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Obamacare at Center Stage

Aug 27, 2012, Vol. 17, No. 46 • By JEFFREY H. ANDERSON
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In the summer of 2009, President Obama and congressional Democrats faced a dilemma. In the midst of a severe economic downturn, and less than a year after the national debt had reached the 14-figure mark for the first time in American history, they wanted to launch a brand-new federal health care entitlement—and they needed a way (at least on paper) to pay for it. They were only willing to fund about half of it with tax hikes, so they needed to come up with a lot of additional money. Their chosen funding source is now coming back to haunt them.

Obamacare protestors


It is doing so as Democrats try to ride to victory by demagoguing Paul Ryan’s (and Mitt Romney’s) proposed Medicare reforms—which would help keep Medicare (and the nation) solvent by giving future seniors more freedom, more choice, and more opportunity to pursue value. But raising the Medicare issue also brings to light this inconvenient fact: Medicare is where the Democrats decided to get the rest of the money to fund Obamacare. 

There is of course no shortage of problems with Obama-care. Unless it is repealed, it will raise health costs and premiums, reduce the quality of care, and funnel unprecedented amounts of power and money to Washington at the expense of Americans’ liberty. It will, for the first time in American history, compel citizens to buy a product or service of the federal government’s choosing. It will make it illegal for Americans to choose most low-premium, high-deductible health plans, to choose plans that require -co-pays for contraception or sterilization, and to choose plans that don’t cover the abortion drug ella free of charge. It will cause millions of Americans to lose their employer-sponsored plans. It will be a medical and fiscal nightmare, and a disaster for our republic. But perhaps its biggest political vulnerability is one that a compliant press corps has so far largely kept under wraps: It is funded through a roughly even mix of tax increases and Medicare cuts. 

Romney and Ryan are already capitalizing on this. The campaign has released a new ad:

You paid into Medicare for years, every paycheck. Now, when you need it, Obama has cut $716 billion from Medicare. Why? To pay for Obamacare. So now the money you paid for your guaranteed health care is going to a massive new government program that’s not for you.


Such simple, straightforward, factual messaging can cut through the Obama smokescreen. And what a smokescreen it is. Obama and his allies disingenuously claim that this $716 billion (over Obamacare’s first nine years—more like $850 billion over its first decade) will be used to fund Obamacare while also, simultaneously, being put back into Medicare. But as most everyone outside the Beltway knows, you can’t spend the same dollar twice.

No, every dollar that Obamacare siphons out of Medicare will be spent just once—on Obamacare. It won’t go to making Medicare, or the country, more solvent—or to extending the life of Medicare. Instead, Obama’s raid of Medicare will go to fund Obama’s favorite legislation.

The Medicare chief actuary has made this plain. He has also made plain that Obama’s Medicare cuts will cause Medicare providers to be paid even less than Medicaid providers by the end of this decade. In other words, Obama’s cuts will affect current seniors, for whom it will be increasingly hard to find health care professionals willing to see them. The proposed Romney-Ryan reforms, in contrast, wouldn’t affect anyone who’s 55 or older, let alone current seniors.

What’s more, the Congressional Budget Office notes that Obamacare’s Medicare cuts will cause millions of seniors to lose their Medicare Advantage plans. Obama knows this, which is why he recently initiated the $8.35 billion Senior Swindle—an unscrupulous and probably illegal use of taxpayer money to try to hide the effects of these Medicare Advantage cuts from seniors until after November. As of yet, the mainstream press has shown little interest in covering this ploy, despite the Government Accountability Office’s published misgivings, but Romney and Ryan are free to highlight it.

They can also point out that no one really knows exactly how much Obamacare will cut from Medicare. Some cuts are left to the discretion of the Independent Payment Advisory Board, a creation of Obamacare. The IPAB will be made up of 15 unelected and largely unaccountable bureaucrats whom the law empowers to cut payments to Medicare providers. Under Obamacare, even Congress cannot overrule the IPAB’s decisions with a simple majority vote, thereby making the IPAB constitutionally dubious as well. 

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