A new Obama administration report claims that health reform (ObamaCare) will save taxpayers $200 billion in the Medicare program through 2016. To what do we owe this good fortune? A good chunk of the savings, we are told, will be produced by lowering "excessive payments" to Medicare Advantage plans. These are plans operated by such private insurers as Aetna, Humana and WellPoint. They typically provide seniors with the kind of comprehensive coverage non-seniors have.
Another source of savings will be lower payments to doctors, hospitals and other providers to reflect their "improved productivity."
Finally, the administration expects efficiencies gained from "demonstration projects." These include experiments in paying more for better performance, paying package prices and encouraging a new type of HMO, called Accountable Care Organizations.
The administration's report was released on the eve of the release of this year's Medicare Trustees report, but whereas the Trustees report is a serious document, reflecting accepted accounting principles, the administration's document was clearly a piece of political propaganda — one that stretched the truth so much that the word "spin" would be a charitable description. For example, the administration's document failed to mention that: