those problems.
Posted 18 Mar 2011 at 11:45 am ¶1. I would be happy to amend my previous comment so that instead of saying that you had “abandoned” any attempt to defend the “Medicare double counting” meme, I instead say that you have “decided not to make any attempt whatsoever to defend the ‘Medicare double counting’ meme.:
Posted 18 Mar 2011 at 8:44 pm ¶2. I have not seen a single substantive (or, for that matter, procedural) criticism of the CBO healthcare projections that stands up to scrutiny. Not one.
3. As for the “doc fix” issue, I will try again. 1) If healthcare reform is repealed tomorrow, the cost of the “doc fix” will be precisely the same as it would be if healthcare reform is implemented on schedule. 2) If healthcare reform is replaced tomorrow by some currently inchoate Republican proposal, the the cost of the “doc fix” will be precisely the same as it would be if healthcare reform is implemented on schedule. So criticizing CBO for not including the cost of a separate policy that would exist completely irrespective of the new law, is simply silly. It makes no sense to add future measures to correct the mistakes of a Republican law from 1997 into the cost projections of a Democratic law from 2010.
The trouble with the doc fix is that the claim that ObamaCare would be deficit neutral presupposed that there would be no doc fix. i.e. Obamacare is only deficit neutral if the doc fix was not passed.
The CBO is required to take into account only the proposed bill and passed law. The doc fix was to expire, and therefore the calculations include the savings that would have been realized if there was no doc fix, and this number was deducted from the cost of obamacare to render it deficit neutral.
The reality is that a doc fix was likely to happen anyway, but the claim that obamacare was deficit neutral was disingenuous. it is not a criticism of the CBO, per se, it is a criticism of all of those clowns who claimed, with a straight face, that this was a zero sum game.
Posted 21 Mar 2011 at 5:11 pm ¶NYP:
Thanks for the missive.
1) Good, as Catron has the matter covered. Nothing needed from me in this regard.
2) Please, they are legion, and growing. And on that matter, which CBO projection are you defending in any case, the one that says one trillion smackers is ever-so-easy to handle in the magical accounting, or the one that now sourly admits to a tad more might be difficult–like the new projection of 2 trillion in but one of the many “whoopsies.”
There are many to choose from, one of the most glaring being the notion that a rich harvest of money will inflow into the system for reimbursement that in turn will help small business purchase, now that we have…the use of forc…err….mandates, to force the issue. The problem here of course is that with 1000 waivers and counting, it certainly is worth asking where the dough will come from if everyone and their granny and more than a few states get entire exemptions for this glop
3) If the GOP made some “inchoate” measure, then yes, we’re stuck with the same Monty we had before. I’m not a party person so much as a person interested in long term fiscal responsibility. That something is already “in progress” as Ezra Klein and other cheerleaders hogging the field have breathlessly stated, is disingenuous for the claim of money saving if the plan is to “pay off” the docs in hope that the issue will be settled in the main bill once and for all. Maybe sometime in the year 2045. The O-Care Bill came riding in a white hat to town proclaiming massive savings for all, both personal and at federal levels. As FactCheck has noted, on the personal front this turns out to be absurdist.
O-Care was supposed to be so comprehensive in its thick layers of glop and dry slop thicker than the Manhattan phone directory that we were told it took account of ALL contingencies.
This was, after all, the reason it had to be so darn long and Pelosi smiled a sardonic grin while telling us we had to pass it first to find out about its magical contents of healing powers.
I’m guessing using history as the template–not unfairly, in my defense–that little budgetary progress will made on this front. But the mantra is disingenuous.
Back to the Doc Fix: One cannot defend one’s own lack of responsibility under the mantra of “reigning in costs” if you don’t take account to what is basically a payoff or even mere continuation of a current payout in order to make sure everyone stays on board.
Many people, apparently pundits included, are unaware that the Medicare cuts that are supposed to PAY for Obamacare’s entitlement spending are of the same type as the physician-fee cuts they now want to assume away because the “Doc Fix” is officially on some “other” portion of the budget.
Laughable, at best.
Also, the whole sordid history of massive cost overruns regarding MERELY the rather LIMITED aspect and coverage of Medicare (which has the advantage of pulling dough from the young and healthy in what amounts to a generational wealth transfer on behalf of the frost tops, so you’d think it would always run great) demonstrates massive underestimation, in some cases for some services by magnitudes of difference.
That is reality, and that’s almost never the glib assessments of politicians of any stripe.
This site does not support linkages and scans it as spam, but I’d point you to a blogger calling himself Political Math, and check out his stuff.
See also the rest of Catron’s site, and that of William Jacobson’s Legal Insurrection. All of the above is answered and there’s a rich harvest of gems in those places alone.
Thanks for your attention to this. I’ll give you that you know which things to key in on.
On the “Toldya So” article I have on my own site, linked via my name, I have many of these same references.
It would be one thing if the “Doc Fix”, which initially got the lion’s share of attention in these matters, was the ONLY thing causing a spillover from O-Care spending bursting its banks.
Alas, it’s not. That’s merely the start. Would that things were as simple as some suggest.
Posted 21 Mar 2011 at 8:25 pm ¶Rich:
You make a good point. However:
O-Care is not deficit neutral regardless of the exact status, expense, and very existence of the so-called “Doc Fix.”
The CBO’s numbers are sheer bunk, as many have demonstrated, and based on some really wild and politically unrealistic numbers provided by politicians. The “Doc Fix” is just the tip of this soiled, discolored iceberg hiding under the murky waters.
Posted 22 Mar 2011 at 9:16 am ¶Post a Comment