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Sorry, ThinkProgress: Paul Ryan is Right to Say 'Obamacare Ends Medicare As We Know It'

3:00 PM, Jun 1, 2011 • By MARK HEMINGWAY
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The folks over at the Center for American Progress are up in arms over this statement by Rep. Paul Ryan, D-Wis.:

RYAN: Millions of dollars of negative ads are being run to try and scare seniors and trying to confuse seniors. You know, the irony of this Bill, is with all this Mediscare that the Democrats are running, it’s Obamacare itself that ends Medicare as we know it. Obamacare takes half a trillion dollars from Medicare — not to make it more solvent but to spend on this other government program, Obamacare. And then it creates this 15 panel board of unelected, unaccountable, bureaucrats starting next year to price control and ration Medicare for current seniors.

Setting aside ThinkProgress' red herrings about what medical reforms Ryan may or may not have supported in the past, this is their response:

It does no such thing. The ACA reduced annual increases in payments to hospitals, skilled nursing facilities, home health agencies, and other institutions to spur productivity and cut overpayments to private insurers that are not delivering value for Medicare dollars. It used that money to expand coverage to 32 million Americans — many of whom were receiving uncompensated care at these institutions — to extend the life of the Medicare program and invest in new demonstration projects that aim to encourage providers to deliver quality care more efficiently. Seniors’ guaranteed benefits are in no way affected.

The “15 panel board,” as Ryan calls it, is actually the Independent Payment Advisory Board (IPAB). It will include individuals from across the health care field, all of whom will have to be confirmed by the Senate. Significantly, their proposal to reduce spending cannot “include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums…increase Medicare beneficiary cost- sharing (including deductibles, coinsurance, and co- payments), or otherwise restrict benefits or modify eligibility criteria” (Section 3403 (page 409) of the Affordable Care Act stipulates.)

First, it's notable that ThinkProgress sidesteps the question of Obamacare's significant Medicare cuts, arguing that it increased spending on the margins. Second, their description of Obamacare's Independent Payment Advisory Board is just beyond rosy. For one thing, they don't really go into detail about how the board will work -- and for good reason. They know it will scare voters.

Essentially, members of IPAB -- appointed by the president -- will set Medicare's budget for the year by making the program hit certain predetermined spending targets. ThinkProgress is right that the law nominally says that IPAB is forbidden from rationing, but if IPAB can't raise revenues, cut premiums or adjust cost sharing mechanisms in Medicare, how is it supposed to cut Medicare's budget?

Just about the only think IPAB can do here is slash Medicare reimbursement rates to doctors. Now Medicare reimbursement rates are already below market rates and we're already seeing a huge uptick in doctors refusing to treat Medicare patients for this very reason. Last year, USA Today reported that the number of doctors refusing Medicare patients hit an all-time high and it's getting worse:

The American Medical Association says 17% of more than 9,000 doctors surveyed restrict the number of Medicare patients in their practice. Among primary care physicians, the rate is 31%.

The federal health insurance program for seniors paid doctors on average 78% of what private insurers paid in 2008.

"Physicians are saying, 'I can't afford to keep losing money,' " says Lori Heim, president of the family doctors' group.

Low reimbursement rates are already a huge problem in Medicaid -- over half of all specialists in many major metropolitan areas are refusing to take on new Medicaid patients, according to a 2009 survey by Merritt Hawkins and Associates on physician wait times.

Even if IPAB can't ration directly -- and that's a big "if" considering the President spoke of further "strengthening" IPAB in April -- the result is almost worse than rationing, many Medicare patients will have a hard time getting medical care, period.

So then, if you object to IPAB's decisions to lower costs what can you do about it? Well, IPAB's recommendations automatically become law. There's no administrative or legal process for challenging the board's decisions -- and Congress can only override IPAB with a two-thirds majority vote. That's an awfully high legislative hurdle to clear.

Paul Ryan's plan involves bringing "premium supports" and leveraging private insurance markets, which make it similar to to the very popular Medicare Advantage and Medicare Part D programs. In theory, what he's proposing shouldn't be all that unfamiliar to current Medicare recipients.

Obamacare is bureaucrats setting dubious price controls that are very likely to limit access to medical care. (Say it with me, Obamacare fans: Having insurance coverage does not mean that a doctor will treat you.) Further, there's absolutely no recourse for doctors or private citizens to challenge these bureaucratic decisions. Even Congress' hands are largely tied. In fact, taking 13 percent of the federal budget away from Congress and giving that responsibility to executive branch bureaucrats may well be unconstitutional.

So you tell me which plan is more like Medicare as we know it? Ryan is absolutely correct to say "Obamacare itself that ends Medicare as we know it."

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