Obama Doubles Down on Rationing

Published May 12, 2011

Seniors, beware. Buried in the President’s April deficit speech was a plan to give even more power to the Medicare rationing board created in his health-overhaul law.

President Obama proposes giving the unelected, unaccountable Independent Payment Advisory Board (IPAB) new authority to tighten the screws on payments. He clearly sees rationing as the tool to control costs by setting “a more ambitious target” for the IPAB ax.

According to a House Budget Committee estimate, the President’s IPAB goals would lead to benefit cuts of $9,600 for seniors over the coming decade. Medicare actuaries have said the payment cuts already built into Obamacare make it so that Medicare will eventually pay less than Medicaid does today, making it extremely difficult for patients to find doctors who will see them.

Are seniors prepared for this?

False Numbers vs. Hard Reality
The President disingenuously claimed that seniors would “have to pay nearly $6,400 more than you would today” under House Budget Chairman Paul Ryan’s (R-WI) plan to modernize the Medicare program.

The Ryan plan, when it begins in the year 2022, would provide an age-adjusted payment so that seniors can pick the best health plan to meet their needs. The older they are, the bigger the payment they would get. The average payment for insurance for all seniors is expected to be about $15,000 a year. But it will be less for seniors when they turn 65 because their health costs will be lower and the expected payment of $8,000 would cover most or all of their premiums.

The White House apparently did simple subtraction, coming up with a number that has no relation to reality, in an attempt to scare voters about supposedly having to pay $6,400 more out of pocket a decade hence.

This was politically motivated math that would be exposed if the White House had the decency to provide a plan rather than a speech. They shouldn’t get away with it, especially since the President’s own proposal is much more dangerous for current seniors. Not only does he do nothing to save the program from bankruptcy, but seniors in this decade will face nearly $10,000 in benefit cuts under IPAB’s rule.

Avoiding Hard Choices

The President is kicking hard choices down to road to his successors or to unelected bureaucrats. He proposed yet another commission—he walled off entitlement programs from genuine reform, even though it is clear that Medicare, Medicaid, and Social Security are the real drivers of the deficit. And he would give new powers to IPAB appointees, proposing they be directed to limit Medicare cost growth per beneficiary to GDP growth per capita plus 0.5 percent beginning in 2018, versus 1 percent under current Obamacare law.

He also targets prescription drugs for savings when they represent only a small fraction of overall Medicare spending. We have to wonder what happened to the deal that prescription-drug companies wouldn’t be demonized if they came to the table and supported Obamacare.

Rejecting Medicaid Reform

The President also refuses to give state governors real power to manage their Medicaid programs even as his new health-care law threatens to crush states with more than $115 billion in new required spending through mandated-coverage expansions. The only way to “make Medicaid more flexible, efficient, and accountable” is to give states the resources and incentives to manage spending better, through block grants that allow them to cut through mountains of federal red tape, as the Ryan plan would do.

Recently, Robert Pear of the New York Times wrote article in which he describes a conversation with a Louisiana Medicaid recipient, Nicole Dardeau. “My Medicaid card is useless for me right now,” Ms. Dardeau said. “It’s a useless piece of plastic. I can’t find an orthopedic surgeon or a pain management doctor who will accept Medicaid.”

And what does Obamacare do? It sends up to 25 million more people to this Medicaid ghetto as states are forced to dramatically expand their programs, making it even more difficult for the poorest and sickest recipients to get care in increasingly crowded hospital emergency rooms. Seniors should be listening, because under Obamacare, that is their fate, too. 

Grace-Marie Turner ([email protected]) is president of the Galen Institute. This column is adapted from an article on the institute’s website, galen.org. Used with permission.