Independent Payment Advisory Board


The Debt Commission Endorses Obamacare

When the co-chairmen of President Obama’s debt commission released a draft series of recommendations today, they presumably intended to show momentum and create pressure for others to come around to some kind of an agreement.

Press stories are sure to focus on the Social Security changes and how they will antagonize some liberals, thus proving that the proposal is serious.

But the most important entitlement decision in the entire package is the explicit endorsement of Obamacare. The Bowles-Simpson proposal would leave in place the entire trillion-dollar monstrosity. Indeed, many of its supposed cost-cutting recommendations would build on Obamacare’s flawed structure of government-driven cost-cutting through price controls. In particular, they would like to create what amounts to a global budget on health care, with the Independent Payment Advisory Board (IPAB) given the unilateral authority to hit budget targets with price cutting. This is exactly the opposite of what’s needed, which is cost discipline through consumer choice in a functioning marketplace.

Meanwhile, Bowles and Simpson refused to endorse moving Medicare toward a defined contribution program, as Rep. Paul Ryan’s Roadmap proposes, relying instead on the usual laundry list of cuts to the existing program structure.

None of this is all that surprising, given how the commission was formulated. It’s not really a bipartisan commission at all; it’s an Obama commission. It was created by the president and stacked with Democratic appointees. Two-thirds of the 18 members were picked by the president or Democratic congressional leaders. Only six were appointed by Rep. John Boehner and Sen. Mitch McConnell.

The president says the public doesn’t want to “re-litigate” the health care war. He’s wrong. As last Tuesday’s exit polls make clear, a strong plurality wants exactly that. The American people know that the ill-advised law was railroaded through Congress and is a colossal mistake.

The fundamental problem here is that it is not possible build a bipartisan budget framework on a foundation that includes a partisan health-care plan with sweeping implications for future spending levels. To have a bipartisan budget requires a bipartisan health plan. And that means repealing Obamacare and starting over.

posted by James C. Capretta | 6:45 pm
Tags: debt commission, Roadmap, Paul Ryan, Independent Payment Advisory Board
File As: Health Care

Democratic Delusions

As Charles Krauthammer and David Brooks have already noted, this campaign season has been marked by an unusual degree of Democratic self-delusion. Everything is to be blamed for the current plight of the party except its elected leaders and the policies they have pursued while in office. Thus, the reason Democrats are headed for an electoral drubbing is that secret corporate money has distorted our democratic processes. Or if not that then because voters can no longer hear the truth through all the misleading clutter spouted by right-leaning media. Or perhaps because the electorate is just too dim to realize how important and positive the Democratic agenda has been for them and the country.

The self-delusion seems particularly acute when the conversation turns to health care. Democrats and their media apologists just can’t bring themselves to believe that there is anything substantive behind opposition to Obamacare. And so, instead of engaging in serious argument, they offer up condescending nonsense — such as this New York Times editorial which supposedly debunks the myths being peddled on the campaign trail by candidates trying to stir up opposition to Obamacare.

But the Times editorial doesn’t come close to debunking anything — because all it does is address distorted caricatures of arguments made by Obamacare’s opponents rather than the real ones that have convinced most Americans that Obamacare is a colossal mistake.

The Times piece begins by calling “pure nonsense” the suggestion by Senate candidate John Raese that Obamacare will force some patients to go through a bureaucrat or a panel to reach a doctor. And, of course, it’s true that the new law does not have an explicit provision which puts a bureaucrat in charge of physician access for all Americans.

But Obamacare does create the Independent Payment Advisory Board, or IPAB, which has the potential to become a very powerful hurdle to certain types of care. Under the new law, the fifteen-member IPAB has the authority to implement cost-cutting mechanisms in Medicare without further congressional approval. Indeed, IPAB’s proponents have been quite explicit in their hope that the panel will use government-funded “comparative effectiveness research” as the basis to terminate Medicare reimbursement for items and services deemed not “cost effective” by budget cutters. So, here we have an unelected board of so-called experts with the authority to unilaterally decide that certain treatments should not be funded by Medicare. Only the most blinded enthusiasts of governmental activism don’t see the potential problems with this approach, or understand the legitimate fears that it creates in the electorate.

The Times then suggests that Republican attacks on Obamacare’s $500 billion in Medicare cuts are cynical and misleading because the cuts will only come out of providers’ income or from Medicare Advantage enrollees who are unfairly profiting from excessive reimbursement rates. But Medicare’s chief actuary — who works for the president of the United States — has stated repeatedly that these cuts are so deep and arbitrary that they will force many hospitals and other institutions to stop seeing Medicare patients. In fact, the cuts in Obamacare would drive Medicare’s payment rates for services below those of Medicaid by 2019, and Medicaid’s network of willing suppliers of care and services is already very constrained. It’s quite clear that pushing Medicare’s rates to such low levels would drastically reduce access to care for many beneficiaries.

Moreover, the Medicare Advantage cuts will fall disproportionately on low-income and minority seniors who don’t have access to a retiree wraparound plan and can’t afford Medigap coverage. For them, the lower cost-sharing offered by Medicare Advantage plans is instrumental in helping them afford the care they need.

Of course, the Times editorial doesn’t even address the main reason voters are so upset that Obamacare was jammed through Congress. The public knows and understands that federal finances are on the brink of meltdown. The federal government is running trillion-dollar deficits as far as the eye can see, and there is no serious plan to get things under control. And, in fact, the signature initiative of the Obama administration was to pile another massive entitlement on top of the unaffordable ones already on the books, and partially pay for it with a $700 billion tax increase when unemployment is already running near 10 percent. The voters see all of this, and understand it perfectly well. What we have here is a Democratic president and a Democratic Congress that could not help themselves. They saw an opportunity to enact what liberals have been dreaming of for decades, and they decided it was more important to lock that in than to work with Republicans on reviving the economy.

And for that misplacement of priorities the voters will be holding them accountable next week.

posted by James C. Capretta | 6:13 pm
Tags: Medicare Advantage, chief actuary, Independent Payment Advisory Board, John Raese
File As: Health Care