NCPA Study: Government Unfunded Liability Cut in Half by Health Reform

Debt Commission’s Work Is Already Half Done But Seniors Access to Care Is In Jeopardy

DALLAS, TX -  The health reform bill enacted last spring  reduces Medicare's unfunded liability by $53 trillion, cutting in half the nation's long-term entitlement debt, according to a new study from the National Center for Policy Analysis (NCPA).

This huge improvement in the federal government's fiscal picture, however, is accomplished through cuts in payments to providers that put the elderly and disabled on Medicare at risk of compromised access to care, say the authors.

The Affordable Care Act (ACA) "reduces Medicare payments to doctors and hospitals relative to what everyone else will be paying," said former Medicare Trustee and study co-author Thomas R. Saving"By the end of the decade, Medicare will pay less than what Medicaid pays.   Access to care for senior citizens will be worse than what it is for low-income families on Medicaid." 

"While halving Medicare's unfunded liability goes a long way toward putting the nation's fiscal problems in order, the bad news is that older patients may not have the same access to care other patients have," said NCPA President John C. Goodman.  "Eventually, seniors could be forced into a separate health care system where they will face longer waits for treatment and may not have access to the latest technology."

President Obama's debt commission was created to propose ways to control growing federal deficits.  A lot of this work has already been done, however.  "The health reform act has done the heavy lifting for the debt commission because it wiped out half of our unfunded entitlement liabilities the day it was signed into law," said Goodman.

Will the slow-down in Medicare spending really take place?  "It may not," said Saving.  "There will be enormous potential pressure from seniors, doctors and hospitals to reverse course and undo these changes."

Medicare Trustees Reports 2010 and 2009: What a Difference a Year Makes is co-authored by former Trustee of Social Security & Medicare and NCPA Senior Fellow Thomas R. Saving and Andrew J. Rettenmaier, an NCPA Senior Fellow. The authors are Director and Executive Associate Director, respectively, of the Private Enterprise Research Center at Texas A&M University.

Editor's note: Contact Catherine Daniell to schedule an interview about the study findings.

The National Center for Policy Analysis (NCPA) is a nonprofit, nonpartisan public policy research organization, established in 1983. The NCPA's goal is to develop and promote private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector. Topics include reforms in health care; Medicare and Social Security; retirement; taxes; small business policy; and energy and environmental regulation.