Democrats Should Defuse the Debt-Limit Time Bomb: Orszag

Biden talks turkey
Nurphoto
By Yuval Rosenberg

It should be a quiet week on the fiscal front as Congress is out ahead of Thursday’s Thanksgiving holiday. At a brief, joke-filled White House ceremony Monday, President Joe Biden pardoned the annual Thanksgiving turkeys, named Chocolate and Chip, and took the opportunity to work in a few election-related cracks. "The only red wave this season is going to be if [my] German Shepard Commander knocks over the cranberry sauce on our table," he said. He also urged Americans to get their Covid and flu shots. "Two years ago, we couldn’t even have Thanksgiving with large family gatherings," he said. "Now we can. That’s progress, and let’s keep it going."

Overseas, the U.S. men’s soccer team played to a disappointing 1-1 draw against Wales in its opening match of the World Cup. Next up: England on Friday.

Audits Reveal Millions in Medicare Advantage Overcharges

Newly revealed federal audits show that some Medicare Advantage health plans have overcharged the government by millions of dollars.

The audits dating back to 2011 through 2013 were made available thanks to a multi-year Freedom of Information Act lawsuit by Kaiser Health News that was settled in September. Federal auditors reviewed the files of 18,090 patients and found overcharges of about $12 million, with some plans charging more than $1,000 too much per patient on average. Applying that rate to a broader range of Medicare Advantage plans suggests overcharges totaling roughly $650 million.

Officials at the Centers for Medicare & Medicaid Services say they plan to use the analysis to recover funds in the Medicare Advantage system, which is operated by large, private insurance companies. But the agency has failed to do so for nearly 10 years, and recently postponed the announcement of a final adjustment process for overcharges.

KHN’s Fred Schulte and Holly Hacker spoke to Ted Doolittle, a former CMS official who worked on fraud and billing abuse. "I think CMS fell down on the job on this," Doolittle said, adding that the agency may be "carrying water" for the insurance industry, which is "making money hand over fist" from Medicare Advantage.

"From the outside, it seems pretty smelly," Doolittle said.

One expert in expert in medical record documentation told KHN that overcharging, driven by insurance companies claiming that patients are sicker than they really are and thereby earning higher compensation for services, is "absolutely endemic" in the Medicare Advantage system. "I don’t think there is enough oversight," the expert said.

The bottom line: Medicare Advantage has been growing rapidly and now covers more than 28 million people at an annual cost of $427 billion. It will soon cover the majority of the Medicare population. But questions remain about the government’s ability to monitor the system while protecting taxpayers from abuse.

Democrats Should Defuse the Debt-Limit Time Bomb: Orszag

Peter Orszag, the former head of the White House Office of Management and Budget and the Congressional Budget Office, warns in a Washington Post op-ed that the perils of debt-limit brinkmanship are greater than ever before.

Republicans have indicated that they will use the need to raise the debt limit sometime next year as leverage to force Democrats to accept spending cuts. Orszag warns that the danger of this tactic is heightened "because political norms that governed past negotiations — in particular, the idea that avoiding default is paramount — might no longer hold."

In addition, he writes, the market for U.S. Treasurys has seen lower liquidity and greater volatility recently — and "what the Treasury market definitively does not need is heightened uncertainty over the debt ceiling. Jitters over lower liquidity in Treasurys make threats to the debt limit more dangerous than in the past."

Orszag urges lawmakers to defuse the threat during the current lame-duck session of Congress, either in bipartisan fashion or through a Democrat-led reconciliation bill that would need only 50 votes to pass the Senate. The first approach seems far-fetched since Republicans are unlikely to cooperate in the numbers needed. Democrats have rejected the second approach, with some expressing concern that it would be too time-consuming given the many other items they have to address. The Biden administration reportedly anticipated that some Democrats (read: Sen. Joe Manchin of West Virginia) might not cooperate with a party-line plan, either.

Orszag urges congressional Democrats to reconsider: "Any Democrats averse to taking such a painful vote now should consider how much leverage their party will lose once Republicans control the House — and how much higher the risk of default will be then. It’s generally not a good idea to enter a negotiation with a ticking time bomb and a counterparty willing to let it go off."

In a similar vein, Bloomberg columnist Jonathan Bernstein warns that Democrats are making a mistake by not addressing the debt limit before Republicans take control of the House. Republicans may get the blame, but Democrats won’t be able to avoid some blowback. "Whatever voters might claim they feel about who is responsible, if the economy tanks, Biden will take the blame," he writes.

Read Orszag’s full piece at The Washington Post and Bernstein’s at Bloomberg.

Send your feedback to yrosenberg@thefiscaltimes.com. And please encourage your friends to sign up here for their own copy of this newsletter.

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