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Factsheet #99 on Health Care Reform, Medicare and Health Care

January 25, 2012

Obamacare: Obama Ends Medicare As We Know It

We Need Medicare Reform, but Not Obamacare

  • Obamacare Ends Traditional Medicare, but the Wrong Way: Former House Speaker Nancy Pelosi claimed that the health law protects Medicare. The truth: Obamacare makes massive changes to the program. Obamacare contains more than 160 provisions for Medicare that increase government’s control over the delivery of care, hit doctors with unsustainable payment cuts, and leave taxpayers with higher deficits.
  • Obamacare Continues an Outdated Model for Reform: Obamacare expands central planning and tightens price controls on providers. These recycled mechanisms have yet to show any success in driving down costs without harming patients’ access and quality of care. Even the program’s chief accountant says many Medicare providers cannot survive the cuts.
  • Obamacare Undermines the Doctor–Patient Relationship: On top of the severe payment cuts facing physicians that will threaten seniors’ access, the law weakens the doctor–patient relationship by linking payment not to patient outcomes but to adherence to government protocol.

Medicare Spending is Rising Faster than Other Program Spending

Obamacare Breaks with Traditional Medicare

  • Caps Medicare Spending: Obamacare places hard caps on Medicare spending that ends the open-ended entitlement program. While there is a broad consensus on the need to put Medicare on a budget, Obamacare turns these major payment decisions over to an unelected board. The Independent Payment Advisory Board will control the Medicare budget and be unstoppable unless Congress intervenes.
  • Ends Fee-for-Service: Obamacare’s Center for Medicare and Medicaid Innovation will conduct payment and delivery reform demonstrations with a goal of changing Medicare from fee-for-service to “capitated” or salaried payments. Unlike a pluralistic system of competitive plans, Medicare patients will have little or no control over whether or not they will be subject to these changes.
  • Diverts Medicare Savings to Pay for Obamacare: Obamacare squeezes an estimated $575 billion out of Medicare from provider payment cuts in its initial 10 years. But rather than plowing those savings back into Medicare to enhance the solvency of the program, the savings will be used to expand other Obamacare entitlements and programs.

Premium Support: A Better Option to Save Medicare

  • Expands Choices: A premium-support system in Medicare would expand the private health plans available to seniors. Today seniors already make a series of crucial choices in Medicare, choosing among private physicians, prescription drug plans, Medicare Advantage, and supplemental insurance to cover what traditional Medicare does not offer.
  • Intensifies Competition: Forcing health plans to compete directly for seniors’ business would lead to better quality at lower costs, as it does in every other marketplace. There are already successful models of plan competition, including Medicare Advantage, the Part D drug program, and most notably the Federal Employee Health Benefit Program.
  • Achieves Long-Term Savings: Premium support restructures the financing of Medicare so that the market forces of competition and choice help drive down cost and improve quality. These changes provide Medicare patients with greater transparency and bigger savings for both seniors and taxpayers.

For more information, please visit http://savingthedream.org.

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