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Trump’s Executive Order Could Bankrupt The Medicare Trust Funds In Less Than 5 Months

February 29, 2020 By Dan Munro

THE VILLAGES, FLORIDA, UNITED STATES – 2019/10/03: U.S. President Donald Trump signs Executive Order #13890 at the Sharon L. Morse Performing Arts Center. (Photo by Paul Hennessy/SOPA Images/LightRocket via Getty Images)

On October 3rd of last year, President Trump signed a Executive Order (EO) #13890 with sweeping implications for how Medicare is priced and, by extension, how much the government winds up spending annually on Medicare. In fact, the whole EO signing ceremony is really designed to satisfy the optics of legislative action where none is legally permissible. Congress still holds the purse strings, so any increases to Medicare spending would obviously require congressional approval. Executive Orders have all the pomp and appearance of real legislation – including the requisite chorus of fist pumps and smiling faces – but they aren’t.

Congress keeps a pretty firm hand on the reins when it comes to Medicare spending. I don’t know what legal authority the administration hopes to draw on, especially if what it wants to do is increase the prices it pays for services through traditional Medicare.

Nicholas Bagley, Law Professor – University of Michigan

Independent of Trump’s legal authority through executive decree (I’m not an attorney), the actual wording of the EO appears to be hastily written and fraught with ambiguity around intent, but then that also makes perfect sense when speed to the signing ceremony is the top priority. Here’s the wording in the EO that I’m referencing.

Section 3(b): The Secretary, in consultation with the Chairman of the Council of Economic Advisers, shall submit to the President, through the Assistants to the President for Domestic and Economic Policy, a report within 180 days from the date of this order that identifies approaches to modify Medicare FFS payments to more closely reflect the prices paid for services in MA and the commercial insurance market, to encourage more robust price competition, and otherwise to inject market pricing into Medicare FFS reimbursement.

Long sentencing aside, HHS Secretary Alex Azar is to submit a report within 180 days “that identifies approaches to modify Medicare Fee-For-Service (FFS) payments to more closely reflect the prices paid for services in MA and the commercial insurance market.” Taken literally, that’s a huge price increase – and could easily bankrupt the Medicare Trust Funds (yes, there’s more than one) in a matter of months. In fact, many argue that our current healthcare cost crisis stems from inelastic pricing in the commercial insurance market.

The U.S. spends twice as much per person on health care as other high-income countries. The reason we spend more is because of higher prices, and those higher prices are mainly in the commercial insurance market. When it comes to keeping health care prices down, it’s hard to see how making Medicare look more like the private insurance market would be progress.

Larry Levitt, Executive Vice President for Health Policy, Kaiser Family Foundation

Granted, it’s relatively easy to be sweeping with reform ideas when healthcare pricing is so large and opaque, right? I mean who even knows what pricing looks like in “the commercial insurance market?” We all know it’s highly variable, but that’s not very mathematical, so how can anyone really score the total cost if commercial pricing is so mysterious? In the phrase made famous by Matt Damon in the movie The Martian, “let’s do the math.”

Using claims data from about 1,600 hospitals across 25 states, RAND Health Care published a study earlier this year suggesting that the national average for commercial inpatient pricing was +241% of Medicare pricing (2017). Here’s the actual quote:

Relative prices, including all hospitals and states in the analysis, rose from 236 percent of Medicare prices in 2015 to 241 percent of Medicare prices in 2017.

RAND Health Care Study: Price Paid to Hospitals by Private Health Plans Are High Relative to Medicare and Vary Widely

While RAND didn’t extend their analysis to include traditional (non-surgical) outpatient pricing – it’s reasonable to assume that commercial rates for outpatient prices are on par with inpatient prices – but let’s err on the side of caution and use +159% of Medicare for outpatient commercial pricing. Combining these two percentages equals a blended rate of +200%. At the simplest level, the RAND study suggests that healthcare pricing through commercial insurance is roughly double what Medicare is priced at. That’s the first variable.  

The second variable is annual Medicare spending. The Centers for Medicare and Medicaid Services (CMS) projects that Medicare will spend about $857 billion in 2020 – but let’s round down for simplicity to $850 billion. Using the blended rate from above (2X), a rough calculation suggests that by using commercial pricing, Medicare will spend about $1.7 trillion in 2020 – or about $33 billion per week.

Our final variable is the balance in the Medicare Trust Fund. In April of this year, the Board of Trustees of the Medicare Trust Funds released their annual report indicating that the balance in the Medicare Trust Funds at the end of 2018 was about $305 billion.

Table II.B1 from Annual Board of Trustees report
BOARD OF TRUSTEES OF THE FEDERAL HOSPITAL INSURANCE
AND FEDERAL SUPPLEMENTAL MEDICAL INSURANCE TRUST FUND

Keeping in mind that Medicare is reasonably funded for the 2020 forecast ($857 billion), let’s also say that doubling Medicare pricing only draws down from the Trust Funds by 50% per year (or roughly $16 billion per week instead of the full $33 billion per week). At an increased spending rate of $16 billion per week, the Medicare Trust Funds (about $305 billion) would be depleted in a little over nineteen weeks – or less than 5 months. If, in fact, we use the full $33 billion per week price increase, the Trust Funds would reach $0 in just over 9 weeks.

Granted, none of this is detailed financial forecasting (and I’m not an accountant) so I do have to emphasize that this is all back-of-the-envelope math, but it does expose at least some of the financial risk of moving Medicare to commercial pricing. Frankly, I don’t think this was the original intent, but by adding the phrase “… and the commercial insurance market” it’s really impossible to decipher just what the real intent was. At least until we see the detailed report Trump called for (April 2020), we’ll just have to hope the intent isn’t to bankrupt the Medicare Trust Funds.

______________________
NB: This post first appeared on Forbes in October of 2019 and has been lightly edited.

Filed Under: Trump Tagged With: Medicare, Trump, Trumpcare

50 Reasons Trump Is Indebted To Putin

April 1, 2019 By Dan Munro

On March 30th – Timothy Snyder (Levin Professor of History at Yale) started a 50 tweet thread – except that the thread wasn’t connected. It was just 50 separate tweets. In an effort to add clarity to the thread – and to make it easier to see all 50 tweets in the order he wrote them, I’ve reassembled them here in one post.

I’ve linked to the first tweet, but not each subsequent tweet. Again, the purpose here was to help with readability on an important historical thread from an important historian. Each tweet is also accompanied by a page number (in parentheses) from his book … The Road to UnFreedom: Russia, Europe, America. As per his twitter profile (@TimothyDSnyder), his author’s website is here: timothysnyder.org


Why we do think that Mr. Trump owes a debt to Mr. Putin? Here are fifty reasons. All of the facts are a matter of public record, and all of the sources can be found in my book “The Road to Unfreedom.”

  1. In 1984, Russian gangsters began to launder money by buying and selling apartment units in Trump Tower (p. 220).
  2. In 1986, Mr. Trump was courted by Soviet diplomats, who suggested that a bright future awaited him in Moscow (p. 220).
  3. In 1987, the Soviet state paid for Mr. Trump to visit Moscow, putting him up in a suite that was certainly bugged (p. 220).
  4. In 2006, Russians and other citizens of the former Soviet Union financed Trump SoHo, granting Mr. Trump 18% of the profits — although he put up no money himself (p. 221).
  5. In 2008, the Russian oligarch Dmitry Rybolovlev in effect gave Mr. Trump $55 million in an unusual real estate deal. In 2016, Mr. Rybolovlev appeared in places where Mr. Trump campaigned (p. 221).
  6. In 2008, Donald Trump Jr. explained that the Trump Organization was dependent upon Russia. (p. 221).
  7. In 2010, the Russian propaganda server RT helped American white supremacists to spread the lie that Barack Obama was not born in the United States. In 2011, Mr. Trump became the most prominent backer of this lie. (p. 223).
  8. Mr. Trump was endorsed by the Russian political technologist Konstantin Rykov in 2012 (p. 102).
  9. In April 2013, the FBI busted two gambling rings inside Trump Tower, which according to authorities were run by a Russian citizen. The US attorney who ordered the raid was later fired by Mr. Trump (p. 103).
  10. Mr. Trump expressed the wish, on 18 June 2013, to be Mr. Putin’s “best friend.” (p. 102).
  11. Mr. Trump was paid $20 million by Russians to spectate at a beauty pageant in summer 2013. The man who did the work, Aras Agalarov, would later help to arrange a meeting between the Trump campaign and Russians. (p. 102).
  12. In summer 2014, a Russian advance team was sent to the United States to plan the cyber war of 2016. (p. 194)
  13. In 2014 Mr. Putin’s advisor Sergey Glazyev anticipated the “termination” of the American elite. (p. 226)
  14. In 2014 a Russian think tank, the Izborsk Club, outlined the principles of a new information war to be fought against the United States. (p. 226)
  15. Steve Bannon met with Russian energy executives in 2014 and 2015, and tested messages about Putin on American voters. He would later run Mr. Trump’s campaign. (p. 194)
  16. In late 2014 Russia penetrated the email networks of the White House, the Department of State, and the Joint Chiefs of Staff. (p. 194)
  17. When Mr. Trump announced his candidacy in June 2015, Russia’s Internet Research Agency created and staffed a new American Department. (p. 227)
  18. In October 2015, while running for president, Mr. Trump signed a letter of intent to have Russians build a tower in Moscow and put his name on it. The Trump Organization planned to give its penthouse to Mr. Putin as a present. (p. 222)
  19. In October 2015, Mr. Trump tweeted that “Putin loves Donald Trump.” (p. 222)
  20. Felix Sater, who had brokered deals between the Trump Organization and Russian investors, wrote in November 2015 that “Our boy can become president of the United States and we can engineer it.” (p. 222)
  21. Mr. Trump was endorsed in late 2015 by the think tank of the pro-Kremlin oligarch Konstantin Malofeev. (p. 150)
  22. In early 2016, the chair of the foreign relations committee of the Russian parliament said that Mr. Trump could “drive the Western locomotive right off the rails.” (p. 218)
  23. In February 2016, Mr. Putin’s cyber advisor boasted: “We are on the verge of having something in the information arena that will allow us to talk to the Americans as equals.” (p. 227)
  24. Russian military intelligence penetrated the Democratic National Committee in March 2016 as well as personal accounts of leading Democrats. Stolen emails were then used to discredit Hillary Clinton and aid Mr. Trump. (p. 232)
  25. George Papadopoulos, a foreign policy advisor of the Trump campaign, is told by Russians in April 2016 that “dirt” on Hillary Clinton is available. He then met with Mr. Trump. He was later convicted of lying to the FBI. (p. 240)
  26. A Russian military intelligence officer bragged in May 2016 that his organization would take revenge on Hillary Clinton on behalf of Mr. Putin. (p. 227)
  27. Carter Page, an advisor of the Trump campaign, traveled to Moscow in July 2016. He then worked with success to make the Republican platform friendlier to Russia at the Republican National Convention. (p. 214)
  28. General Michael Flynn, an advisor of the Trump campaign and then Mr. Trump’s national security advisor, called himself “General Misha” and followed and retweeted Russian material from five Russian accounts. He later confessed to a federal crime. (p. 241)
  29. Mr. Trump requested, on 17 June 2016, that Russia search for Hillary Clinton’s emails. That same day Russian military intelligence began a phishing campaign to do just that. (p. 232)
  30. Some 22,000 emails stolen by Russia were released right before the Democratic National Convention, on 22 July 2016. (p. 232)
  31. Thanks to Russia’s Internet Research Agency, 126 million Americans saw Russian propaganda designed to aid Mr. Trump in 2016. Almost none of them were aware that this was happening. (p. 230)
  32. Over the course of 2016 some fifty thousand Russian bots and some four thousand human accounts exploited Twitter to influence American public opinion on behalf of Mr. Trump. Almost no Americans were aware of this. (p. 230)
  33. In 2016, Russia sought to break into the electoral websites of at least thirty-nine American states. (p. 231)
  34. Throughout 2016, Russian elites referred to Mr. Trump as “our president.” (p. 218)
  35. Throughout 2016, Russian journalists were instructed to portray Mr. Trump positively and Hillary Clinton negatively. (p. 218)
  36. In June 2016 the leaders of the Trump campaign, Jared Kushner, Donald Trump, Jr., and Paul Manafort met with Russians in Trump Tower as part of, as the broker of the meeting called it, “the Russian government’s support for Trump.” (p. 261)
  37. Mr. Trump’s campaign manager Paul Manafort resigned in August 2016 after news broke that he had received $12.7 million in cash from a pro-Russian Ukrainian politician. Mr. Manafort was later convicted of crimes. (p. 236)
  38. When Mr. Trump seemed to be in trouble when a tape of his advocacy of sexual assault was published on 7 October 2016, emails stolen by Russia were released to change the subject. (p. 233)
  39. Mr. Trump personally encouraged his followers to explore the emails that Russia had stolen in tweets of 31 October and 4 November 2016. (p. 232)
  40. In the months between Mr. Trump’s nomination as the Republican candidate and the election, anonymous limited liability (”offshore”) companies furiously purchased his properties. (p. 222)
  41. After Mr. Trump was accorded the victory in the presidential election in November 2016, he was given a standing ovation in the Russian parliament. (p. 218)
  42. After Trump was accorded the victory in the presidential election, he called Mr. Putin to be congratulated. (p. 218)
  43. In December 2016, before the inauguration, Michael Flynn illegally met with Russian officials to discuss Russia-friendly policy. One of his aides explained: “Russia has just thrown the U.S.A. elections to” Mr. Trump. (p. 242)
  44. After Mr. Trump’s victory, the leading man of the Russian media, Dmitry Kiselev, celebrated the end of human rights and democracy as US policy. (p. 218)
  45. In May 2017, Mr. Trump fired James Comey for taking part in an investigation of Russia’s cyberwar against the United States, and then bragged about doing so to Russian officials in the Oval Office. (p. 245)
  46. In June 2017, Mr. Putin essentially admitted that Russia had intervened in the election, saying that he had never denied that “Russian volunteers” had carried out a cyberwar on behalf of Mr. Trump.
  47. In June 2017, Mr. Trump ordered the firing of Robert Mueller, who had been tasked to carry out an investigation of Russian interference. The White House Counsel refused to carry out the order.  Russia then began a campaign to slander Mr. Mueller. (p.246)
  48. In September 2017, a Russian parliamentarian said on national television that the American security services “slept through” as Russia chose the US president. (p.225)
  49. 2017-2018 Mr. Mueller’s investigation led to the indictment of Russia’s Internet Research Agency, several Russian military intelligence officers, and multiple associates and campaign officials of Mr. Trump. It also produced a report that we have not yet been allowed to read
  50. In June 2018, Mr. Putin confirmed before the international press that he had wanted Mr. Trump to win. At that same summit, in Helsinki, Mr. Trump said that he trusted Mr. Putin more than his own advisors. (p.227)

Filed Under: Trump

Trump and the Dunning-Kruger Effect

May 29, 2017 By Dan Munro

President Trump forcing his way past the Prime Minister of Montenegro

By most accounts, President Trump survived his first foreign trip without a major gaffe, but that’s not to say all of his behavior was presidential — and in many ways, it was a “complete disaster” politically.

While the events of Trump’s trip didn’t produce any major fireworks (as some were expecting), they did add considerably to his long and growing list of abnormal, jaw-dropping behavior.

In fact, what’s emerging is a pattern of reckless, juvenile and boorish behavior that demands both assessment and accountability — even for Trump loyalists. The pattern was clearly evident during the campaign, of course, but as POTUS, it’s quickly deteriorating into a global embarrassment with dire, short term consequences.

I’m not a psychiatrist or psychologist, but the best description I’ve seen of his behavior is the cognitive impairment known as the Dunning-Kruger effect.  The definition from Wikipedia certainly seems (even for a layperson) to be a classic, text-book fit.

Dunning-Kruger: In the field of psychology, the Dunning–Kruger effect is a cognitive bias, wherein persons of low ability suffer from illusory superiority when they mistakenly assess their cognitive ability as greater than it is. The cognitive bias of illusory superiority derives from the metacognitive inability of low-ability persons to recognize their own ineptitude; without such self-awareness, they cannot objectively evaluate their actual competence or incompetence.

Basically, it’s the inability to accurately assess one’s own competence (or lack thereof). At 70, Trump may be physically fit to withstand the rigors of the office, but is he capable of judging his own competence? The evidence that he lacks this basic judgment is growing and compelling.

  • “I’m like, wait a minute. I made a speech. I looked out, the field was, it looked like a million, million and a half people.” President Trump (Jan 21)
  • “Trust me. I’m, like, a smart person.” President Trump at CIA Headquarters (Jan 27)
  • “We’re now having dessert — and we had the most beautiful piece of chocolate cake that you’ve ever seen — and President Xi was enjoying it.” President Trump (Apr 12)
  • “My generals are the most respected that we’ve had in many decades I believe. And they lost Ryan.” President Trump (Feb 27)
  • “Nobody knew healthcare could be so complicated.” President Trump (Feb 27)
  • “The plan gets better and better and better, and it’s gotten really, really good. And a lot of people are liking it a lot.” President Trump (on healthcare — Apr 20)
  • “And I don’t watch things that I know are going to be unpleasant.” President Trump (Apr 23)
  • “We have to prime the pump. Have you heard that expression used before? Because I haven’t heard it. I mean, I just … I came up with it a couple of days ago and I thought it was good.” President Trump (May 4)
  • Pushing his way to the front row for a group photo
  • Asking French President Macron for his cell phone number (May 27)
  • His inappropriate and aggressive “tug n’ shake” death grip

It starts off like a normal, unassuming handshake, until the shakee is pulled suddenly toward the president, resulting in a very unprofessional body-lurch. Trump follows this embarrassment up by reassuring the shakee with an even more awkward top-of-the-hand pat.

This partial list is all within the first 4 months of his presidency and reflects, I believe, a painful and visible ignorance of his own incompetence. This isn’t just bizarre or juvenile behavior for a president (any president), it’s strange behavior for any politician — and there will be consequences.

Here’s the deal: once you elect a clown like Trump, you lose trust not just now but for many years to come. A nation that elects a Trump once could easily elect a similar figure again in the future. That becomes priced into national reputation. For the Germans, South Koreans, Japanese etc. this is no joke: they’ve staked their lives on having stable USA foreign policy. Jeet Heer, Senior Editor at the New Republic

The loss of that national reputation among strong allies happens all too quickly.

The president’s failure to endorse Article 5 in a speech at NATO headquarters, his continued lambasting of Germany and other allies on trade, his apparent decision to walk away from the Paris climate agreement — all suggest that the United States is less interested in leading globally than has been the case for the last 70 years. Ivo H. Daalder, Former US Ambassador to NATO

The times in which we can fully count on others are somewhat over, as I have experienced in the past few days. German Chancellor Angela Merkel

No freely elected head of government in our country should allow him — or herself to be humiliated in this way — the way this man [Trump], like an autocratic leader, believed he could inflict humiliation in Brussels. Election campaign or no election campaign, in this situation let me be entirely clear — the [German] chancellor represents all of us at summits like these — and I reject with outrage the way this man takes it upon himself to treat the head of our country’s government. That is unacceptable. Martin Schulz (chief political rival to Angela Merkel)

Given his age and his personal history (multiple failed marriages and businesses), we should not expect a significant change in President Trump’s behavior. The Dunning-Kruger effect clearly isn’t grounds for removal under Article 25 of the Constitution, and there may be better attempts by those around him to control and minimize the public view, but as long as Trump is President, we should brace for more of this total incompetence — and the consequences that result.


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Dan Munro is an author and Forbes Contributor who lives outside of Phoenix, Arizona. He has written for a variety of national publications at the intersection of healthcare policy and technology.

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