White House touts health reform’s Medicare savings, defends math

They noted Richard Foster, chief CMS actuary who crunched many of the figures cited Monday, has been wary of the agency’s accounting methods. For instance, the savings the law provides to Medicare’s hospital benefit, Foster wrote in April, “cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions) and to extend the trust fund, despite the appearance of this result from the respective accounting conventions.”

Republicans have latched onto those comments to blast Monday’s CMS report.

“The Administration’s own actuary and CBO have said over and over again that you can’t ‘double-count’ the Medicare cuts by claiming they extend the life of the Medicare program and at the same time fund a new entitlement program,” Sen. Charles Grassley (Iowa), senior Republican on the Finance Committee, said in a statement. “That’s common sense even if the experts didn’t say it. 

“It’s intellectually dishonest,” Grassley added, “to try to have it both ways.”

Administration officials defended their math Monday, with Jonathan Blum, director of CMS’ Center for Medicare Management, telling reporters the accounting represents “consistent budget convention.”

Sebelius added that a “growing consensus” among lawmakers that healthcare costs need reining in has left White House officials “more optimistic” than Foster.

“He has a different interpretation,” she said.

Much of the partisan debate hinges on semantics. Democrats have said repeatedly that seniors wouldn’t lose any guaranteed Medicare benefits under the new reform law. Yet seniors enrolled in the Medicare Advantage (MA) program — where the government pays private insurers to cover Medicare patients — could lose benefits like dental and eye care not covered by the traditional program. Such benefits have made MA plans enormously popular among seniors, but have also cost Medicare, on average, 14 percent more per beneficiary — subsidies that come largely at the expense of seniors enrolled in the traditional Medicare program.

Another wildcard in the Medicare savings debate revolves around the so-called sustainable growth rate (SGR), the formula that updates Medicare payments to doctors each year. At the end of November, according to the SGR, doctors will begin receiving a 21 percent cut in Medicare payments — a cut congressional leaders say they will prevent after the mid-term elections.

Monday’s report assumes the 21 percent cut will take hold in December, producing more projected savings than will likely be realized. 

Blum defended that calculation Monday, arguing that CMS simply based its estimates on current law. 

“We’re working with Congress,” he added, “for a long-term [SGR] fix.”