 Democratic leaders in the House and Senate declared these proposed cuts are “dead on arrival”, but Administration officials say that, without drastic action to curtail entitlement spending, the healthcare programs themselves will need life support by the next decade. Critics, such as the AARP, say that the president’s proposals advance the privatization of Medicare, while hurting the elderly and the poor, those least able to afford healthcare. Supporters of the plan say that the budget only slows the rate of growth in Medicare spending, a step necessary if the program is going to survive long term. Though they disagree on the treatments needed to save it, both sides agree that the Medicare system is profoundly sick and the prognosis is grave. Most of the proposed cuts would come from fees paid to physicians, hospitals, nursing homes, and home healthcare agencies. As expected, advocates and associations representing these entities have called foul. They say cuts in reimbursement create an unacceptable financial hardship, making it impossible for them to cover their costs without raising their prices, thus passing much of the burden of the Administration’s budget cuts on to insurers and patients. These critics are especially scornful of the budget’s continued support of the Medicare Advantage program—a network of private, for-profit, insurers which are provided government incentives to provide health insurance options to Medicare recipients. The Center for American Progress says that these incentives amount to $150 billion in tax-payer supported subsidies to private insurance companies over the next ten years. Currently, beneficiaries pay more for care offered through Medicare Advantage than through traditional Medicare, which critics say validates their claim that private insurers cannot provide affordable insurance products to lowincome and fixed-income individuals.  The Administration counters that Medi-care’s current structure is inefficient because there are no built-in mechanisms to keep prices and costs in check. The proposed budget is intended to strengthen the role of market forces and competition in the offering of healthcare benefits to the poor and elderly, in the hope that these will, over time, force costs lower. An analysis by the Heritage Foundation supports this position. Genuine competition and consumer choice in selecting physicians and healthcare plans will drive down prices and costs, while improving quality of care and efficiencies in the system, according to the foundation. All participants in this debate agree that far greater emphasis and incentives need to be placed on healthier lifestyles, wellness programming, exercise and nutrition, and disease prevention, as a strategy for controlling costs. Some reductions in Medicare payments to doctors were already scheduled to occur even before the administration’s new budget cuts were introduced. According to the American Medical Association, Kansas physicians will lose $110 million in reimbursement for the care of elderly and disabled patients over the 18 months from July 2008 through December 2009, due to a 10.6 percent cut in Medicare payments scheduled to take effect in July 2008, with an additional 5 percent cut that will occur in 2009. The AMA says that, on average, each Kansas physician faces a Medicare cut of $16,000 over this 18-month period. Missouri physicians will lose $240 million during the same period. On average, each Missouri physician faces a Medicare cut of $17,000 from July 2008 through December 2009. In July 2008, physicians in the St. Louis and Kansas City area face additional cuts of 0.6 percent and those in the rest of Missouri face cuts of an additional 2.9 percent on top of the 10.6 percent cuts across the country. As the Center for American Progress points out, Medicare, and all those who depend on it—consumers, physicians, hospitals, other healthcare providers, and insurers, are all at the mercy of larger healthcare cost trends, which continue to outpace economic growth and wage growth nationally. Of course, each of these constituent groups also shares responsibility for the increase in these costs and can play a significant role in reigning them in.
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