Nancy Pelosi, who is entirely inconsequential to the fiscal cliff negotiations, nevertheless felt it was important to scare Grandma about raising the Medicare eligibility age. As Daniel Foster quips, it's "not great" as Pelosi strongly implies that seniors are going to wake up tomorrow to find their Medicare gone. Nobody believes it, but so what? It's all about standing tall, crying "Medicare forever!"
Leave it to those spoilsports at the Medicare Trustees Board to crunch the numbers. In a little more than a decade, the Medicare Trust Fund will be exhausted leading to automatic benefit cuts:
The projected date of HI Trust Fund exhaustion is 2024, the same date projected in last year's report, at which time dedicated revenues would be sufficient to pay 87 percent of HI costs. The Trustees project that the share of HI expenditures that can be financed with HI dedicated revenues will decline slowly to 67 percent in 2045, and then rise slowly until it reaches 69 percent in 2086.Not to worry: Obamacare is here to save the day with a series of outlandish assumptions and/or unicorn intervention:
Most of the ACA-related cost saving is attributable to a reduction in the annual payment updates for most Medicare services (other than physicians’ services and drugs) by total economy multifactor productivity growth, which the Trustees project will average 1.1 percent per year. The report notes that sustaining these payment reductions indefinitely will require unprecedented efficiency-enhancing innovations in health care payment and delivery systems that are by no means certain. In addition, the Trustees assume an almost 31-percent reduction in Medicare payment rates for physician services will be implemented in 2013 as required by current law, which is also highly uncertain.This last point refers to the "doc fix" which is the permanently temporary adjustment to Medicare reimbursement rates that Congress enacted to control costs and then regularly overrides. To say that a 31% reduction in payments to Medicare doctors is "uncertain" is a vast understatement.
The Trustees conclude by urging Washington to take action so Americans have "adequate time to prepare" to the changes that will be made to the system under current law. Instead, Nancy Pelosi wants you to believe this sinking ship will make it to harbor if we just get 2% of the crew to pull harder.