Cuts to Medicare do affect Medicare beneficiaries … Under any plan

I read the following on the web from ABC World News. It’s from an article about the presidential election and Medicare.

The $716 billion in cuts to Medicare in the Affordable Care Act do not affect benefits for seniors. Instead, they reduce provider reimbursements and are intended to curb waste, fraud and abuse, but that has not stopped the GOP attacks.

Let’s read that carefully because it reflects a general tone of the media and oversimplification of the situation. “Does not affect benefits for seniors”. Well, much of the cutting comes from reducing payments to Medicare Advantage Plans and eventually that will affect benefits and premiums for seniors. The other cuts are to traditional Medicare providers. Does anyone seriously think that repeated and sharp cuts to Medicare providers won’t have an impact on seniors? Okay, the stated Medicare benefits may be the same, but finding a doctor who accepts Medicare may not be so easy.

If we were the slightest bit cynical, we could say that cutting payments would encourage some among us to increase waste, fraud and abuse. Isn’t greed behind all that? Doesn’t simply cutting payments encourage the unethical to find fraudulent ways to replace lost income?

Here is what the Medicare actuary said as quoted in a US Chamber publication:

The Actuary estimates net savings in Medicare under the law would total $575 billion over the ten year period.xxxvi A large portion of the savings ($233 billion) would result from adjusting provider payments by reducing payment updates for improvements in productivity gains.xxxvii These permanent adjustments to price updates for providers would create strong incentives for hospitals, skilled nursing facilities and home health agencies to improve efficiency.

But the Actuary states that:

[…]It is doubtful that many will be able to improve their own productivity to the degree achieved by the economy at large…Thus, providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the program (possibly jeopardizing access to care for beneficiaries.xxxviii

And then we have my favorite of all, curbing waste, fraud and abuse. Think about this, we need a massive law to get the people who run Medicare to curb waste, fraud and abuse. What were they supposed to be doing before Obamacare? This fraud is not a new story, it didn’t start within the last two years. It was identified and criticized in government reports at least going back to 1993.