Will Obama’s Medicare Cuts Hurt Seniors?


by Patrick Appel

Avik Roy, who advises the Romney campaign, insists that the ACA's Medicare cuts will do damage:

Of the $716 billion in cuts, $415 billion come in the form of “updates to fee-for-service payment rates,” a euphemism for reducing Medicare’s payments to doctors and hospitals. But what happens when you reduce payments to doctors? Doctors stop being willing to see Medicare patients. And if you can’t actually get a doctor’s appointment, what does it really matter what your insurance plan covers on paper?

We already see this happening in the Medicaid program, where sick and injured children can’t get appointments to deal with urgent medical conditions, because Medicaid so severely underpays doctors relative to private insurers.

A valid point. But Roy goes too far here:

By the end of this decade, under Obamacare, Medicare reimbursement rates are set to fall below those of Medicaid.

Roy illustrates this point with the chart above, but, if you read the report (pdf) from where the chart comes, it becomes clear that the big cut in Medicare payments under current law mostly isn't due to Obamacare. From the report:

Medicare physician payment rates decline to 55 percent of private health insurance payment rates in 2013, due to the scheduled reduction in the Medicare physician fee schedule of more than 30 percent under the [Medicare Sustainable Growth Rate] formula in current law. (In practice, Congress is very likely to override this reduction, as it has consistently for 2003 through 2012.) 

This override is often referred to as the "doc fix." Obamacare's Medicare cuts will have real consequences. For instance, Sarah Kliff finds evidence that the cuts could lower healthcare quality for Medicare recipients. But Roy's accounting trick makes it difficult to trust him or his numbers.