Critics of President Obama’s rosy outlook on Medicare reform as part of the Affordable Care Act are pointing to the entitlement’s chief actuary as proof that his sudden realization of Medicare’s fiscal virtues under reform are peppered with politics. As recently as last weekend, Obama praised the almost half a trillion in savings over the next decade to the federal budget as not only the most fiscally responsible action the government has implemented as part of reform, but also as part and parcel of the overall commitment to the nation’s seniors with respect to the affordable access to healthcare.

Chief actuary Richard Foster responds,

[T]he financial projections shown in this report for Medicare do not represent a reasonable expectation for actual program operations in either the short range (as a result of the unsustainable reductions in physician payment rates) or the long range (because of the strong likelihood that the statutory reductions in price updates for most categories of Medicare provider services will not be viable). I encourage readers to review the “illustrative alternative” projections that are based on more sustainable assumptions for physician and other Medicare price updates.

Those alternative projections do not include future Medicare costs over the next 20 to 25 years, which, according to Foster, cannot occur without continued cuts in payments to hospitals and providers. Together, with Social Security, Medicare costs are represented by trillions and trillions in unfunded liabilities; as slower payments to healthcare providers will do anything but create efficiency and cost savings — and everything to create care delivery disincentives over that time frame.

Interesting reading, and a compelling alternative to what fiscal conservatives see as Obama spin on this federally funded aspect of the reform movement.  (Page 288 for Foster’s comments.) | LINK

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