Tuesday, November 9, 2010

Friday Roundtable: Kyl Talks GOP House Control, Medicare Reform & More

Posted By on Tue, Nov 9, 2010 at 12:35 PM

U.S. Sen. Jon Kyl stopped by Arizona Illustrated last week not to gloat about the GOP’s big takeover of the House of Representatives, but rather to tamp down expectations by reminding viewers that Republicans don’t control the U.S. Senate or the presidency.

Kyl’s spin: Don’t expect too much from the GOP until voters give them back the Senate and the presidency.

But Kyl’s response to a question about Medicare funding left us wondering just how committed the GOP really is to balancing the budget.

One of the GOP’s biggest attack lines during the recently completed campaign season was that Democrats had cut $500 billion from Medicare as part of the health-care reform package. It was one of the lines we heard over and over again from Republican Jesse Kelly in his campaign to unseat Democratic Congresswoman Gabrielle Giffords (which always struck us as odd, given that Kelly’s own long-term proposal was to get rid of Medicare and ask elderly Americans to buy health insurance in a private market so they'd be able to “get off the public dole”).

As Factcheck.org will tell you, Democrats didn’t actually cut $500 billion from Medicare; they reduced future expected expenditures over the next decade by $500 billion with a few reforms.

Whether those reforms will actually take place remains to be seen; some of them involve reducing payments to doctors and hospitals—a touchy move that’s been tried before and always reversed by Congress before it actually takes place.

But one big cost reduction—an estimated $136 million over 10 years, according to The New York Times—came from reducing the amount of money the federal government would spend on the Medicare Advantage program, an alternative to traditional Medicare that pays private insurance companies to provide coverage for elderly Americans.

The original idea behind Medicare Advantage was an admirable experiment: Let’s see if private insurers could provide better health-care coverage to seniors at

a lower cost than the government could through traditional Medicare.

Unfortunately, it turned out that, while popular (about one-fourth of all Medicare recipients are on Medicare Advantage), Medicare Advantage was not cheaper. It actually cost taxpayers about 14 percent more than traditional Medicare. That totaled an estimated $44 billion between 2004 and 2008, according to the Medicare Payment Advisory Commission. You can learn the details here.

The Democratic health-care reform plan works to rein in the future growth of spending for those plans by giving the government more leverage over the private insurers. And in the short run, it worked; The NYT reported earlier this year that many insurance companies actually dropped the cost of premiums for Medicare Advantage patients rather than lose the business altogether. (Read about it here.)

Rather than applaud this example of market forces in action, Kyl says the reductions were a big mistake, arguing that “people who didn’t like the private sector alternative were trying to make it less attractive.”

Kyl says he also opposes cuts in payments to doctors if that results in “rationing care,” but assured viewers that there were “other places in Medicare where cuts can occur.” Of course, he didn’t name of any of these “other places.”

But if you’re going to keep shoveling money to private insurers and you’re not going to limit what doctors can charge, we find it pretty hard to believe that you’re serious about reducing the cost of Medicare. And if you’re not serious about that (and, like Kyl, you’re also opposed to any tax increases on anyone), then it’s pretty hard to believe that you’re really serious about reducing the deficit.

BTW: Kyl isn't the only one who doesn't want to cut Medicare spending.

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