Medicare Costs Are Going Down: Thanks, Obamacare?

While national spending on health care is sky-rocketing, we can be thankful to Obamacare for one thing: the direct costs of Medicare are not projected to be quite as high as the Congressional Budget Office once thought. Why is that?

And some [of the decrease in Medicare spending is] because of cuts in health care spending passed by Congress. The Affordable Care Act, in particular, made significant reductions to Medicare’s spending on hospitals and private Medicare plans, to help subsidize insurance coverage for low- and middle-income Americans. The Budget Control Act, which Congress passed in 2011, also made some across-the-board cuts to Medicare spending.

Did you see the crucial bit there: “to help subsidize insurance coverage.” What that means is that Medicare is being constrained: less money is being given to it so that some of the “savings” can offset the extraordinary cost of providing insurance for the previously uninsured. But it only helps subsidize the additional costs. It can’t cover it. Which means the overall cost is higher. For worse overall coverage and care.

So the Medicare budget might appear to be going down. But that is not necessarily a good thing. Overall spending is up. But also, it means that Medicare is probably “negotiating” a lower payout to hospitals. Which means services will suffer as corners are cut. It was already the case that Medicare severly underpaid hospital bills (most of the time 30-40% of the original bill).

I am no stranger to this. When my twins were born, they were in the NICU for two weeks, and the bill that came back neared $150,000.

The hospital urged me to take Medicaid (the low-income emergency assistance arm of Medicare), and they also would not allow me to ask the hospital-affiliated charities for assistance until after I had applied for Medicaid. Which I refused to do.

I wouldn’t take other people’s money by force of arms. I asked the hospital rep how taking Medicaid was any different than robbing someone at gunpoint to pay my hospital bills. The only difference is who is holding the gun. They loved me their at the hospital.

So I borrowed money from my church and family, got gifts from family and friends and tried to negotiate a self-pay arrangement with the hospital. Here is what I asked them, “If you are so keen on getting me on Medicaid, why don’t you just allow me to pay you whatever Medicaid would have given?” The answer: “We can’t do that. If you self-pay a lump sum, we can give you a discount, but we won’t allow you to give us the Medicaid amount. That’s too low.” In other words, taxpayers weren’t the only people getting robbed at gunpoint. When given the option, no hospital would settle for the Medicaid payout. Not only was it stolen from taxpayers, it was also stealing from hospitals.

The reason the hospital refused to let me pay the Medicaid rate is that they made up for Medicaid’s paltry payouts by skewering the self-pay patients. So I was paying for my healthcare multiple times. I paid for my own healthcare, plus the cost of making up for Medicaid’s other low payouts, plus I paid taxes into Medicare and Medicaid. In other words, I paid three times for healthcare that wasn’t worth even a quarter of what I paid in real value terms.

If Medicare payments have been reduced even further, it means even more than ever that hospitals can’t survive on government payments alone. Most of the hospitals funded primarily by Medicare patients are not ultimately solvent. Imagine how much worse things will get: more expensive care for the people who can pay, a degradation of hospital services overall, and more and more taxes.

Sorry if I ruined this bit of good news for you, leftists. Just call me Mr. Sunshine.