Avoiding Medicaid Cuts
The House Republicans’ budget resolution is now available. In it, they are proposing a cut of ~$800 billion. Almost all of the $800 billion 10-year spending cut target for the Energy and Commerce Committee would come out of Medicaid by choice. (God forbid those not being able to afford healthcare should have healthcare.) Those with no healthcare should work longer hours to pay for such, which seems to be the Republican mentality.
Medicaid accounts for 93% of projected 10-year spending under E&C’s purview. Is this a good place to cut costs? Let’s answer the question.
As you can see for yourself in the chart. It excludes costs for thr third rail called Medicare. Medicare is the sacred cow having much political expenditure to pay if Congress or the president (including Musk) choose to cut it.
The mentality in the US is designating people who are in good jobs as hardworking. However, the jobs offering healthcare benefits are becoming less available and company sponsored healthcare insurance is costly. Those in lesser jobs and paid less can not afford healthcare.
The end result is providing healthcare commercially is costly enough so as to make US labor more costly than European or other countries which have government subsidized healthcare. Hint . . .
In which case I agree with no cuts to Medicare and also no cuts to Medicaid also. The cuts to Medicaid the Republican lawmakers are proposing will likely cause 10-20 million people to lose coverage. Where do they go then?
But, there are other places to cut costs.
Another place Republicans can challenge if they have the will [power to do so. The commercial Medicare plan called Medicare Advantage plans enrolls 54% of Medicare beneficiaries. A proposal by Xpostfactoid suggests cuts to Medicare Advantage. Payment to Medicare Advantage is higher than traditional Medicare. The cuts to Medicare Advatage are in the range of $880 billion over ten years. The reduction would still leave the Advantage plans overpaid for the services offer. However, Medicare Advantage would not be that enticing for commercial healthcare.
I believe that is what the Republicans and Musk are looking to ($880 billion) reduce expenditures by. As Xpostfactoid says, they look at him or me for that matter. Looking to MedPAC’s March 2025 report (which I have yet to look at this month):
“In 2025, MedPac estimates Original Medicare will spend 20 percent more for MA enrollees than it would spend if those beneficiaries were enrolled in FFS Medicare. The difference translates into a projected $84 billion.”
A yearly number.
Projecting the estimate forward, the Committee for a Responsible Federal Budget estimates MA plans will be overpaid by $1.2 trillion from 2025-2034. As MedPAC, finds, almost half of the overpayment of MA plans stems from a mismatch between MA enrollees’ actual health profiles and the insurer-calculated “risk scores” affecting federal payments to the plans.
It is pretty obvious what is taking place here with over coding the healthiest of Medicare as those who are not healthy typically end up leaving and going back to Original Medicare. Coding intensity and selection plus sickly people leaving MA has played a big part in Medicare Advantage profitability.
“Republicans Should Cut Medicare,” Andrew Sprung