In his health care speech at the Hoover Institution, Paul Ryan not only laid out his plans “to confront health care inflation head-on” but also discussed President Obama’s approach to dealing with rising health costs, which mostly amounts to price controls imposed by an ominous, unelected, quasi-legislative board. Here’s what Ryan had to say about Obama’s approach:
“Just last week, the president rolled out a deficit reduction plan that doubled down on his bureaucratic approach to controlling Medicare costs, first advanced in his health care law last year.
“The law empowers a board of 15 unelected officials — the Independent Payment Advisory Board, or IPAB — to hold the growth of Medicare spending to GDP plus 1 percent by reducing reimbursements to health-care providers. Unless overturned by a supermajority in Congress, the recommended cuts dictated by this board become law.
“The president’s latest proposal…called for letting IPAB cut deeper. This board of bureaucrats will now be tasked with holding Medicare’s growth rate to GDP plus half a percent. To put that in context, Medicare is currently growing at 6.3 percent per year.
“Medicare’s non-partisan chief actuary, Richard Foster, has been clear on this point: Going from 6 percent growth down to the President’s targets, using only the blunt tools that his law gives to IPAB, would simply drive Medicare providers out of business, resulting in harsh disruptions and denied care for seniors.”
Ryan added, “You cannot control costs by using price controls, which impose painful cuts within a fundamentally broken framework. Instead, you have to revisit the structure of federal health policy and change the incentives — something that many leading Democrats, with their unwavering commitment to early 20th Century social insurance models, remain totally unwilling to do.”
Ryan suggested, “Instead of top-down price controls imposed by 15 bureaucrats at IPAB, let’s try bottom-up competition” driven by 300,000,000 Americans.