“President Obama’s plan for budget reform is to freeze these entitlement programs in their current arrangements and tinker at the margins — through, for instance, giving more power to Medicare’s Independent Payment Advisory Board or applying price controls to drugs sold through Medicare.
Along with higher taxes for high earners (families making $250,000 and up) and defense cuts, Obama’s deficit-reduction plan offers little innovation.
If Obama’s plan prevails, and these programs aren’t fundamentally reformed, poor and elderly Americans who depend on these programs will likely face much larger cuts in the future.”
“Mr. Obama wants to expand the power of the 15-member panel, which was created by the new health care law, to rein in Medicare costs.
But not only do Republicans and some Democrats oppose increasing the power of the board, they also want to eliminate it altogether. Opponents fear that the panel, known as the Independent Payment Advisory Board, would usurp Congressional spending power over one of the government’s most important and expensive social programs.”
“Messrs. Ryan and Obama agree that Medicare spending must decline, and significantly. The difference is that Mr. Ryan would let seniors decide which private Medicare-financed insurance policies to buy based on their own needs, while Mr. Obama wants Americans to accept the commands of 15 political appointees who will never stand for election.”
“The fact of the matter is that IPAB won’t make the notoriously inefficient Medicare program any more efficient. Through arbitrary reductions on payments to providers, it will simply reduce the supply of care. Even before the advent of a new, more powerful IPAB and a new, tougher limit on spending, Medicare’s chief actuary warned that ObamaCare will drive providers out of the program. If you love Medicaid, you’ll adore the new IPAB version of Medicare.”
“The House on Wednesday voted to terminate another piece of last year’s healthcare law — the Prevention and Public Health Fund, which is currently scheduled to receive nearly $18 billion over the next few years.”
“The Department of Health and Human Services has released draft rule that governs Accountable Care Organizations. ACOs are groupings of health care providers who join together under specific rules in order to create shared savings. The idea is to bundle a single payment for a patient so that providers do not have incentives to prescribe additional services that generate additional fees. This sounds like a relatively simple concept, and it is worth exploring different ideas for needed payment reform. But the truth is, changing payment systems is far from simple. The devil is in the details about the ‘specific rules’ that define an ACO’s structure.”
“The brutal arithmetic is that total federal health spending is about 10% of GDP today and on pace to hit 15% in 20 years. The liberal response is more central planning and eventually the political rationing of care, even as taxes continue to climb. The alternative that Mr. Ryan has offered, including an ObamaCare repeal and a conversion of Medicaid into block grants to states, would bring that share down to 6% as premium support began to limit Medicare’s open-ended spending.”
“Now, a recent hearing held by the House Energy and Commerce Subcommittee on Health has further revealed that the cost of ObamaCare will be higher than expected. Douglas Elmendorf, Director of the Congressional Budget Office, highlighted that CBO’s March 2011 updated analysis of the health care legislation shows its coverage provisions costing $1.1 trillion between 2012 and 2021. This is $90 billion more than the prior month’s estimates for the same time period.”
“Efforts to defund ObamaCare one bite at a time are making progress in the House, although Senate prospects remain dim. The House is addressing parts of ObamaCare which are so loosely-drafted that House Speaker John Boehner and others label them multi-billion-dollar ‘slush funds.'”
“At the heart of the spending problem, of course, is health care, and at the heart of the health-care cost problem is Medicare. The Obamacare ‘solution’ is heavy-handed regulation and government-imposed cost controls. That approach never works, and only erodes the quality of the system. What’s needed is a functioning marketplace, with government oversight and cost-conscious consumers directing the allocation of resources. And that’s exactly what the Ryan plan would deliver.”