Almost half of the original Obamacare budget called for a substantial cut to Medicare. (here) This was basically a bookkeeping maneuver that transferred money from one government program, Medicare, to another government program, Obamacare. Money would be taken from the seniors’ health insurance program to pay for health insurance for low-income people in the expanded Medicaid entitlement and for insurance subsidies for middle-income people buying plans in the exchanges.

Most of these cuts to Medicare in the Affordable Care Act budget would be decreases in hospital and doctor payments. The vast majority of these cuts have either not taken place or have been deferred.

Ironically, organized hospital groups such as the American Hospital Association, support Obamacare, yet they are now fighting other proposed cuts to Medicare. In its budget released this week, the Trump Administration has proposed an $800 billion cut to Medicare (here). The Committee for a Responsible Federal Budget analised the Administration’s 2019 budget proposal and found the reduction to Medicare would be closer to $500 billion, although 85 percent would be to hospitals and doctors. (here)

A recent analysis of the political left’s proposal for a Medicare buy-in estimates that 20 million Americans who now have private health insurance would take advantage of the buy-in. (here) This would decrease hospitals’ payments by an estimated $800 billion over 10 years since Medicare pays about 70 percent of what private insurance pays.

Understandably, from a financial standpoint, hospitals would rather treat patients with health insurance than provide charity care. However, hospital groups were extremely shortsighted and naïve to believe that government bureaucrats could manage entitlements in a financially sound manner. It’s easy and apparently popular for politicians to give people free things. And recipients will use as much of these “free” services and products as possible, driving costs to unsustainable levels.

Health care entitlements are financially exploding in the U.S. Hospital groups have only themselves to blame for supporting these entitlements and placing the financial stability of their individual hospitals in the hands of disinterested bureaucrats.