Robbing Medicare to Pay for the Trade Deal

2017-07-10T16:11:09+00:00May 19th, 2015|Budget, healthcare, Max Richtman, Medicare|

Chances are if you’re a regular reader of this blog, the last issue you’d expect to see us write about is the hotly-debated and barely understood TPP (Trans-Pacific Partnership) trade deal.  After all, keeping up with and explaining policy issues impacting Social Security, Medicare and Medicaid is complicated enough, so yes, we really didn’t plan on wading too deep into the trade deal.  (Although you can read NCPSSM’s take on TPP and drug prices here.)

Unfortunately, that changed this week with news that Congress (with the White House running silent) intends to cut $700 million from the Medicare program to pay for a slice of the trade package.  We talked to Michael Hiltzik the Los Angeles Times about this back-door attack on Medicare:  

“The plan on Capitol Hill is to move the Trade Assistance Program expansion in tandem with fast-track approval of the Trans-Pacific Partnership trade deal, possibly as early as this week. We explained earlier the dangers of the fast-track approval of this immense and largely secret trade deal. But the linkage with the assistance program adds a new layer of political connivance: Congressional Democrats demanded the expansion of the Trade Assistance Program, Congressional Republicans apparently found the money in Medicare, and the Obama White House, which should be howling in protest, has remained silent.

Medicare advocates have taken up the slack by raising the alarm. “To take this cut and apply it to something completely unrelated sets a terrible precedent,” Max Richtman, head of the National Committee to Preserve Social Security and Medicare, told me. 

The Medicare raid was so stealthy that critics in Congress, including members of the Congressional Progressive Caucus, are just now gearing up to oppose it. “It was sort of buried” in the bill, Rep. Keith Ellison (D-Minn.), the caucus co-chair, told me Monday.”

Funding the Trade Assistance Program is necessary to help Americans workers expected to lose their jobs because of this trade deal receive job training and assistance.  However, telling American workers they have to trade away health care benefits in their retirement in order to get job training when they lose their job now is incredibly mercenary, even by Washington standards.

This isn’t the first time Medicare has been Congress’ piggy bank. This move follows last year’s vote to extend the Medicare sequester cuts into 2024 to cover a reversal of cost-of-living cuts to veterans’ pension benefits.  Shifting Medicare funds to other programs seems to be Congress’ new go-to budget approach.  That’s pretty ironic given that the GOP has spent millions of campaign dollars claiming Obamacare cut Medicare benefits (which is didn’t):

“This is different from the $700-billion cost reduction in Medicare enacted via the Affordable Care Act. That includes efforts to make the program more efficient by improving the incentives governing how doctors and hospitals deliver care to their patients, along with reductions in payments to Medicare Advantage plans. Richtman points out that much of this amounts to a reallocation within Medicare — “it’s piled back into the program by paying for improvements in preventive care, closing the ‘doughnut’ hole in Medicare Part D (the prescription drug benefit)” and other measures. In the broadest sense, the cost reductions in Medicare are netted against other healthcare costs within the Affordable Care Act.

By contrast, the new proposal would take $700 million out of Medicare, period. Nothing in the TAA will help Medicare function better, augment its services to members, or cover healthcare costs. Slicing into physician and hospital reimbursements may have the opposite effect, by reducing members’ access to care. “I’d characterize this as money stolen from Medicare,” Richtman says.”

We recommend you read Michael Hiltzik’s entire story at the Los Angeles Times