Newt Gingrich, former Speaker of the House and candidate for the Republican presidential nomination, told David Gregory Sunday that he opposes “social engineering” in healthcare, whether it comes from the left or the right. That seems to mean that he’s opposed to any significant change in the Medicare program—a stance that is calculated to avoid scaring off political support from seniors. But that overlooks the fact that Medicare itself is one of the most massive social engineering projects of the 20th century, one that will not survive in the 21st century without the kind of policies that Gingrich has rejected.
The Medicare Trustees issued their annual report on Friday (the 13th), and the news is not good. Left to its own devices, Medicare’s Hospital Insurance trust fund will run out of money in 2024, five years earlier than projected by the Trustees last August. If the cuts in Medicare payments to doctors, hospitals, and other care givers take effect as scheduled under the current law, Medicare payment rates will be no higher than those of Medicaid, dropping to 60 percent of the going market rates by 2020 and falling further in years to come. Good luck to seniors trying to make a doctor’s appointment if Medicare pays 60 cents on the dollar.
There is little chance that such cuts will be implemented. Congress has avoided taking formula-driven reductions in physician payment rates over the past eight years, which has built up the amount that would have to be taken out if a cut were ever put into place. Next year, doctors are looking at a nearly 30 percent reduction in Medicare payment rates, but it will never happen. They know it, and the Trustees know it. And without that cut and others like it, Medicare costs will soar and so will the taxes working people pay to support this bloated and inefficient program.
That’s social engineering. Medicare rewards the behavior it wants, and penalizes the behavior it does not want. Apparently, it wants healthcare providers to prescribe more tests and procedures without much regard for whether those services are truly essential for their patients. Why else would traditional Medicare (which has 36 million members) be designed to pay for each individual service rather than covering all of the care needed by a patient? The entitlement is unlimited, and the incentives are clear.
So, Mssrs. Speaker (that’s Gingrich and Boehner), try not to be too “wedded” to a program designed to impose unaffordable costs on the country. You may not want to embrace the plan adopted in the House budget resolution a few weeks ago, before electioneering fears took hold. But you should at least admit that Medicare’s promises cannot be kept and that reform is unavoidable. If Obama administration officials can sign off on that statement, surely you can too.
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