Richard Foster for President – Medicare’s chief actuary vs. President Obama on the ObamaCare facts.

There probably isn’t a worse job in Washington than Medicare trustee, unpaid Capitol Hill interns included. Every year the trustees issue the gravest warnings about entitlement spending and at best prompt a moment of brow-furrowing before the political class returns to its default state of indifference.

This year’s report, issued last week, has more than the usual political meaning because Democrats are hailing it as validation of their claims that ObamaCare will save taxpayers money. The trustee report shows “how the Affordable Care Act is helping to reduce costs and make Medicare stronger,” the White House said in a statement.

One problem: That spin ignores the extraordinary companion analysis by chief Medicare actuary Richard Foster that repudiates this conclusion and is the most damning fiscal indictment to date of the Affordable Care Act.

The trustees do estimate the Medicare hospital trust fund will run out of money in 2029, some 12 years later than they estimated last year. (Keep in mind that the trust fund is a meaningless accounting artifact because Medicare was long ago financed in part by general tax revenues.) It’s also true that, thanks to ObamaCare’s changes under current budget rules, Medicare’s unfunded 75-year liability has fallen to about $30.8 trillion from nearly $37 trillion in the previous audit.

Even in Washington, $6.2 trillion is real money. Yet this is a strange excuse for celebration. Democrats wrung about a half-trillion dollars from Medicare over the next decade, but then they turned around and plowed these “savings” into their new middle-class health-care entitlement. It’s akin to paying off one credit card with another—while still being deeply in hock on the first.

But then comes the report’s final appendix, where Mr. Foster disowns the previous 280-odd pages. Mr. Foster has been Medicare’s chief actuary for 15 years, and as such he is required to evaluate the law as written. But as he notes in his appendix, the law as written bears little if any relation to the real world—and thus, he says, the trustee estimates “do not represent a reasonable expectation for actual program operations in either the short range . . . or the long range.” In an unprecedented move, he directs readers to a separate “alternative scenario” that his office drew up using more realistic assumptions.

Mr. Foster shows that the Medicare “cuts” that Democrats wrote into ObamaCare exist only on paper and were written so they could pretend to reduce the deficit and perform the miracles the trustees dutifully outlined. With the exception of cuts in Medicare Advantage, those reductions will never happen in practice.

One of the fictions Mr. Foster highlights is the 30% cut in physician payments over the next three years that Democrats have already promised to disallow. Republicans would do the same, we hasten to add.

Another chunk of ObamaCare “savings” are due to cranking down Medicare’s price controls for hospitals and other providers that Mr. Foster says are also “extremely unlikely to occur.” In the absence of “substantial and transformational changes in health-care practices”—in other words, a productivity revolution in medicine that has never happened—costs will simply rise for private patients, or hospitals will refuse to treat seniors insured by Medicare. Congress will never allow that to happen either.

In other words, under ObamaCare the “cost curve” will not be bent as the White House has advertised.

Under his more plausible outlook, Mr. Foster notes that Medicare’s share of the economy will rise 60% between now and 2040, while under the trustees report that Democrats are crowing about it would “only” rise by 35%. Didn’t President Obama tell us that health-care reform is entitlement reform?

Politicians have deliberately written the ObamaCare rules, as they have for all entitlements, so the real costs are disguised and hard for taxpayers to figure out. During the ObamaCare debate, Mr. Foster was honest enough from his Medicare perch to expose the plan’s true costs, and his new Medicare demarche continues this public service. He ought to receive the Presidential Medal of Freedom, or at least some media attention. But in Barack Obama’s Washington, his honesty will be rewarded with obscurity.

http://online.wsj.com/article/SB10001424052748703309704575413263344491010.html

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I wear many hats but history, economics and political observance have always been a passion. I am a graduate of the University of Cincinnati College of Business with a degree in Information Systems and Digital Business with a minor in European History. I work for a small mom-and-pop IT consulting and software design company. We deal in servicing mostly government funded non-profit mental and behavioral health care agencies in the state of Ohio. In this I deal with Medicaid and Medicare funds and have a little insight on the boondoggles of government there. Thankfully the undemanding nature of my daily profession gives me ample time to read and stay aware of our current state of affairs which I find stranger than fiction in many instances. In addition to being in the IT field, I have also been self employed with a small contracting company so I might know a thing or two about the plight of small business that employs 71% of the American workforce. I however don't draw my knowledge from my day jobs, which I have had a few; I draw it from an intense obsession with facts and observation about the world in which I live. I do have formal education in things such as history, economics and finance particularly as it pertains to global issues, but I have come to find much of what I thought I knew from the formalities of a state university I had to unlearn through much time and independent research. I hope you enjoy what I bring you which is not often heard in the mainstream news outlets. I would like to think my own personal editorializing is not only edifying but thought provoking while not at all obnoxious. That last one may be a hard to achieve.

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