Responses to the New York Times on Medicare
Yesterday the New York Times published an editorial that criticized several Republican positions with respect to Medicare and the health care law. It’s worth taking a few minutes to rebut each of those criticisms in turn.
Independent Payment Advisory Board (IPAB)
- The editorial criticizes recent Republican legislation to repeal the IPAB, which the Times calls “one of the central cost-control mechanisms of the new reform law.”
- Republicans have frequently supported, and initiated, attempts by Congress to slow the growth of Medicare spending. In 2005, Republicans voted to trim tens of billions of dollars from the Medicare program – but not a single Democrat in the House or the Senate supported this legislation.
- There are several key differences between the 2005 Deficit Reduction Act and the health care law. First, unlike the 2005 actions by Congress, the IPAB provisions in the health care law will result in bureaucrats making binding recommendations on health care savings that will have force of law absent additional action. Many Republicans (and some Democrats) view this as an irresponsible abdication of Congressional authority – and a worrisome precedent of empowering unelected and unaccountable bureaucrats to cut health care costs.
- Second, the “savings” from the IPAB’s recommendations will NOT improve the financial solvency of the federal government, or of Medicare – instead, those funds will all be dedicated towards paying for costly new entitlements. Both the Congressional Budget Office (CBO) and the Medicare actuary agree that the Medicare reductions in the law “cannot be simultaneously used to finance other federal outlays and to extend the [Medicare] trust fund” solvency date.
- Third, the CBO and the Medicare actuary both agree that the long-term savings promised by the IPAB and other similar provisions are highly unlikely to occur. In releasing their long-term budget outlook in June, CBO categorized most of the major savings provisions in the health care law – including the IPAB reductions – as “widely expected” to change, or “difficult to sustain for a long period.” Likewise, earlier this month the Medicare actuary actually encouraged individuals to ignore the estimates included in the annual trustees report, and view an alternative scenario instead, because the official estimates included unrealistic savings provisions from the health care law that are likely to be unsustainable.
- While Republicans SUPPORT controlling the growth of Medicare spending, many OPPOSE proposals that put bureaucrats between patients and doctors, and use Medicare savings to pay for costly new entitlements, all while assuming unrealistic budgetary projections that independent experts agree are highly unlikely to be implemented in practice.
Medicare Advantage
- The editorial also criticizes Republicans for “eagerly attacking” the health law’s cuts to Medicare Advantage (MA).
- First, as with the IPAB proposals above, the law’s cuts to Medicare Advantage will be used to fund new entitlements, and will not “enhance the ability of the government to pay for future Medicare benefits,” as per CBO’s prior pronouncements.
- Second, it was President Obama who promised that “you will not have to change plans” as a result of his reforms. That promise will be hollow for millions of seniors in MA plans, as enrollment is scheduled to fall in half by 2017, according to the Medicare actuary’s analysis of the law.
- The Times rightfully points out that “some beneficiaries may face higher costs” as a result of the MA cuts – and for millions of seniors, those costs will amount to hundreds of dollars. The non-partisan Government Accountability Office found that seniors in MA plans saved an average of $804 annually. However, this month’s Medicare trustees report found that for two types of popular MA plans – regional PPOs and private fee-for-service – the average rebate by 2015 will be…zero. As a result, seniors will lose the hundreds of dollars in extra benefits they are currently receiving, resulting in higher costs.
- Finally, the law does NOT create a situation where MA plans “compete on an even basis with the Medicare program,” as the editorial asserts. When a beneficiary applies for Medicare, that beneficiary is not automatically enrolled in the most efficient plan, or the plan with the best access, or the best-rated plan, or the “best” plan for that beneficiary – he is automatically enrolled in the government-run plan. Only in the New York Times’ world could a situation where private entities face off against a government-run plan with an in-built monopoly be considered “compet[ing] on an even basis.”
Berwick Nomination
- The editorial asserts that “Republicans are also eagerly, and shamefully, pillorying Dr. Donald Berwick, the new head of the Centers for Medicare and Medicaid Services (CMS).”
- While the editorial also claims that Republicans have been “implying – baselessly – that [Berwick] will introduce socialized medicine and death panels in this country,” the Times uses the next two paragraphs to admit that Berwick “has, rightly, called for an open discussion” regarding rationing health care, and would utilize comparative effectiveness research “to judge whether a new drug or procedure is worth the cost of coverage.”
- It’s worth asking the question: If the Times concedes that Dr. Berwick has called for a discussion of rationing “with our eyes open,” and supports using research to deny patients access to treatments, what exactly is “baseless” in Republicans pointing out Dr. Berwick’s views to a rightly skeptical public?
The Times editorial, like the Obama Administration, arises from the belief that taking away choices from seniors and giving bureaucrats like Dr. Berwick greater control over individuals’ personal health care decisions will help reduce costs. Based on the above facts, many Republicans disagree – and given the unpopularity of the health care law, the American people may beg to differ as well.