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Obamacare vs. Medicare

Mar 10, 2014, Vol. 19, No. 25 • By JEFFREY H. ANDERSON
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Now, two years later, the “demonstration project” is over, and Medicare Advantage is back on the chopping block. The CBO says that if Obama’s centerpiece legislation is implemented as written, about $200 billion will be funneled out of Medicare Advantage and into Obamacare over the next decade. Like low-premium health plans and their accompanying health savings accounts, both of which Obamacare aims to diminish or eliminate, Medicare Advantage has proven extremely popular: Its enrollment more than doubled, according to the New York Times, in just the past eight years. With over 15 million seniors now in the program—more than a quarter of all Medicare beneficiaries—Obama-care’s $200 billion raid amounts to about $13,000 per current Medicare Advantage enrollee.

But Medicare Advantage is hardly the only part of Medicare that is scheduled to be looted by Obamacare. The CBO projects that, over the next decade, about $1 trillion that would otherwise have been spent on Medicare will be rerouted to Obamacare. That represents more than 10 percent of Medicare’s entire projected funding—which helps explain why Medicare’s Office of the Actuary has projected that, by 2020, Medicare will reimburse doctors and other health care providers at lower rates than Medicaid will. Imagine if Obama had pitched Obamacare by saying, Folks, we’re going to pass health reform, and to pay for it, we’re going to divert more than 10 percent of the money that’s projected to be spent on Medicare. That pitch would have made Jimmy Carter’s “malaise” speech look like a triumph of political rhetoric. But, as the CBO notes, that’s exactly what Obamacare will do.

To be sure, Medicare badly needs to be reformed, and less should be spent on it. But at a time when we are $17 trillion in debt and our Army is shrinking to pre-World War II levels, money shouldn’t be reallocated from Medicare to finance a highly unpopular, $2 trillion overhaul of American medicine.

Similarly, Medicare Advantage needs to be protected, and Obamacare shouldn’t pilfer from it. But it would be far more objectionable for Obama once again to refuse to faithfully execute the law as written in hopes of extricating himself—and his vulnerable Senate allies—from a political thicket of their own creation. Conservatives should be a lot more concerned about abridgements of the rule of law and the separation of powers than about cuts to this or that program—even popular and worthwhile ones.

All of this—the Medicare Advantage cuts, the siphoning of more than 10 percent of all projected Medicare spending, the lawlessness—points to the need to repeal the monstrosity that is Obamacare. And it points to the need to advance a well-conceived conservative alternative to pave the way to full repeal. The 2017 Project has proposed one such alternative. It would free Americans from Obamacare’s unprecedented individual mandate, its skyrocketing health costs, its weakening of job prospects, its fiscal irresponsibility, its consolidation of power and money at the expense of Americans’ liberty, and all the rest of its 2,700 pages of federal largess. At the same time, it wouldn’t touch the employer-based tax break for health insurance for most Americans or fail to provide help to the poor and near-poor who get the vast majority of aid under Obamacare, thereby foreclosing a potentially huge political opening for Obamacare supporters. What it would do is fix what the government had already broken before Obamacare was passed. It would provide real reform by eliminating the unfairness in the tax code by offering a non-income-based tax credit to all Americans who purchase health insurance in the individual market, dealing with the problem of preexisting conditions through commonsense regulations and high-risk pools, and lowering health costs by facilitating a real, vibrant market and encouraging as little involvement by middlemen (whether the government or insurers) as possible. It’s the opposite of Obamacare’s failed approach.

There are other worthwhile conservative alternatives on the table—including a proposal by Senators Tom Coburn, Richard Burr, and Orrin Hatch, and one from the House’s Republican Study Committee—and there is still much discussion to be had about shaping an alternative to bring about desired results. But it should be less doubtful than ever that full repeal is both crucial and achievable, and that advancing a well-conceived conservative alternative is the key to that quest.

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