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  • Bye-Bye, Medicare! (As You Know It)

    The hot Washington Medicare debate centers on whether congressional Republicans will, in the language of the left, “End Medicare As We Know It.” But the dirty little secret on Capitol Hill is that Obamacare already ended the program as we know it.

    They don’t tell you that in those clever “Mediscare” ads.

    Here’s what Obamacare has already done:

    • Replaced Medicare’s traditional financing. Obamacare replaces Medicare’s fee-for-service structure—the very heart of traditional Medicare financing—with capitated payments and salaried physicians. Whether this is a good or bad idea, it’s not your grandpa’s Medicare.
    • Capped future Medicare spending. While slashing roughly a half-trillion dollars in Medicare provider payments over the next 10 years, congressional liberals imposed a hard cap on future Medicare spending. Once again, good or bad idea, it’s the law right now: No open-ended Medicare entitlement.
    • Put an unelected board in charge. Then congressional liberals went even further: They created the Independent Payment Advisory Board (IPAB), a group of 15 unelected bureaucrats, to cut payments to Medicare providers. In fact, unless Congress enacts an alternative plan to cut Medicare spending by the pre-ordained amount, the Secretary of Health and Human Services is authorized to enforce the board’s recommended cuts without congressional approval.

    Republicans and Democrats alike want to behead the IPAB piece of the Obamacare Hydra. (Check out Greek mythology on that Hydra thing.) There’s a reason you don’t see the Congressmen who voted for the IPAB out there on the hustings beating their chests and shouting themselves hoarse in a full-throated defense of their handiwork.

    But this week, some high-powered policy wonks came to IPAB’s rescue. A group of health policy experts and economists penned a letter to congressional leaders to express their support for IPAB as a solution to Medicare’s looming insolvency, which the Medicare Trustees’ gloomy annual report highlighted last week. (That was followed by an even gloomier assessment from the Medicare Actuary.)

    The problem is that IPAB cannot achieve its goals any more than the goofy Medicare payment formula is going to guarantee a 30 percent cut in doctors’ pay next year.

    Except for a bloody toolbox of axes, cleavers, knives, and scalpels, IPAB doesn’t have any tools that would change the conditions of supply and demand for medicine. And when the bureaucratic slicing and dicing starts, ordinary Americans are going to find the board a pretty objectionable citadel of contemporary liberalism.

    Politico’s Sarah Kliff writes that “health industry groups are concerned the board will have to reduce spending by slashing payment rates—mainly to certain providers and the Medicare prescription drug program.” No kidding.

    To repeat, current law stipulates that IPAB cannot reduce the cost of Medicare by rationing care, raising taxes or premiums, or reducing benefits or eligibility. (It’s important to note that the law also assumes if the government cuts payments for medical services, this is not considered “rationing.”) As Heritage expert Robert Moffit explains, the law leaves little room for anything but provider payment cuts, a method that has been tried and failed time and again. Moffit writes:

    Physicians’ services under Medicare Part B could be subject to more payment reductions, even though Medicare physicians are already struggling under a flawed and volatile payment update system that routinely threatens them with draconian reductions. Hospital payments under Medicare Part A are exempt, even though they are the largest single category of Medicare spending. Though hospital payment updates would be reduced under other provisions of PPACA, their exclusion from the board’s range of action over the next 10 years is still a serious limitation on the board’s ability to control Medicare spending. Medicare providers that are exempt from the range of the board’s recommendations accounted for 37 percent of all Medicare benefit payments in 2009.

    Dr. Alice Rivlin, former director of the Congressional Budget Office, signed the letter supporting IPAB. She said, “There are a lot of unreasonable fears about the IPAB. It’s been associated with death panels and stuff like that…I view it as a much more benign device to improve the efficiency of delivery systems in a lot of different ways.” But the problem for Rivlin and others is simply this: The Board does not have a lot of different ways to do what it is supposed to do. If all you have is a hammer (provider payment cuts), as the saying goes, everything starts to look like a nail. President Obama now wants the hammer to be even bigger. Seniors’ benefits and medical treatments are going to look like a large bunch of nails.

    This is not the kind of Medicare “reform” most Americans had in mind.

    There’s a better way to achieve higher value for the dollars spent on Medicare. The key issue is who is going to make health care judgment calls. In Heritage’s “Saving the American Dream Proposal,” rather than empower IPAB, we leave the crucial judgment calls to doctors and patients—where they belong. To learn more, visit www.savingthedream.org.

    Co-authored by Kate Nix

    Posted in Obamacare [slideshow_deploy]

    24 Responses to Bye-Bye, Medicare! (As You Know It)

    1. Bobbie says:

      televise the accusations of life threats of the left regarding Ryan's budget plan in reference to the fact he's doing what's necessary while there's NOTHING substantial from the derelict democrats who continue to hold back America. Show how obamacare will lead us to wasserman, pelosi and reid's threats! Facts! Explain the truth in contrast to their fear mongering and what caused these entitlements to be compromised. Irresponsible handling by the government. Unchecked fraud, corruption and abuse of authority!

      Obama reverts to his famous word "change" yet only comes up with options that have already been used and proven unfair, unworkable inefficient, irrational and dangerous. There should be no stipulations from government regarding our personal health.

      Obama and his administration covers all faults of their own, unfairly dumping weight in various forms on those we need to depend on. They are deliberately destroying this country and it has to stop. Don't make exception to their "stupid play." Hold them accountable! People deserve the truth, please don't let them keep it from us!

      They continue to build more unnecessary government which shows very poor leadership in a free country.

    2. Joan, New Mexico says:

      You are correct about the Hospital payment exemption which seriously calls into question the intent or stated goals of the APCA. If examinations are shifted to the hospital (example: Cardiac NM Stress testing) from the outpatient setting due to under-re-imbursement of non hospital based providers, costs will escalate beyound current expectations since hospitals are typically re-imbursed at 3-10 times outpatient rates. In the above example from $800.00(outpatient) to $3000.00+ in hospital. The largest expenditure in Medicare is for "clerical-administrative" services. Therefore, if the physicians/providers (who account for 11-15% of total expense) are paid ZERO, growth of expenditures will continue to escalate out of control.

    3. kp, New Jersey says:

      Here's a quick clue: if you are referring to the Patient Protection and Affordable Care Act (PPACA) as "Obamacare", you are already revealing your bias. If you have a dispute with Patient Protection and Affordable Care Act (PPACA) then you will address it directly.

    4. Pingback: Bye-Bye, Medicare! (As You Know It). “Obamacare already ended the program as we know it.” «

    5. Joan, New Mexico says:

      Unfortunately, over the past two decades of declining re-imbursements for non hospital providers (wage and price controls) the unintended consequences of increased costs to Medicare due to self referral and or unnecessary procedures and testing on the part of physicians who own positions in facilities, hospitals , equipment etc has increased. Self referral is an internal problem of the medical class in regulating itself. It is also a problem which medical societies and the political class refuse to recognize.

    6. Floyd, Sacramento says:


      There is one dirty little secret you omitted. Obama wants a full-fledged socialized program in which everyone (not just grandma) but everyone except the elite (Congressional leaders, the President, union leaders, and big donors) get thrown under the bus. What Obama and his czars (IPAB) are doing is pre-empting all choice and setting up a fascist regime much like Mussolini. Once in place, then the hammer of Thor comes down.

    7. LenoreMO says:

      I was told when I turned 67 that I HAD to take Medicare – "it's the law"!! So, for over 10 years now, Medicare has taken $230 out of my SS check each month. I took part "A" because I had BlueCrossBlueShield, and it was always fine with me. I did not have Dental or Chiopratic – which I've paid for myself all my life. Part "A" is only good IF I go into the hospital. Now, since I had to take Medicare, I now have a co-pay on all my BC/BS visits!! I've never been in the hospital – and do try to have a yearly check-up each year. I feel like I've lost $2,300.00 + all the co-pays for these 10 years. Not a nice feeling!!!!!

    8. Jax Tico says:

      Hey seniors who are trying to protect this entitlement for future generations, "DON"T DO US ANY FAVORS!" Please don't shackle me and my children with the same slave chains you have been shackled with for all these years.

      The democrats whom you are defending may know better than you about what is best for you, but believe you me, they are not smarter than the rest of us. We know what is best for us and it certainly is not an all powerful central government bureaucrat controlling our medical care when we are old and weak and unable to make good informed decisions for ourselves.

      So thank you very much seniors of today, but stay out of our business! We, the Seniors of tomorrow, want to be responsible for ourselves. We don't want you or your politician friends to make life and death decisions for us and our loved ones.

    9. PMK, Prescott says:

      Medicare has certainly already changed. I cannot get into Mayo Clinic in Scottsdale because I am now on Medicare with a supplemental coverage. I have been going to Mayo's since I was 13 years old – and now cannot get in for a bowel obstruction even by offering to "pay the difference." Medicare is no longer even adequate care. We must find a different solution for those younger than 55 because there will be no services available for anyone if this continues.

    10. Pingback: The Democrat’s Big, Enormous, Gigantic Lie Strategy « American Elephants

    11. Paulc says:

      I thought the big item was Obamacare was to cut from Medicare $500 million by eliminating Medicare advantage plans (PPO/HMO's).

      This is a big time change. It affects millions.

      This makes the statement no change an obvious farce that seniors can readily understand.

      Its missing from this article and the Republicans are not even mentioning it.

      Has this Democrat $500 million cut been rescinded?

    12. Vincent Suppicich Br says:

      Most of what you state is false. Obama care will be great.

    13. Marshall Dillan, Ups says:

      Who's throwing granny over the cliff here? The reason why the Obama WH and the DEMS do not want further changes to Medicare is because they have already robbed the Medicare program of over $500 billion over the next 10 years and apply those savings to enrolling additional Medicaid recipients.

    14. Lloyd Scallan (New O says:

      The IPAB is exactly what Sera Palin said was comming, "Death Panels"! Of course the left want to get out in front of this by first denying the term. But make no mistake, this bunch of Obama appointed bureaucrats will make life and death decisions based on whatever they deem "justifiable actions" under the guise of cost savings. In actuality, it's conditioning us to accept less and less freedom and self governing in favor of being indoctrinated to accept more government control.

      Dr. Rivlin may be a M.D. by never forget she is first a bureaucrat. This is what she and her ilk believe in, more government intrusions in to our way of lives

      and more and more control, a little bit at a time, until they control every aspect

      of the way we once lived our American way of life.

    15. Tom Georgia says:

      About 60 to 65% of the costs that are being covered by medicare (and medicaid) are the costs of the various taxes and fees that are being paid to various governments using money from the healthcare delivery system income revenue stream. If we want more affordable healthcare we must first have smaller, better directed, better managed, more affordable governments at all levels of government.

      Kleptoparasitic governments must have a value producing host population from whom to pilfer to meet their needs. We, the people, are that value producing host population.

      The nation's primary political divide is between those who depend upon governments and those upon whom governments depend. But then upon whom do the freedom-fearing, statist, regressive politicians depend for votes on election day? H–m-m–m-m—

    16. allen says:

      We want the same CARE as every congressman and senator have. All we have to do is say we want the SAME HEALTH CARE as you get,Case Closed. If not everyone should be thrown-out of office when their term comes up. We have to many OLD FOLK that say dont TOUCH my Medicare and we are ones paying for this over priced crap. The Demo's have split the working class and want SOCILIST GOV. any eighth grader can see this. The Seniors are just all for me and you can go to HELL.

    17. Stirling, Pennsylvan says:

      All you have to do is associate IPAB with "Death Pannels" and that about says it all. The paradim shifts from doctor-paitient to a government-doctor only relationship centered on money cost and no patient concern. You are now the ultimate number without a name in this new system. "It can never happen in America." is a myth and people should wake up to the propaganda of "Hope and Change."

    18. john, arkansas says:

      instead of cutting medacare they should cut forergn aid by 50%, we give money we do not have to countrys that do not like us. we need to help our selfs first. we could sell 14billion in gold and pay our dept off. i know this would lower the valu of gold but it will recover with time.

    19. Kevin, Austin, TX says:

      As Rep. Paul Ryan so eloquently says, health care is a market where the patient "spends" only 17 cents of every dollar of care. The seller is well aware of this, and spends their "advertising" dollars lobbying to get favorable treatment from the agent who authorizes the other 83 cents. Some have identified the hospitals as the most successful sellers – I'll stipulate since I don't know any differently – so they can command both the highest price and the best chance at being reimbursed. There's nobody particularly evil in this equation, other than the govt bureaucrats and politicians who know the system is broken and continue to reinforce it because it gives them votes and/or permanent employment. Health care costs will NEVER go down in a system like this because nobody has any incentive to (a) seek a better price, or (b) offer a better price.

    20. Bobbie says:

      some people seem to find it necessary to blame seniors for what's to come to our children and grandchildren. As if the truly entitled (those that paid into the system) are being the ONLY entitled. NOT! There's so much fraud in the system. Don''t hold the seniors accountable for something in government's control when seniors have no control over it and are far from the only ones receiving the social security they personally earned and paid for! Government opportunists led it to break over the backs of those government authority doesn't favor…the truly entitled.

    21. Russell Snow Idaho says:

      I'm a physician (otolaryngology). Medicare now pays roughly 50% on the dollar. That is, about half of what 3rd party insurance companies pay for the same service. Medicaid pays the same as or less than Medicare. Overhead costs of a medical practice are roughly 50%.

      Do the math, as I and many other physicians do when we contemplate further reductions in Medicare reimbursement. There is a simple and foregone conclusion to the matter. In the event of further physician payment cuts I, and a great many other physicians, will stop seeing Medicare and Medicaid altogether. It is certain failure to care for patients at rates below the cost of overhead.

      And what of "profit". This the margin one takes home, to prepare for retirement and pay for the rest of life. Already there is minimal or no profit in Medicare and Medicaid.

      You do the math.

    22. Dee Va. says:

      If you believe Obama then you are traveling down the wrong road for Obama has no intention on doing anything for Our Country..If you will just remember the last time he was campaining and what he said he was going to do well it never happened for Obama was very busy traveling to other Countries to get them to stand up with him just like you The People That Voted For Obama…Obama has been Taking We The Peoples Country down and will continue as long as WE THE PEOPLE LET HIM…I for 1 am not giving up my Kids and Grandkids deserve better then him……………………

    23. Robert Inks says:

      If some one one Medicare is ill and his treatment is denied by the IBAP and then he commits a crime and goes to jail, will he then get the treatment? Just asking if prisioners are better treated then the retired workers who paid into thes ystem.

    24. Primary Care says:

      Obamacare has gone now. now its time for new medicare services.

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