Published January 15, 2010
Web editor’s note: This piece was published first at WeeklyStandard.com and subsequently in the The Worcester Telegram and Gazette.
The Massachusetts Senate special election is shaping up as a referendum on the health-care debate in Washington. And its outcome may well determine whether Massachusetts seniors get to keep the Medicare benefits they currently enjoy.
Alone among the American people, Massachusetts voters will have the chance to register their formal views on the proposed health-care overhaul before Congress votes on its final version.
Few stand to be more personally affected by that verdict than Massachusetts seniors. This is particularly true for those enrolled in Medicare Advantage, the popular program that lets seniors receive their Medicare benefits through private insurers if they so choose.
According to projections by the non-partisan Congressional Budget Office (CBO), the Senate version of the proposed health-care overhaul (which the final version is largely expected to mirror) would cut Medicare benefits by more than $800 billion in its real first ten years (2014 to 2023). That’s $800 billion that would be taken from Medicare and used to pay for Obamacare. More than $200 billion of those cuts would be from Medicare Advantage.
Across Massachusetts, 175,000 seniors have chosen Medicare Advantage plans. That’s 17 percent of seniors statewide. If the health-care overhaul passes, those 175,000 seniors would see significant cuts to their benefits.
So how much would Massachusetts seniors stand to lose? No one can say exactly, as Medicare Advantage plans vary by company and region — and each plan would be affected somewhat differently.
CBO projections, however, do indicate what the average cuts would be. Medicare Advantage cuts would total $214 billion in the bill’s real first ten years. Currently, 10.3 million seniors nationwide are enrolled in Medicare Advantage. So, that’s an average cut per senior of $2,100 per year for ten years. Some would have their benefits cut more, some less. But there’s no question that Massachusetts seniors would experience a big cut in their Medicare benefits.
To be sure, not all seniors would share in these cuts. Florida seniors — at least those in Miami-Dade, Broward, and Palm Beach counties — wouldn’t be subject to them. The “Gator Aid” deal that Senate Majority Leader Harry Reid struck with Florida Senator Bill Nelson would allow South Floridians to continue enjoying the same Medicare Advantage benefits they enjoy today. Seniors in eleven other counties would also be shielded from the cuts. But none of those counties are in Massachusetts.
Martha Coakley has said that she would vote for the bill that would impose these cuts in Medicare benefits on Massachusetts seniors. Scott Brown has said that he would vote against it — and thereby stop them. Given the razor-thin margin in the Senate by which the proposed legislation could either prevail or not, a vote for Coakley could prove to be a very expensive vote for Massachusetts seniors.
The CBO also projects that, in the bill’s real first ten years, it would cost $2.5 trillion and would raise Americans’ taxes by over $1 trillion. That’s a high price to pay, particularly for a state that already has a health plan.
At a moment when most American families are tightening their fiscal belts, Congress is spending like a drunken sailor and adopting the bookkeeping practices of Enron accountants. For example, Congress is double-counting the money that would be cut from Medicare, claiming it can be used to pay for a costly new entitlement program and to extend the solvency of the Medicare trust fund at the same time. But the CBO has said this money can’t be spent twice. It’s one or the other, not both.
In addition, the Chief Actuary of the Medicare program has warned that reductions in Medicare payments to hospitals could push one in five facilities into insolvency, and thus out of the Medicare program. In a possible foretaste of things to come, the Mayo Clinic in Glendale, Arizona has just closed its doors to Medicare patients because the government’s payment rates don’t cover the cost of caring for patients. Many clinics in Massachusetts may soon follow suit.
Sensible people across the political spectrum and across America agree that we need health-care reform. But not every collection of political compromises, back-room deals, and reallocation of benefits from one group to another — and from one state to another — deserves the name of “reform.”
The Mayo Clinic example should sound a warning: Medicare should not be viewed as a trough full of money for politicians to spend elsewhere.
If Massachusetts voters sound another warning on January 19, Congress can be made to start over and come up with a sensible, bipartisan plan that would improve health care for everyone — including Massachusetts seniors.
James Capretta, the former top budget official for health care at the Office of Management and Budget, is a fellow at the Ethics and Public Policy Center and a policy consultant to private health insurers. Jeffrey Anderson is the director of the Benjamin Rush Society and a senior fellow in health care studies at the Pacific Research Institute.
