|SITREP - March 22 2012|
Two big items for your radar this week: First, the House voted to repeal the Independent Payment Advisory Board (IPAB) part of the President’s healthcare reform law. If you haven’t heard of IPAB, you’ve probably heard of “the rationing board”. They are the same thing.
In a nutshell, part of the Obama administration’s strategy for “controlling costs” in government healthcare spending was to establish a board of fifteen individuals – all appointed by the president – who would make determinations about which treatments were sufficiently cost-effective and which were not. If the board decides that you are too old to warrant a knee replacement, you won’t get the knee replacement, regardless of the medical value of doing so. Similarly, if the board decides that doctor reimbursement rates are too high and they cut them, many physicians may decide taking Medicare patients isn’t worth it.
It’s worth noting that the board is set up in such a way that no more than seven of the fifteen members are medical professionals. The majority, therefore, are bean counters and are set up to win any dispute over cost vs care. In my view, seniors have paid in to this system for their entire lives with the expectation that they will receive the world’s highest level of care when they reach the age that that care is needed the most. By nickel and diming them on critical care like this, we would be breaking the promise of Medicare. I represent 250,000 senior citizens and I’m not going to stand for it.
In other major news, the House GOP Budget was unveiled this week. I’ll finish going through the document over the weekend and will have more to report, but since we’re already on the subject of Medicare, I wanted to tell you a little bit about that piece.
In a nutshell, everybody – Republicans, Democrats, independent analysts, the Medicare trustees themselves – everybody agrees that Medicare is unsustainable as it currently operates. The math is simple: the average family pays in about $100k into Medicare over the course of their working lives. They collect, on average, however, $300k worth of benefits. That system is able to sustain itself as long as there are at least three working families for every family currently eligible for Medicare. That may have been the case for the last few decades, but it’s changing now. Starting this year, 10,000 Baby Boomers a day will enter Medicare. That pace will continue for the next twenty years. We don’t have enough new workers to keep that ratio up. The program is going bust and if nothing is done, current seniors will see sudden benefits cuts.
This is a link to a House Budget Committee hearing on February 28, 2012 with Stephen Goss and Richard Foster, the Chief Actuaries for the Centers for Medicare and Medicaid Services and the Social Security Administration. Mr. Goss explains what happens if Congress does nothing to save our safety net programs. If you are skeptical and aren’t inclined to take Congress for its word, I would strongly recommend taking a look and making up your own mind about whether we should keep kicking the can down the road.
The consensus in Washington, for obvious reasons, is that the program needs to be saved. The question becomes, what do we do about it?
Senator Ron Wyden, a liberal democrat has been working with Rep. Paul Ryan, the Republican Chairman of the House Budget Committee on a bipartisan Medicare reform plan. The Medicare piece of the “Ryan Budget” is effectively the solution that they worked up.
Anyone 55 and up would see no change whatsoever to their current Medicare program. For those younger that 55, there will be a choice – either take traditional Medicare or stick with a private insurance plan and have the government subsidize the cost of the premiums. It’s a federal healthcare program, so obviously it’s slightly more detailed / complicated than that, but you get the drift.
I’ll be gradually putting together some materials and summaries for you to review, but in the meantime, I wanted you to know that we are taking serious steps again to shore up what might be the single most important federal program for the 5th Congressional District. This is one proposal. If there are others out there, I want to hear them. So as always, I’m looking for your input about what we could be doing better. If you have a minute, let me know what is on your mind.