Happy Times! Obama says Medicare, Medicaid, 'not in crisis'

President Obama marked the 50th anniversary of Medicare and Medicaid in his weekly address, saying that Obamacare is "finishing the job" begun by Presidents Kennedy and Johnson.

He also made the spurious claim that the two federal health care programs are not in crisis, and those who say they're in trouble are playing politics:

According to Obama, those who say "Medicare and Medicaid are in crisis" are doing so as "a political excuse to cut their funding, privatize them, or phase them out entirely."

As popular as Medicare remains with the seniors — not surprising given the greater dollar value of benefits received relative to the value of contributions made and the open access to clinicians and hospitals for most beneficiaries — the program is not sustainable in its current form.

Even with the current slowdown in spending that has been occurring in both Medicare and the rest of health care, the doubling of the population on Medicare resulting from the aging baby-boomers as well as any increase from the historically low spending per capita will require some combination of benefit cuts, eligibility changes, cost-sharing increases, tax increases and reductions in payments to providers.

If the significant reductions in payments built into the Affordable Care Act are not all carried out, as the Medicare actuaries have predicted will occur, these financial pressures will come even sooner. The longer policymakers delay putting in place changes that will make Medicare solvent, the more difficult and limited the choices will be.

Medicaid is more complicated. It began as a program primarily for people who were receiving welfare payments. The majority of people who are provided coverage are under 65 but the majority of spending is for people who are poor and aged in long term care and or disabled. With the A.C.A., Medicaid has now been expanded to cover all people below 138 percent of the poverty line (assuming state acquiescence). Federal matching rates for the population originally covered varies between 50 percent and 90 percent, depending on the state’s income. The expanded coverage currently has a 100 percent federal matching rate which will decline to 90 percent, which is also the match rate for the Children’s Health Insurance Program. Whether states will be able to absorb the 10 percent match is as yet unknown. At some point, these disparate match rates and the role of the federal government in long term care will need to be reassessed and Medicaid changed accordingly.

The president's assertion that these two, gargantuan federal health care programs are not in crisis is a lie. And unless something is done to put Medicare and Medicaid on a sustainable path, the two programs will end up busting the budget, crowding out funding for vital priorities like national defense, and failing to deliver on their promises of even minimum health care for seniors and the poor.

President Obama marked the 50th anniversary of Medicare and Medicaid in his weekly address, saying that Obamacare is "finishing the job" begun by Presidents Kennedy and Johnson.

He also made the spurious claim that the two federal health care programs are not in crisis, and those who say they're in trouble are playing politics:

According to Obama, those who say "Medicare and Medicaid are in crisis" are doing so as "a political excuse to cut their funding, privatize them, or phase them out entirely."

He claimed that Obamacare proves it's possible to "make smart changes" to Medicare and Medicaid "over time" so that everyone can have access to "efficient, high-quality care."

Anyone on Medicaid would be surprised to learn they are receiving "efficient, high quality care." That's because experts - including that bastion of right wing nuttery, the Centers for Medicare and Medicaid Services - says both programs are "unsustainable":

As popular as Medicare remains with the seniors — not surprising given the greater dollar value of benefits received relative to the value of contributions made and the open access to clinicians and hospitals for most beneficiaries — the program is not sustainable in its current form.

Even with the current slowdown in spending that has been occurring in both Medicare and the rest of health care, the doubling of the population on Medicare resulting from the aging baby-boomers as well as any increase from the historically low spending per capita will require some combination of benefit cuts, eligibility changes, cost-sharing increases, tax increases and reductions in payments to providers.

If the significant reductions in payments built into the Affordable Care Act are not all carried out, as the Medicare actuaries have predicted will occur, these financial pressures will come even sooner. The longer policymakers delay putting in place changes that will make Medicare solvent, the more difficult and limited the choices will be.

Medicaid is more complicated. It began as a program primarily for people who were receiving welfare payments. The majority of people who are provided coverage are under 65 but the majority of spending is for people who are poor and aged in long term care and or disabled. With the A.C.A., Medicaid has now been expanded to cover all people below 138 percent of the poverty line (assuming state acquiescence). Federal matching rates for the population originally covered varies between 50 percent and 90 percent, depending on the state’s income. The expanded coverage currently has a 100 percent federal matching rate which will decline to 90 percent, which is also the match rate for the Children’s Health Insurance Program. Whether states will be able to absorb the 10 percent match is as yet unknown. At some point, these disparate match rates and the role of the federal government in long term care will need to be reassessed and Medicaid changed accordingly.

The president's assertion that these two, gargantuan federal health care programs are not in crisis is a lie. And unless something is done to put Medicare and Medicaid on a sustainable path, the two programs will end up busting the budget, crowding out funding for vital priorities like national defense, and failing to deliver on their promises of even minimum health care for seniors and the poor.