Medicare 'reform' resembles favors for special interests
If there is any consensus about federal budget sequestration and the long-term arc of federal spending, it's that something has to be done about "entitlements," especially Medicare.
Even under sequestration, according to the Congressional Budget Office, about 90 percent of Medicare spending is capped at a 2 percent reduction; 2 percent of spending is subject to a cut of up to 7.6 percent, and 8 percent is exempt from cuts.
Whether reduced payments to providers produces reduced access to care is an open question that will be answered as the year progresses, unless Congress suddenly summons the political courage to specifically reform Medicare rather than rely on sequestration.
Its action so far regarding other forms of entitlement in the program is not encouraging.
As noted in a Los Angeles Times column by Dr. Art Kellerman, a physician and senior policy researcher for the Rand Corp., members of Congress actually have increased Medicare spending by approving provisions for favored interests.
For example, a group of senators in January inserted a provision at the last minute into the "fiscal cliff" avoidance legislation that would bar Medicare, for two years, from getting a better price on a drug used in kidney dialysis. The cost to the program is $500 million over two years.
That echoes the Medicare Part D drug program, under which Congress specifically forbade Medicare from using its leverage to achieve lower prescription drug prices. Because of that, prices paid through Medicare often are much higher than those paid through Medicaid or the Veterans Administration, for identical drugs.
It is possible that older Americans will have a diminished entitlement in Medicare. But before that happens, Congress should get serious about diminished entitlements for the pharmaceutical industry and others who reap riches from political favoritism.