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Announcer

And now America's Healthcare Advocate , Cary Hall.

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Cary Hall

Hello, America. Welcome to America's Healthcare Advocate show broadcasting coast to coast across the USA. Our producer, Mr. Darren Wilhite. I'm your host, Cary Hall. This is your show, America. Thank you for joining us and making us one of the most listened to talk shows throughout the United States. We greatly appreciate all of you out there in our listening audience.

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Cary Hall

We've got 88,000 people in the last 28 days that downloaded one of these broadcast on the podcast platforms. We are on 12 podcast platforms, so we're on Pocket Casts, Speaker, Spotify, Google Podcasts, RSS Feed, TuneIn Apple Podcasts, SoundCloud, Stitcher, Overcast, Pandora and Amazon Music. We are also on YouTube and have our own YouTube channel, so we're getting a lot of people downloading these shows.

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Cary Hall

This one we're doing today is one you're definitely going to want to download and you're going to want to tell folks about because we are very fortunate to have with us Douglas Holtz-Eakin, who is the former head of the CBO and was also the chairman of the president's Council on Economics. We're going to talk to him today And the topic today is going to be Medicare and Social Security.

00;01;11;18 - 00;01;31;09

Cary Hall

And the reason I'm doing this is after the State of the Union address, when President Biden, you know, said that the Republicans wanted to cut Medicare and the Republicans stood up and said, no, we don't. And back and forth and back and forth, this is very confusing to people. So what's really going on with Medicare and what is really going on with these issues?

00;01;31;09 - 00;01;49;00

Cary Hall

And that's what we're going to talk today with Douglas about. And we're very fortunate to have him available to us to be able to do this. So that that's the topic that we're going to talk about today. By the way, we want to welcome our affiliate in Lincoln, Nebraska, KLIN AM 1400 brand new affiliate, FM, 99.3.

00;01;49;00 - 00;02;11;12

Cary Hall

We're happy to have those folks on board in the Cornhusker state and have them joining America's health care, because let me give you a little bit of information about Douglas Holtz-Eakin and why I wanted to bring him on, because I for lack of a better term, Douglas, I'm going to call you a policy wonk, okay? Because if there's anybody if there's anybody anybody that understands policy, you're the guy, OK.

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Cary Hall

So. Douglass, during 2001-2002, he was the chief economist for the president's Council on Economic Advisers from 2001 to 2003 and 2005 He was the director of the nonpartisan Congressional Budget Office. So let me just kind of give you a little information on the Congressional Budget Office, if you're not familiar with They are the nonpartisan group of people that score the bills that come out of the House and out of the Senate.

00;02;38;10 - 00;02;57;14

Cary Hall

They're the ones that say, oh, well, the bill is going to raise X number of dollars in new taxes and CBO will come back and go, no, it's not going to raise X number of dollars in new taxes. It's going to raise Y number of dollars in new taxes. Or the cost of this new program is going to be this and CBO will come back and say, no, that's not accurate.

00;02;57;14 - 00;03;26;00

Cary Hall

It's going to be something completely different. Okay. During his tenure at CBO, he assisted Congress as they address numerous policies, notably the 2003 tax cuts and the jobs and growth, tax relief, reconciliation and the 2003 Medicare Prescription Drug Bill and Medicare Modernization Act of 2005, and the push for Social Security reform during 2007 and 2008. He was the director of domestic and economic policy for Senator John McCain.

00;03;26;00 - 00;03;45;05

Cary Hall

So obviously, Douglas, you know your way around the block on these topics. And what drew me to this was an article that you wrote in American Spectator. We'll get to that in just a second. But before we do that, I want to read a short piece out of The Wall Street Journal on this whole issue of insolvency for Social Security and insolvency for Medicare.

00;03;45;05 - 00;04;09;02

Cary Hall

So this is out of The Wall Street Journal. It's written by William McGurn. And he says the Congressional Budget Office quietly pointed to a reality in the new report projecting that Social Security will become insolvent by 2032, earlier than expected. The CBO report also projects that Medicare hospital insurance Trust fund will be exhausted by 2033. And I want to point something out.

00;04;09;14 - 00;04;13;10

Cary Hall

The trustees, Douglas, have said the same thing. Am I right or wrong about this?

00;04;13;20 - 00;04;14;23

Douglas Holtz-Eakin

You're right about that. Yes.

00;04;14;24 - 00;04;37;00

Cary Hall

Okay. So let's just start with that piece about insolvency and this whole issue around. You know, you have the president now come out and say that he's got a plan that's going to carry for the next 25 years, Medicare and Social Security without having to increase taxes. We'll talk about that a little later. But let's let's just define the issue of insolvency and what's really going on here, Douglas.

00;04;37;20 - 00;04;58;11

Douglas Holtz-Eakin

Sure. Let's start with Social Security. So security's a fairly simple program. People pay payroll taxes, they flow into the Treasury and are deposited in the Social Security trust fund. Benefits are then paid to retirees. Then the money comes out of the Social Security trust fund. For a long time, the payroll taxes going in exceeded the benefits going out.

00;04;58;11 - 00;05;20;09

Douglas Holtz-Eakin

And so there was extra accumulation in the trust fund. Now, the reverse is true and the trust fund is going down. And in ten years, the CBO estimates it will hit zero. At that point, the law says that you can only pay benefits out of the trust fund, so there won't be enough money in the trust fund each year to pay full benefits.

00;05;20;22 - 00;05;39;16

Douglas Holtz-Eakin

Estimates are they'll be about 80 to 85% of the necessary money. And so in the absence of a change, people in retirement get a 20% across the board cut in their retirement standard of living. That's unthinkable. But that is what happens if you stay on autopilot over the next ten years. That's Social Security.

00;05;39;19 - 00;06;07;11

Cary Hall

So that's automatic. That's not that's that's that's not something that is debatable. That is a fact. Okay. That's the that's the way the law is written. That's the way the program is set up. And the reason that we're experiencing this inverse relationship, I'm assuming, is because the population of working people is declining overall as the population. Those of us that are chronologically challenged continues to increase, which continues to increase across right or wrong.

00;06;07;24 - 00;06;27;16

Douglas Holtz-Eakin

You're right. One society was set up to have five workers for every retiree. They're now going to be two workers for every retiree as the baby boom generation retires. And we have a permanent shift to an older population. It's not it's not something that's a bump and goes away. It's just the new the new world. So the program is not built to accommodate the demography we're facing.

00;06;27;17 - 00;06;53;03

Douglas Holtz-Eakin

That's all there is to it. For the listeners, the the Medicare situation is not even close to that promising Medicare has four parts. The original part, Part A was for inpatient care and hospital sort of major medical bills. It's an insurance product for that. And it was built like Social Security payroll tax coming in, trust fund payments going out to hospitals and doctors for inpatient care.

00;06;53;15 - 00;07;10;28

Douglas Holtz-Eakin

That's the the trust fund that is going to run out of money in the next five years. If it runs out of money, it's slightly different. The Social Security, the law says that seniors are entitled to the care, so they they have to be cared for. But you're you're not allowed to reimburse doctors and hospitals unless there's money in the trust fund.

00;07;10;28 - 00;07;22;07

Douglas Holtz-Eakin

So if we do nothing, we get this marvelous situation where the law compels people to provide free care to seniors. I think that would be an enormous uproar in the American medical community.

00;07;22;13 - 00;07;25;14

Cary Hall

There would be a there would be a train wreck like you have not seen.

00;07;26;00 - 00;07;48;07

Douglas Holtz-Eakin

Right. Yeah. So that's part A and part A is the good news. With the advent of a lot of the outpatient care, Medicare has a Part B to cover outpatient care. People pay premiums for that for that part B coverage, but their premiums cover only 25% of the cost of the program. 75% of this is subsidized by general revenue coming out of the Treasury.

00;07;48;24 - 00;08;12;18

Douglas Holtz-Eakin

There's a part D, which is the drug program I worked on at CBO. This covers the cost of outpatient prescription drugs. You pay premiums for that as well. Again, the premiums cover 25% of the cost of the program. 75% is being subsidized by the general revenue. And then there's a part C, which is an omnibus, one size covers all insurance policy, much like a HMO or a PPO.

00;08;12;18 - 00;08;37;01

Douglas Holtz-Eakin

And in the commercial market. And again, you pay a premium that covers 25% of the cost, but 75% is subsidized by by general revenue. The point of this is that Medicare was never designed to be financially self-sufficient. It has been living off the Treasury transfers from the inception, and as a result, it is by itself responsible for about a third of all federal debt outstanding.

00;08;37;06 - 00;08;50;04

Douglas Holtz-Eakin

It is bleeding red ink. So the trigger point for this discussion is just one part of Medicare. Even if you fixed Part A, you wouldn't have touched the other three parts and they are generating enormous amount of red ink.

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Cary Hall

So you've got you've got two other parts Part B now, actually three, part B, part D and part C, which are the Medicare Advantage plans for all of you out in the audience. That is what a part C is. Those Medicare Advantage plans that you have that are zero premium, meaning you're paying nothing for the plan, okay, But it offers benefits and then it offers more benefits.

00;09;12;18 - 00;09;28;16

Cary Hall

We're going to talk about that as we go through the show today that is coming out of the federal government. They are paying for that and they're paying the insurance carriers to administer those programs, administer the claims and provide those benefits. Is that is that a fair analogy of that?

00;09;28;16 - 00;09;30;08

Douglas Holtz-Eakin

Does It is exactly right.

00;09;30;17 - 00;09;53;03

Cary Hall

All right. So so when we look at this whole thing, the part that that is and we're coming from the break here. So when we come back, the break, we'll talk more about this. But the sad part about this is this is a third rail of politics that nobody wants to touch. Okay. And we'll talk a little bit about Senator Rick Scott and what he has proposed and how he's become a lightning rod for this.

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Cary Hall

We come back from the break. You're listening to America's Healthcare Advocate broadcasting here on the HIA Radio Network, coast to coast across the USA. Stay tuned. We've got more with Douglas Holtz-Eakin, former head of the CBO and president's Council on Economic Affairs. So stay tuned. We've got more. We'll be right back after the break.

00;10;12;17 - 00;10;45;15

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00;10;45;25 - 00;11;13;01

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00;11;13;29 - 00;11;33;10

Cary Hall

Welcome back. You're listening to America's Healthcare Advocates show broadcasting coast to coast across USA. Here on the HIA Radio Network. You can find out more about us by going to the website America's Healthcare Advocate dot com. All the shows are listed up there, the podcast platforms and YouTube. Our producer, Mr. Darren Willhite.

00;11;33;18 - 00;11;58;21

Cary Hall

I'm your host Cary Hall. Joining me from Washington, D.C., Douglas Holtz-Eakin from the American Action Forum. We're very happy to have him on board. He is the former director of the CBO and the chief economist for the President's Council of Economic Advisors. He certainly knows his way around this topic. And we are talking about Social Security and Medicare and we're talking about all the problems that are attached to them as we have an aging population.

00;11;59;15 - 00;12;16;26

Cary Hall

And you heard Doug say in the beginning, initially we had five people contributing to the Social Security fund for every one person receiving benefits. Today it's 2 to 1. And that and when you know, when do we cross the line? When it's 1 to 1, Doug, I mean, how far away are we from that?

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Douglas Holtz-Eakin

Well, fortunately, we're pretty far away from that. But the trouble is the system can't survive a 2 to 1. And that means that's the fundamental need for reform.

00;12;25;12 - 00;12;54;05

Cary Hall

So so here's an interesting question. All you know, we have this huge influx of of migrants, you know, or illegal aliens, whatever you want to call it, they all go they all work. Okay? Most of them work in some form where they're taxed is that can have any impact on this at all or even with the 2 to 3 million that have come into the country recently over the last two or three years, Is that going to start to is there a way for that to impact the tide of this, or is that just pie in the sky?

00;12;54;06 - 00;12;55;10

Cary Hall

If somebody brings that up.

00;12;56;00 - 00;13;06;16

Douglas Holtz-Eakin

It's already happened. Typically, if someone is here illegally, they are working and under an assumed identity with a falsified Social Security number. So they're paying taxes.

00;13;06;29 - 00;13;07;03

Cary Hall

OK.

00;13;07;25 - 00;13;12;02

Douglas Holtz-Eakin

They are contributing to the financing of their retirement generation. They're just not eligible for benefits.

00;13;12;09 - 00;13;15;24

Cary Hall

And so so they're they're paying in, but they're not going to get anything out.

00;13;16;05 - 00;13;28;12

Douglas Holtz-Eakin

Exactly. So that's the the impact of those here illegally. If you come legally, of course, you pay taxes and then ultimately you will if you become a citizen, you'll be eligible for benefits.

00;13;28;12 - 00;13;50;11

Cary Hall

Okay. So so let's go back to what closed out that last segment. So I said this is the third rail of politics. This is the piece that nobody wants to touch. All the things that we went through, the insolvency of Medicare, the insolvency of Social Security, you know, we're you know, we're charging premiums that that covered 25% of the cost of part B, 25% of the cost of Part D, And whatever the premiums cover.

00;13;50;11 - 00;14;10;23

Cary Hall

And since our premiums, since probably 80% of the people on Medicare Advantage plans have zero premium plans now. So there's nothing being contributed on the premium side there. Nobody wants to talk about this, but there is no way on God's green earth the people in the House and the Senate, both Democrats and Republicans, don't know this.

00;14;10;23 - 00;14;44;06

Douglas Holtz-Eakin

The irony of this situation is that doing nothing is bad for both sides. If you're a conservative who's worried about the accumulation of national debt and the fact that we are fiscally unsustainable trajectory where we can have interest costs that are bigger than the Pentagon inside of ten years, all of that is a call for action. If you're on on the liberal side, the progressive side, that once these programs and wants them to stay around in their current form, they can't do nothing means that eventually you get a across the board cut and Social Security doing nothing means that the Part A trust fund exhausts.

00;14;44;15 - 00;14;53;22

Douglas Holtz-Eakin

So both sides have a reason to move and to reform these programs and make them sustainable. And both sides are at a standoff. It's remarkable.

00;14;54;18 - 00;15;11;01

Cary Hall

And so when somebody has the guts to step out there with the solution, I'm not saying it is right or wrong, indifferent or anything else. And that was Senator Rick Scott, Republican out of Florida, who came up and said, let's set this up. So it sunsets every five years and we can evaluate the programs and make changes as needed.

00;15;11;05 - 00;15;28;17

Cary Hall

And he was crucified for this. His own party crucified him for it. Okay. So you had President Trump initially saying we're not touching Medicare, we're not touching Social Security. Well, the problem is, while you're not touching it, it's going broke. All right. Yeah. And when you crossed the Rubicon, we're not coming back. That's the other part of the problem.

00;15;28;17 - 00;15;52;10

Cary Hall

So then we have President Biden come out and say that he has a program that he will extend the life of Medicare trust fund by 25 years without benefit cuts while lowering the costs for Medicare beneficiaries. The program's hospital insurance trust fund is set to run out of money, this says, in 2028. And then he's talking about taxing people in the $400,000 bracket to $250,000 a year.

00;15;52;14 - 00;16;08;11

Cary Hall

Well, that may sound like a lot of money, but it's not, you know, $250,000 for a family of four. Is this even doable with what he's I mean, it seems to me that that that that that's a false narrative that's just not going to fly.

00;16;08;11 - 00;16;27;04

Douglas Holtz-Eakin

So let's be very clear. Hart has a payroll tax going in and benefits going out. And it's it's running out of money. So you have to reform Part A. Is he changing the costs of hospital care to make less money, go out? No. No attempt to do that. Is he changing the payroll tax going in? No, No attempt to do that.

00;16;27;04 - 00;16;54;14

Douglas Holtz-Eakin

So he's not reforming Part A in any way. He's imposing a surtax on people making over 400,000 on their net investment income and is going to just dump that money into the Part A trust fund and pay benefits. And so it's not a medicare reform of any type. It's just another big transfer from the Treasury. Here's the problem that money might otherwise have gone into the Treasury to fund something else like Part B, Part C or Part D.

00;16;54;21 - 00;16;59;11

Douglas Holtz-Eakin

This doesn't touch any of the problems in Medicare, okay? Pretends it can go get more money.

00;16;59;12 - 00;17;15;24

Cary Hall

Okay, so I, I want to stop you right there. So what you're saying is what he is proposing only applies to Part A, It doesn't apply to Part B, it doesn't apply to Part C, it doesn't apply to Part D, I. I mean, somehow that magically got left out of the conversation.

00;17;15;24 - 00;17;23;01

Douglas Holtz-Eakin

Indeed, this isn't a solution to any of Medicare's problems. It's just a big tax increase. And the transfer. That's it.

00;17;23;18 - 00;17;53;02

Cary Hall

You know, that's remarkable. I mean, you know, you would you would think that somebody would have brought this up and said you're only even if this works, you're only dealing with Part A, you're not dealing with these other three pieces of which only 25% are being paid by the participants on two of them. The third one, as I said, because the zero premiums are so popular and every plan from United to Blue Cross to signal to Aetna has got the zero premium.

00;17;53;08 - 00;18;00;06

Cary Hall

They're not paying anything. Okay. So this is this is clearly a train wreck waiting to happen.

00;18;00;27 - 00;18;22;20

Douglas Holtz-Eakin

Oh, yeah, that that's exactly right. And so for someone like me, it's extrodinarally frustrating to watch this debate and have misrepresentations of what's going on, misrepresentations of what what it means to, quote, fix it. And for the American people who rely on Medicare and who rely on Social Security, it's a great disservice, in my view. Think about somebody who's 55 and in ten years will retire.

00;18;22;28 - 00;18;25;08

Douglas Holtz-Eakin

Do they know what they're going to get from social Security? No.

00;18;25;29 - 00;18;37;29

Cary Hall

No, they don't. They don't know. Oh, no. And I've got you know, I've got children in their late thirties, early forties, and I've told them don't anticipate that you're going to get Social Security, especially not in the numbers that we're receiving it.

00;18;38;25 - 00;18;53;27

Douglas Holtz-Eakin

So it's again, this the areas full of irony, Social Security was invented to reduce the uncertainty about income in retirement and make people have a better life. It is now the source of uncertainty about income in retirement that's making their lives worse. Yeah, and.

00;18;53;27 - 00;19;14;25

Cary Hall

Here's the other part. and we’ll roll up on the break really quick. When when Social Security is put in place, the life expectancy of a male in this country was 15 to 20 years less than it is now. Okay. And as we continue to have greater and greater life expectancy, that has another impact on these funds where that money won't be there, both Social Security and Medicare.

00;19;15;00 - 00;19;35;10

Cary Hall

So this is a significant issue. When we come back from the break, we're now going to get into what's really happening right now with Medicare, because there are cuts coming in 2024 that you have no idea are coming. We're going to talk about that with Douglas Holtz-Eakin, when we come back. Former head of the CBO and President's Council on Economic Affairs.

00;19;35;11 - 00;19;48;21

Cary Hall

Stay tuned. You're listening to America's Healthcare Advocate. Broadcasting here on the HIA Radio Network. Coast to coast across the USA. We've got more. Stay right there.

00;19;48;21 - 00;20;00;09

Cary Hall

And welcome back. You're listening to America's Healthcare Advocate show broadcasting coast to coast across the fruited plain here on the HIA Radio Network. You can find out more about us by going to the website America's Healthcare Advocate dot com.

00;20;00;27 - 00;20;17;28

Cary Hall

We're on 12 podcast platforms. This is an important show. You want to tell somebody about this. You want to tell your neighbor, your friend, someone in your family, your church group, whatever. Go up to one of the podcast platforms to show. Be up there in total. We're videoing the show as well, so you can watch it on YouTube if you want to do that.

00;20;18;13 - 00;20;40;19

Cary Hall

It's an important topic. You know, I'm chronologically challenged. There are a whole bunch of us out there and this is an issue that everybody is going to have to deal with. And by the way, if you are one of those younger people, this is important for you to hear because this is what's going to determine whether you have benefits when you get to that 65 year old mark for retirement.

00;20;40;27 - 00;21;04;21

Cary Hall

So so joining us today, Douglas Holtz-Eakin. He is from the American Action Forum. He is the former director of the CBO and the chief economists for the president's Council on Economic Advisers. We are very fortunate to have him joining us from Washington, D.C. These are the a Zoom conference. It's amazing what technology can do. Doug, so you wrote this piece and it just grabbed me when I saw it.

00;21;04;21 - 00;21;35;10

Cary Hall

And that was the economics. He spelled the EAKINonomics of Medicare Advantage and cutting Medicare. And so you went into a short piece here yesterday, The Better Medicare Alliance, BMA released a study by Avalere Health with scintillating prose on February 1st, the Centers for Medicare and Medicaid Services CMS released a 2024 advance Notice, an annual regulatory document that describes the agency's proposed payment coverages for the next plan year.

00;21;35;10 - 00;21;55;26

Cary Hall

It added, Avalere estimates a decrease in the payments could result in $540. Let's just start there. So first of all, you've got Republicans saying we're not cutting Medicare. You've got Democrats saying they are cutting Medicare. In the meantime, what's really happening is Medicare is being cut by CMS and the bureaucrats in CMS, correct?

00;21;56;22 - 00;22;22;29

Douglas Holtz-Eakin

That's correct. And so for context, traditional Medicare parts A, B and D are will soon be overtaken by Medicare Advantage, The Part C we discussed as early as next year. The majority of seniors will get their Medicare through Medicare Advantage. So it's a really important part of Medicare and an increasingly important part of Medicare. And every year CMS announced it's announces its reimbursement plans.

00;22;22;29 - 00;22;49;13

Douglas Holtz-Eakin

And when it put out this announcement, it did a couple of things, one of which was based on past audits. It decided to carve back some money. The second thing it did is it changed the way it paid plans for dealing with riskier patients, those who have more health conditions, because it simply got rid of some some risk classifications and essentially said, okay, you're pre that pre-diabetes last year we gave you money to keep that person from becoming a diabetic.

00;22;49;13 - 00;23;11;14

Douglas Holtz-Eakin

This year we're not going to do that. We're not going to give you the same amount of money to care for that person. And the total cost would come out to be about just $540 per beneficiary. So that's up a lot of money. What will happen left unchanged. What is most likely to happen is that first, if your plan offers you any extra benefits above and beyond the basic package.

00;23;11;14 - 00;23;29;03

Douglas Holtz-Eakin

So if you're getting vision or dental and things like that, that'll probably go away first. And the zero premium plans will be next in line and you'll have to start paying a premium because they're not going to get as big a check from from CMS. So that's that's what's at stake. It's really extra benefits and premiums.

00;23;29;23 - 00;23;49;23

Cary Hall

So you see this coming in. So in two pieces. And so there are a lot of extra benefits because as you know, you know, CMS has layered money into these plans over the last three or four years. So, you know, we've got plans giving out cash cards now, debit cards, so that you can go to the pharmacy and do over-the-counter medications.

00;23;49;23 - 00;24;14;20

Cary Hall

You know, we've got mail service being delivered to people's homes. In certain cases. We've got transportation available. We've got dental benefits in some of the plans. You've got dental benefits of $2,000 a year. Yeah. And and obviously you've got vision benefits as well. And some of the plans, those are as high as $1,000 a year. So you think based on what this study says, those are the first places they're going to go cut right out of the gate.

00;24;14;20 - 00;24;16;17

Cary Hall

That's the first thing. It's going to have to be cut.

00;24;17;04 - 00;24;35;12

Douglas Holtz-Eakin

Yeah, I think an insurer can manage this any way they want. They But knowing how sensitive seniors are to premium increases, they're not going to look. They're first they're going to look their last and they'll do everything they can on the benefits front first. And when they run out of room to cut, they'll move to the premiums.

00;24;35;18 - 00;24;51;05

Cary Hall

So that that $540 now is is that the total estimate or I saw in here further the down in this piece that we were talking about a 3.12% reduction in planned payments, does that encompass 540 or is that 3.12 on top of that?

00;24;51;28 - 00;24;53;26

Douglas Holtz-Eakin

That's the $540. That's what that is.

00;24;53;29 - 00;25;03;06

Cary Hall

Okay. So so that's interesting. So so so let's just talk about that for a minute. So, you know, you've got all this back and forth about who's cutting Medicare and here we go.

00;25;04;22 - 00;25;17;08

Douglas Holtz-Eakin

This is cutting Medicare. There's there's no way around it. And and it's it's these are plans that have enormous popularity of if you do so, they've exploded. They've exploded the past. Yeah.

00;25;17;13 - 00;25;19;00

Cary Hall

Yeah. They've completely exploded.

00;25;19;14 - 00;25;38;10

Douglas Holtz-Eakin

So and you want to ask, you know, from a health policy point of view, why is it that they can offer extra benefits? Well, answer is they can deliver the basic benefit package promised in traditional Medicare more cheaply, and as a result, they have extra room to offer more benefits. And so that means they're providing a better value package.

00;25;38;10 - 00;25;50;27

Douglas Holtz-Eakin

They're covering the care at a lower cost. And that's what we want our health system to do. And this is cutting and penalizing exactly the part of Medicare that's doing the best. So that's a troubling decision in my view.

00;25;51;12 - 00;26;01;06

Cary Hall

Yeah, this is interesting. So let's talk about this for a minute. So Medicare fraud and waste is is a big number. I'm trying to recall.

00;26;01;08 - 00;26;03;13

Douglas Holtz-Eakin

$80 billion a year ballpark.

00;26;03;13 - 00;26;05;12

Cary Hall

Right now. How much is 80,000,000,000 billion.

00;26;05;12 - 00;26;05;21

Douglas Holtz-Eakin

Dollars.

00;26;05;26 - 00;26;30;07

Cary Hall

A year? And when you contrast that with Medicare fraud and waste on the Medicare Advantage plans administered by the health insurance carriers, it's 1% or less. Right? That's the contrast. So when you say it's the most efficient method, it is the most efficient method for delivering these services because the insurance carriers are doing the job that Medicare itself can't do, hasn't done, won't do.

00;26;30;15 - 00;27;01;12

Cary Hall

Okay. When it comes to fraud and waste, which is this $80 billion that that that you're that you're talking about. So it seems to me that this is somewhat ridiculous that we're going to go in and we're going to throw the baby out with the bathwater, especially at a time when we know we're heading toward insolvency. All these plans now we're going to turn this thing around and we're going to the very people that are providing care in the most efficient manner are going to be penalized for what they're doing.

00;27;02;20 - 00;27;27;24

Douglas Holtz-Eakin

But at some level, this is simply a philosophical move that the private carriers are capitalist entities, their private firms, and they're the ones delivering Medicare Advantage. And this is not an administration and a philosophy that's that's friendly toward the private sector. They want the government doing things well. That's traditional Medicare. And so they are trying to tilt the playing field against private sector entities.

00;27;28;05 - 00;27;52;24

Cary Hall

See, and that doesn't make any sense because the American public has spoken, as you said, the migration to Medicare Advantage plans is enormous. Okay. And the problem with the original Medicare and we've made this point in this broadcast many times people, is that original Medicare on Part B leaves you owing 20% of whatever that services you. So you had a hip replacement and it's $153,000.

00;27;52;29 - 00;28;12;24

Cary Hall

You just got to pay 20% of that. That's what Medicare Advantage gets rid of. That's what Medicare supplements get rid of. And what's going to wind up happening. What you're hearing, Doug say is if they're trying to push this back to Medicare and the question is why? Well, it doesn't make any sense when you've got to program this piece of the program is working.

00;28;12;24 - 00;28;22;03

Cary Hall

So now we're going to turn it upside down on its head and and and and try to regulate it to a point where it doesn't work anymore.

00;28;22;03 - 00;28;37;12

Douglas Holtz-Eakin

That's my concern. You know, we we know that health care costs are a big part of the federal budget. We know that health care costs in the private sector are a big part of people's lives. When you find something that works, let's lean on it more and try to improve it instead of doing this. This is a real step in the wrong direction.

00;28;37;19 - 00;28;57;18

Cary Hall

And you know what's going to happen? The general public is going to look at the insurance carriers and blame the carriers because they don't understand the argument. They don't understand what's going on here. And that's why I wanted to do this. show I wanted you on here today. This is in place by CMS. This isn't this isn't the the Democrats in the House or the Senate or the Republicans in the House or Senate.

00;28;57;23 - 00;29;23;10

Cary Hall

This is CMS. This is a bureaucracy with the blessing of the Biden administration. Okay. That's moving to cut Medicare. And I want to make that point to all of you. Listen, cuts are coming to Medicare. They're coming out of CMS under this administration. And you heard Douglas just say again, you know, we've got progressive philosophy here. I don't do political on the show except when it impacts these kinds of issues.

00;29;23;14 - 00;29;48;28

Cary Hall

But these people want to push people back to original Medicare. You may recall when when all of this change in Medicare Advantage came into place, there was a huge pushback from a lot on the Democrat side saying this was the wrong thing to do, wasn't going to work. Well, it turns out it's worked really well when you compare the fraud and waste on the administered side by the insurance carriers with the fraud and waste on the original Medicare side, it's night and day.

00;29;49;04 - 00;30;06;11

Cary Hall

Okay. And here's the other thing that doesn't make any sense, Doug. This is part that. And we're coming on the break here, so I will visit this. We come back is if you're going to get rid of programs like managing type two diabetes and not having a move into type one, how much sense does that make?

00;30;06;11 - 00;30;10;09

Douglas Holtz-Eakin

You're cutting Exactly. The population needs to pay the most attention to, so it’s quite perverse.

00;30;10;20 - 00;30;30;12

Cary Hall

And the ones that cost the most money when they move from type two to type one. All right. We're on the break. We're coming from the break. We're going to be right back after the break. We've got more. Stay tuned. You're listening to America's Healthcare Advocate broadcasting here on the HIA Radio Network Coast to coast across the USA. Stay there. We'll be right back with more.

00;30;30;12 - 00;30;53;01

Cary Hall

Welcome back. You're listening to America's Health Care Advocate show broadcasting coast to coast across the U.S. You can find out more about us have gone to the website America's Healthcare Advocate dot com. This is an important show we're very fortunate to get Douglas Holtz-Eakin on here today to talk about these issues and sort this out because what I'm doing here is giving you fact this is not fiction, this is not political, this is fact.

00;30;53;01 - 00;31;23;06

Cary Hall

This is what's going on. It's what's going to happen in 2024. And if you're a seasoned citizen out there, one of us is chronologically challenged and you're on a medicare Advantage plan. This is going to impact you directly. And you heard Douglas say the first thing it's going to go are going to be ancillary benefits. So all of those good things that are in there now in a lot of these plans, like meals on Wheels, transportation to merit, to appointments, those those debit cards that allow you to buy things over the counter, those are going to go out the door first.

00;31;23;06 - 00;31;41;10

Cary Hall

Okay. And the second thing that's going to happen and Douglas said it is zero premium. They will not be able to hold the line on zero premium. The carriers won't because the money's being cut by CMS. And what the first thing that's going to happen in general public is they're going to throw rocks at the health insurance carriers because they're doing this so they can make more money.

00;31;41;18 - 00;32;17;19

Cary Hall

That's not the issue. The issue is that the reimbursements are being cut. When the reimbursements get cut, this is what happens and this is what's happening now. So, again, joining us, Douglas Holtz-Eakin, he is the former director of CBO and chief economist for the president's Council on Economic Affairs. So let's so it just seems remarkable to me that you've, you know, in the private sector over here on the employer sponsored side, you've got every kind of wellness program you can think of being put in place, all kinds of incentives to keep people healthy, get them to deal with things like type two diabetes so it doesn't roll over into type one.

00;32;17;24 - 00;32;40;25

Cary Hall

And yet here we have the biggest government agency managing health care in the country, and you're doing just the opposite. You're going to pull away the management of type one excuse me, type two diabetes. And what's going to happen is you're going to have people moving into type one diabetes because they're not managing the disease. They're not getting the A1C, they're not taking their metformin, they're not doing the things they're supposed to do.

00;32;40;28 - 00;32;43;00

Cary Hall

It just makes absolutely no sense. Doug.

00;32;44;07 - 00;33;06;22

Douglas Holtz-Eakin

I agree. I mean, that the push for two decades now has been to move the system away from fixing things after the fact and get ahead of problems and have people live healthier lifestyles and not end up in an acute care setting which is debilitating and expensive. So this was part of that effort and these cuts would undo it to some extent.

00;33;06;27 - 00;33;26;02

Cary Hall

Yeah, and it makes no sense at all because the whole idea is to hold down costs. You hold down costs, then you have better benefits for everybody in the program. All right. So we've got about 5 minutes left here. What do you see as solutions? Let's just start with Medicare to this Medicare issue. I mean, some people have talked about raising the age when you're allowed in.

00;33;26;06 - 00;33;36;08

Cary Hall

There have been a number of different things have been kicked around over a period of time to make changes. What do you see as practical solutions? Let's start with Medicare. And if we have time, we'll do Social Security.

00;33;36;08 - 00;33;59;18

Douglas Holtz-Eakin

Doug Medicare's really hard on. So I'll tell you my starting point. My starting point is to put Medicare on a budget right now. Part B, C and D all have an opening to draw on the U.S. Treasury and that allows the participants in there to simply not manage things effectively. They just take more money from the Treasury and solve their problems.

00;33;59;18 - 00;34;22;21

Douglas Holtz-Eakin

That way. We know Medicare Advantage plans can manage costs, they can manage their patient populations, they could make cuts, make contracts with the providers and manage cost effectively. Let's ask the rest of Medicare to try to compete on a level playing field with budgets, with Medicare Advantage. And if it can do it, great, we will have solved big part of the budget problem.

00;34;22;26 - 00;34;38;20

Douglas Holtz-Eakin

We will have extended the longevity of Medicare and that would be a good thing. But in the end, we want on a level playing field where you have to actually hit a budget to deliver the highest quality care that Americans deserve. And I don't care how that happens. That's the horse race I'd like to set up.

00;34;38;23 - 00;35;02;13

Cary Hall

All right. So why you know, why aren't we hearing that from Medicare? Let's just clearly you're not going to hear this from what I would call liberal progressives. But there are liberal Democrats, as there are conservative Republicans who could see the light of day with this and could bring this forward. Yet nobody is articulating this in the simple, understandable terms that you just gave.

00;35;02;19 - 00;35;23;15

Cary Hall

Okay, that's a great starting point. Okay. You know what? Sauce for the goose, The sauce for the gander. Okay. So why aren't we hearing anybody? I mean, nobody on the Republican side said Rick Scott was crucified because he he dared step out there and talk about doing something to make changes. Clearly, there needs to be a solution.

00;35;24;02 - 00;35;44;10

Douglas Holtz-Eakin

All he asks them to do is look at the program every five years. He didn't even say, What do you do to it? I mean, that's the minimum we could do, right? Right now, everything is running on autopilot except MA which every year CMS gets to mess with. Everything else is running on autopilot and and that's not okay because it's not serving the beneficiaries well.

00;35;44;11 - 00;36;06;03

Douglas Holtz-Eakin

They're not getting the highest quality care. They're doing the screening for early onset diabetes, and it's costing enormous amount of money, which no one likes either out of their pocket or out of the federal treasury. So we need to deal with that set of problems and then we can move on to Social Security, which is in the end, something that six bipartisan commissions have looked at and have all come up with the same basic menu.

00;36;06;06 - 00;36;30;12

Douglas Holtz-Eakin

And the menu is, well, we're going to raise taxes, will go back to taxing a bigger fraction of wages. Still have a cap, but a higher cap so we tax 90% of wages. And on the benefits side, believe it or not, the minimum benefits to low. So raise it and then adjust for inflation more intelligently. And we over adjust right now and the affluent will get less as the rate of return than in the less affluent.

00;36;30;12 - 00;36;39;29

Douglas Holtz-Eakin

Just more aggressively means tested. It can be done. That's pure politics. The analytics of Social Security are nothing. You can fix it at your desk many years.

00;36;40;11 - 00;37;02;10

Cary Hall

You could fix that at your desk. Douglas I don't if anyone can fix it at theirs but Medicare is so Social Security is the easier fix the most difficult fix is Medicare and that's that's the one that nobody wants to touch and nobody wants to talk about. And this is very interesting. And it's suffice to say, people you've heard it now and we did exactly what I said we were going to do.

00;37;02;16 - 00;37;22;14

Cary Hall

We we separated fact from fiction here. Now you know what's going to happen. It's going on right now. You're going to see Medicare Advantage get cuts next year. We'll see if the zero premiums survive. The carriers are going to move off of the ancillary benefits. Those are going to come to a screaming halt or at least be reduced dramatically depending on what you know, they decide to do.

00;37;22;20 - 00;37;33;08

Cary Hall

But there are the cuts are in place and they're coming and there's no way around it. And that's why I wanted to do the show and I wanted to explain it to you. Thank you very much, Doug, for doing this. I have a feeling you're going to be back.

00;37;33;23 - 00;37;35;25

Douglas Holtz-Eakin

Well, I appreciate you having me on. It's been great fun.

00;37;36;00 - 00;38;20;17

Cary Hall

But We'd love we'd love to have you back, because I'm sure this is going to be an ongoing conversation as we move through the year. So thank you very much. And I close, ladies and gentlemen, with this thought from Albert Einstein, the one who follows the crowd, usually gets no further than the crowd. The one who walks alone is likely to find himself in places no one has ever been. Remember friends, It's a funny thing about life. If you refuse to accept anything but the very best, you most often get it. Thank you for listening to America's Healthcare Advocate Show broadcasting coast to coast across the U.S.A. Goodbye, America.