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Obamacare Is an Entitlement Disaster

1:09 PM, May 25, 2011 • By JEFFREY H. ANDERSON
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Without major changes in health care delivery systems, the prices paid by Medicare for health services are very likely to fall increasingly short of the costs of providing these services. By the end of the long-range projection period, Medicare prices for hospital, skilled nursing facility, home health, hospice, ambulatory surgical center, diagnostic laboratory, and many other services would be less than half of their level under the prior [pre-Obamacare] law. Medicare prices would be considerably below the current relative level of Medicaid prices, which have already led to access problems for Medicaid enrollees, and far below the levels paid by private health insurance.

In other words, Obamacare would result in a level of care for Medicare beneficiaries that would become increasingly similar to the level of care currently provided to those on Medicaid. Obamacare would reduce payments to Medicare providers to levels that would cause many providers to quit seeing Medicare patients. The money saved by not paying Medicare providers anything like the going rate for medical care would be used to fund Obamacare, even while the Obama administration disingenuously maintains that each dollar raided from Medicare could be spent on both Medicare and Obamacare.

The Medicare chief actuary has previously warned that, under Obamacare, “providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the program (possibly jeopardizing access to care for beneficiaries). Simulations by the Office of the Actuary suggest that roughly 15 percent of Part A [Medicare’s hospital insurance program] providers would become unprofitable within the 10-year projection period as a result....”

If this weren’t enough, President Obama has since called for further Medicare cuts to be made by the largely unchecked and clearly unconstitutional Independent Payment Advisory Board (IPAB). In fact, IPAB-imposed Medicare cuts are a centerpiece of Obama’s new budgetary “framework.” The IPAB’s dictates would have the force of law and would not be able to be overruled even with a majority vote in both houses of Congress and the president’s signature, despite the fact that that’s the lawmaking process plainly outlined in the Constitution.

In sum, President Obama has offered no serious plan to curb entitlement spending, which is one reason why the CBO says that the national debt, which has risen from $9.9 trillion when Obama was elected to $14 trillion today, would rise to $28 trillion by the end of his decade long budget. Meanwhile, his signature legislation would expand Medicaid enrollment by 35 percent in 2014, would launch a massive new entitlement program in that same year, and would raid Medicare to pay the tab — thereby lowering Medicare’s quality of care while putting the program on even worse financial footing. As much as the Democrats would prefer to change the subject, Obamacare is an entitlement disaster.  

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