First we use the referral to The Hill since we cannot readily find this on the CMS web site. Second this report is not readily usable as is all other Government reports, it is protected from any cut and paste and any analysis without substantial processing. We suspect that such was done deliberately to slow any real time analyses. However we have no data to validate that assumption.
Now for the first bit of data. The chart below shows the total costs of HR 3962 over the period 2010-2019. Note that Medicare expansion and Affordability payment account for the largest added costs. Second the cost reductions are almost all on Medicare. This will be the key point in the analysis. Also note the added savings from both individual and employer payments.
The following is the breakout of these costs and savings by year. Namely we look at the previous summary chart but now by element and by year.
The biggest continuing set of cuts will be to Medicare. It is critical to note that these cuts are allegedly the fraud and abuse but frankly we have observed that it will result in the driving out of physicians and hospitals in providing services to Medicare patients.
The following is a chart depicting the difference between the current plan and HR 3962. Again one can see the major hit is Medicare and the major elements added and funded by Medicare will be Medicaid, the Exchange both public and private. This means that Medicare will be used as a funding mechanism for Medicaid as well as any public option.
We now look at the sources of funding by type. First we look at the total sources as a percent of GDP under the HR 3962 Bill. This we show below. Note in this analysis that the public option represents a small percent of the total. We believe that this is highly deception. We analyzed this in a prior posting and detailed the analysis in a White Paper. We will return to this concern later.
In the following chart we look at the same data as above, the total receipts to be used to pay for health care under HR 3962 and we look at them normalized in a total amount for each year.
Note that again by 2019 the options are small as compared to the total. This is highly suspect. There is no basis for this analysis in the CMS report and as a result one has to seriously question the result.
Now let us look more closely at what this does fro Medicare. Using CMS data we first present the estimated number of Medicare subscribers over this time period. We show this below.
Here we have shown Part A, which accounts for all of those eligible and subscribing, and then delineate the other parts.
We now show the Medicare expenditures per sub in the two plans; the current and HR 3962. Note carefully the increasing gap per year under HR 3962. Just where this funding comes from in terms of services reduction is not stated.
Now look below at the percent decrease of Medicare in HR 3962 and the current plan. It is small at the beginning and then in 2014 jumps and then remains high thereafter.
Finally we show the annualized rates of increase in GDP, Medicare under the current plan and Medicare under HR 3962. Note the great drop in the early stage. Then all along with the exception of what appears as an anomaly in 2015 we see a lag. This lag will result in the reduction or rationing of services. It will as we have demonstrated drive out practitioners in droves.
Now we want to state a few conclusions:
1. As we have demonstrated in a White Paper the subscribers to Medicare have paid well in excess of any benefits rendered. Specifically the average Medicare recipient has paid 50% more in payments that they will ever get in benefits. The Government has taken this money from the trust fund and spent it. Thus the lies that young people seem to spread that they are supporting Medicare patients are just that, lies, since they do not understand what Congress has done.
2. The public option has dynamics driven by attractants which drive people to it such as costs and drive people away from it such as quality of service. The model used by CMS fails to account for these effects.
3. The CMS model is optimistic at best. First as we have argued before it uses a old paradigm of health care management. Second it fails to present its data used as a basis for the calculations to that they may be examined in the light of day.
4. Medicare will decay dramatically under this plan. Yet its decay may be stretched out until after the current President has left office yet its impact will be devastating.
5. This is rationing pure and simple. It does not take an economist to recognize this. This will create two levels of health care, for those sick and able to afford only Medicare, it will make Canada and England look like the Waldorf, and for those who can buy their way around it, they will get quality care.
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