White House rekindles fight with actuary over healthcare savings

The Obama administration on Wednesday rekindled a feud with the Medicare program’s chief actuary after he again questioned the healthcare reform law’s savings.

In his analysis of the law last April, and again during testimony before the House Budget Committee on Wednesday, Rick Foster said the law would increase national healthcare spending by $311 billion through 2019 and questioned whether Medicare savings called for in the law are sustainable. 

Foster told The Hill during an interview earlier this month that adjustments to Medicare rates required by the law would force hospitals to become permanently as productive as the economy at large, which he believes is not possible.

“The Actuary has also raised concerns that implementing these cost-control measures may not be possible,” healthcare messaging guru Stephanie Cutter wrote on the White House blog Wednesday afternoon. “Once again, we disagree. History shows that it is possible to implement measures that will save money for Medicare and the federal government. For example, both the Office of the Actuary and the Congressional Budget Office substantially underestimated the savings that were achieved by the Balanced Budget Act.”

In addition to defending the administration’s commitment to reducing Medicare spending in the law, Cutter outlined several provisions of the law that aim to lower healthcare costs. These include state insurance exchanges, a new Medicare innovation center and incentives for healthcare providers to coordinate care.

“These policies will bring down health care costs,” Cutter wrote, “but they are undervalued by the Actuary.”

To boost its case, the administration points to a new letter from 250 economists and budget experts who argue that repealing the law would cause “needless economic harm and would set back efforts to create a more disciplined and more effective health care system.” The letter’s signers add that the law “contains essentially every cost-containment provision policy analysts have considered effective in reducing the rate of medical spending.”

The administration’s public feud with Foster previously reached a crescendo in September after Office of Health Reform Director Nancy-Ann DeParle wrote a blog post asserting that Foster’s cost analysis showed spending per insured person would be more than $1,000 lower in 2019 thanks to the reform law. That prompted the actuary to tell the Associated Press that “the amounts quoted in the White House blog are not meaningful and cannot be used to calculate the change in health expenditures per insured person.”