Lawmakers should leave Medicare and Medicaid alone, Sebelius says

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Health and Human Services Secretary Kathleen Sebelius
Health and Human Services Secretary Kathleen Sebelius

Medicare and Medicaid should not be significantly altered, because spending for these programs is trending downward and incentives tied to the programs are working, according to Health and Human Services Secretary Kathleen Sebelius.

Medicaid spending nationally was down 2% in 2012, and per-beneficiary Medicare spending grew only about 1 percentage point annually for the last three years, Sebelius told reporters at the White House Tuesday. Medicare growth is down significantly from the 2005-2009 period, which saw annual increases of five percentage points, she said.

“Medicare and Medicaid are not the drivers of the health care costs,” Sebelius said, according to the Washington Post's Ezra Klein. “Since the Affordable Care Act, they're growing much more slowly than private sector spending.”

Alan Krueger, chairman of the president's Council of Economic Advisers (CEA), also spoke. He and Sebelius said the slowed growth of Medicare and Medicaid is likely tied to provisions of the Affordable Care Act, such as penalties for avoidable readmissions and increased coordination between acute and post-acute providers. A CEA report released Tuesday supported this argument.

Because Medicare is the largest single payer in the country, Sebelius said, it has leverage in containing costs that would be lost if it is divided into a mixed public-private voucher system, as proposed in the budget from Rep. Paul Ryan (R-WI). Because cost containment is already being achieved, it is best to continue on the current course and pursue full implementation of the ACA, Sebelius said. She criticized recent Congressional action to repeal key aspects of the healthcare law's funding.

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