The Truth About Medicare Reform: The President’s Plan

David Williams

September 4, 2012

(This is the first in a two part series on Medicare reform) If what the pundits say is true, then the issue of Medicare and what to do with it is what will define this year’s presidential election.  While Medicare may be the issue of the day, the discussion and its significance goes much deeper than merely a debate over health care policy. At the heart of the matter is the fundamental difference between the philosophical approaches undergirding the two predominant political parties in the U.S.  The decision a voter makes at the ballot box won’t be merely choosing between two candidates, it will be a question of who is the most capable agent to make decisions that will affect one’s health care as well as the way we live our lives.  Ultimately, the question is whether the individual or government is best at determining how we live in society.

Even though this seems like a tremendously important and complex philosophical question, the decision becomes a lot easier when considering what each candidate would do to “fix” Medicare and more generally health care. Obamacare is the epitome of government possessing control over your health care.   With a loud declaration of government might, the law effectively strips individuals from making their own decisions regarding the types of service and quality of health care.

The Obama campaign has finally realized that word is getting out about his flawed proposal to reform Medicare (in order to cover a mere portion of the exorbitant costs of Obamacare).  So when everything else fails, it’s always a good idea to use a taxpayer-funded resource to espouse one’s political policies.  The president did this last week when he took to the airwaves in a weekly radio address to explain that his proposed reforms “won’t touch your guaranteed Medicare benefits. Not by a single dime.”  No different from previous statements, this one was long on words, but short on facts.  To put it succinctly, his is flat-out wrong.

According to the Congressional Budget Office$716 billion will be taken out of Medicare funds over the next 10 years.  This money will go towards the expansion of the massive entitlement programs Obamacare creates (159 new bureaucracies to be exact).  In President Obama’s radio address, the president claimed that “… my goal has been to strengthen these programs now, and preserve them for future generations.”  It’s difficult to see how that statement is an accurate one given the amount of funding his plan strips from Medicare.  Not to mention, it’s puzzling to understand how a program is being strengthened when it’s simultaneously being robbed of funding.

In order to achieve the $716 billion “savings,” Obamacare sets up the Independent Payment Advisory Board (IPAB).  This group of 15 unelected officials will have to come up with savings by not getting rid of waste, fraud, and abuse, but by rate reductions for providers of service.  Changes to Medicare Advantage will result in cuts of $150 billion over 10 years.  This will inevitably force insurers to scale back extra benefits or withdraw completely from the program

Additionally, Obamacare imposes a tax hike in the form of a Medicare “payroll tax.”  Although its name suggests differently, the additional revenue this tax will bring in will not go to Medicare coffers.  In short, Obama plans to increase taxes under the auspices of the need to cover Medicare costs.  But to the taxpayers’ chagrin, this new source of revenue will go to pay for Obamacare.  Making matters worse – as if the increased tax burden is not problematic enough – because Obamacare is so expensive, Obama turns around and raids the Medicare trust fund to cover additional costs incurred as a result of his health care plan.

The list of shortcomings and damage Obamacare inflicts could go on and on, but it’s important to remember that at its core Obamacare is an affront to the American people.  It places our fate in the hands of unelected bureaucrats, who are supposedly more capable and better able than we are to choose what health care program best suits our needs.  Fortunately, Obama’s plan for Medicare “reform” isn’t the only one.  The second part will examine an alternative option that empowers individuals as opposed to the federal government.

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