Monday, August 9, 2010

Medicare's Chief Actuary Explains Why The System is Failing

A huge rebuke.

Video embedded below.

Ed Morrissey has more;

"The memo claimed that the estimates used by the White House and its allies underestimated costs by a whopping 68% and could not possibly be seen as a good-faith projection of the program’s future:

“(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. . . or the long range. . . . I encourage readers to review the ‘illustrative alternative’ projections that are based on more sustainable assumptions for physician and other Medicare price updates.”

These remarkable words are found, in all places, in the “Statement of Actuarial Opinion” in the back of the 2010 annual Medicare Trustees’ Report.

It is difficult to overstate how unusual this development is. The normal process with the annual Trustees’ Reports is for the Trustees to develop and publish the best available projections for the future finances of Social Security and Medicare. The respective Social Security and Medicare actuaries then sign a pro forma blessing of those projections, which is tacked to the back of the report when released to the public.

This year, the Medicare Chief Actuary clearly did not feel he could in good conscience sign such a declaration.

What happened?  Our old friend the “doctor fix” raised his head again.  It turns out that the Medicare trustees’ projection of costs relies on the postponed 23% cuts in reimbursements to take effect — even though the White House and the Democrats have repeatedly promised the AMA they would be repealed. ...

The actuary also rejected the idea that “economy-wide productivity” gains would drive costs downward"

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