Entitled to Know

The Senate is currently searching for money from the Medicare program to prevent next year’s cut in doctors’ reimbursements. If you needed to cut billions of dollars from Medicare which of these options would you choose? Eliminate all or part of the $54 billion in government subsidies going to private insurers in the Medicare Advantage program (as proposed by the independent Medicare Payment Advisory Commission-MedPAC ) or cut healthcare benefits going to seniors making higher than average incomes?

Seniors or Insurers? A seemingly easy choice.

For the Bush Administration and their allies in Congress the choice, of course, is to cut benefits for seniors. According to Jonathan Weisman and Christopher Lee writing in the Washington Post today, Nevada Senator John Ensign is once again pushing his plan to expand Medicare means testing.

This is a perpetual favorite for those who believe the way to erode public support for Medicare is to turn it into a welfare program serving only the poor by driving wealthier seniors into private insurance. As we’ve seen with the SCHIP debate, the concept of providing healthcare for all drives some in Washington crazy.

The Post says:

Already, the section of Medicare that pays for outpatient care, including doctors' fees, imposes some means testing. Single seniors with incomes exceeding $82,000 and couples with incomes about $164,000 pay higher premiums on a sliding scale as their wealth rises. Those thresholds rise each year with inflation. The original Bush proposal would have frozen those thresholds at $82,000 and $164,000, so more seniors would have been affected by means testing over time. The same thresholds would have applied to the new prescription drug benefit. According to the White House budget office, the proposal would have saved more than $10 billion over five years.

But wait. Cutting government overpayments to private insurers in Medicare would save more than 5 times that amount! Even if you trimmed just half of these outrageous overpayments to insurers you would still save more than this means testing proposal.

Seniors who aren’t living paycheck to paycheck are an easy target. But means testing Medicare will not improve its long-term solvency. Driving healthier, younger and higher-income seniors away from Medicare will change the program from one providing universal coverage to all beneficiaries to a welfare program with increasingly unsustainable costs.

Maybe that’s their ultimate goal after all.