It’s a simple fact: You can’t sustain Medicare unless you transform the current—and unaffordable—system. But the left continues to falsely decry conservatives’ plans to achieve this, accusing them of plotting to end the program altogether. It’s ironic, then, that the left has diligently pursued a strategy of its own to “end Medicare as we know it.” That strategy boils down to this:
Downplay the problem. Writing for the Los Angeles Times, Michael Hiltzik claims, “One of the basic flaws of Ryan’s plan is that he folds Medicare’s long-term fiscal problem into the near-term problem of the federal deficit.” According to Hiltzik, “Medicare’s ills are wholly separate” from the need for deficit reduction.
Recent deficits are largely attributable to the economic recession and its effect on federal revenues. But while economic recovery will restore revenues to roughly their historical average, deficits will continue to grow as a result of runaway spending on entitlement programs. Currently, Medicare’s Hospital Insurance (HI) Trust Fund is in deficit. The Medicare Trustees reported that the red ink amounted to $32 billion in 2010 and will reach $34 billion this year. Due to the combined effects of an aging population and rising health care costs, there is no end in sight for the program’s deficits. Getting the federal budget under control can’t be done without serious restraint on the growth of Medicare spending.
Some serious analysts have it exactly right. As The Washington Post’s Robert Samuelson explains, “It is only a slight exaggeration to say that unless we end Medicare ‘as we know it,’ America ‘as we know it’ will end. Spiraling health spending is the crux of our federal budget problem.”
Hope Obamacare will fix it. Supposedly, the new health law will reduce spending by achieving better value for each Medicare dollar spent. Says New York Times columnist Paul Krugman, “a number of reforms of that kind are, in fact, included in the Affordable Care Act…with these changes it should be entirely possible to maintain a system that provides all older Americans with guaranteed essential health care.”
Realistically, though, several main delivery system and payment reforms included in Obamacare have already been deemed fruitless. For example, accountable care organizations were expected to do the trick by encouraging better communication and coordination of care among providers. But demonstrations show the savings probably won’t materialize, and many medical professionals have already said they would not participate under the heavy-handed regulatory regime the Administration initially proposed.
Then there’s the Independent Payment Advisory Board (IPAB), a group of 15 unelected bureaucrats. They will devise ways to reduce costs if the growth in Medicare spending exceeds a target set by the new law. As of now, the board is restricted primarily to cutting provider reimbursements—which, experience shows, encourages either big volume increases (read: higher overall spending) or, depending on the services and market conditions, reductions in seniors’ access to care. Hiltzik touts the Congressional Budget Office’s estimate that IPAB could save $16 billion over a decade. That’s nothing to sneeze at, but barely a drop in the bucket compared to the Medicare Trustees’ projected $24.6 trillion in long-term unfunded promises.
And speaking of the Medicare Trustees, their recent stats simply reinforce the program’s grim financial outlook, not the least of which was that the HI Trust Fund will become insolvent by 2024. This dire assessment assumes current law will be carried out as written, which includes the changes made by Obamacare.
When all else fails, ration care. While the rhetoric of Obamacare revolves around references to “value-based care,” new payment systems, etc., the left’s only real “plan” is to give federal government officials greater control over the treatments and services seniors can have. In other words, to ration care from the top down.
Paul Krugman is pretty forthright: Medicare “has to start saying no to expensive procedures with little or no medical benefits.” But any change that allows a government board—rather than doctors and patients—to make these decisions based on “cost-effectiveness” information is rationing, plain and simple. President Obama started down this path by proposing, in response to the House Republicans’ 2012 budget proposal, to give the IPAB a bigger cleaver with which to cut the cost of the program.
Americans can choose one of two routes for Medicare. The status quo isn’t one of them. Either Congress embraces a plan to empower patients and use proven free-market principles to reduce spending, or they can “aggressively implement” Obamacare and give an unelected board the power to call the shots.