AARP Confirms Obama Medicare Plan Puts “Unelected and Unaccountable” Bureaucrats in Charge, Cuts Benefits

April 15, 2011

Outline of Obama’s Latest Plan to Gut Medicare Confirms Democrats’ Commitment to Benefit Cuts and Bureaucrats

While President Obama’s latest Medicare plan is short on details, we do know this: Obama’s plan will put seniors’ healthcare choices in the hands of “unelected and unaccountable” bureaucrats, and it could lead to benefit cuts. But don’t take our word for it:


AARP: OBAMA MEDICARE PLAN DELEGATES TO THE “UNELECTED AND UNACCOUNTABLE,” MAY CUT BENEFITS: “We also applaud the President’s commitment to oppose plans that shift costs to seniors, but we are concerned that some provisions of his plan have the potential to break that promise.  Relying on arbitrary spending targets is not a good way to make health policy—especially when decisions may be left to the unelected and unaccountable.” (CEO A. Barry Rand, “AARP Responds to President’s Speech on Fiscal Issues,” AARP, 4/13/2011)


THE WALL STREET JOURNAL: “ALL MEDICARE DECISIONS WILL BE TURNED OVER” TO “UNELECTED COMMISSION CREATED BY OBAMACARE”: “Mr. Obama said that the typical political proposal to rationalize Medicare’s gargantuan liabilities is that it is ‘just a matter of eliminating waste and abuse.’ His own plan is to double down on the program’s price controls and central planning. All Medicare decisions will be turned over to and routed through an unelected commission created by ObamaCare—which will supposedly ferret out ‘unnecessary spending.’ Is that the same as ‘waste and abuse’?


“Fifteen members will serve on the Independent Payment Advisory Board, all appointed by the President and confirmed by the Senate. If per capita costs grow by more than GDP plus 0.5%, this board would get more power, including an automatic budget sequester to enforce its rulings. So 15 sages sitting in a room with the power of the purse will evidently find ways to control Medicare spending that no one has ever thought of before and that supposedly won’t harm seniors’ care, even as the largest cohort of the baby boom generation retires and starts to collect benefits.” (Editorial Board, “The Presidential Divider,” The Wall Street Journal, 4/14/2011)


OBAMA MEDICARE BOARD CREATED TO “PUT THE KNIFE IN SOMEONE ELSE’S HAND” WHEN CUTTING BENEFITS: The hope is that this will free Congress to permit cuts by making it easier for them to dodge the blame. ‘Putting the knife in someone else’s hand will be a relief,’ says Robert Reischauer, director of the Urban Institute and a former director of the Congressional Budget Office. ‘It will allow Congress to rant against the cuts without actually stopping them.'” (Ezra Klein, “GOP Shortsighted in Targeting Health Care Cost Controls,” The Washington Post, 8/19/2010)


AMERICAN MEDICAL ASSOCIATION OPPOSES OBAMA MEDICARE BOARD: “The AMA is opposed to the current scope and authority of IPAB and the lack of flexibility in its mandate. Modification of the IPAB authority and framework is one of the highest legislative priorities for the AMA in the next session of Congress.” (“Independent Payment Advisory Board,” American Medical Association, Accessed 4/14/2011)


As details on Obama’s latest plan to gut Medicare remain scarce, it’s worth remembering that this isn’t the first time Democrats have tried to gut Medicare. Their old plan for Medicare laid the groundwork for 15 percent benefit cuts down the road:


MEDICARE PART A BANKRUPT BY 2029: “The HI [Hospital Insurance Trust] fund still fails the test of short-range financial adequacy, asprojected annual assets drop below projected annual expenditures…by 2012. The fund also continues to fail the long range test of close actuarial balance.” (Timothy F. Geithner, Hilda L. Solis, Kathleen Sebelius, and Michael J. Astrue, “A Summary of the 2010 Annual Social Security and Medicare Trust Fund Reports,” Social Security Online, Accessed 3/15/2011)


23 PERCENT PAYROLL TAX HIKE AND STEEP CUTS TO BENEFITS: “Over 75 years, HI’s [the Hospital Insurance Trust Fund’s] estimated actuarial imbalance is 23 percent as large as payroll taxes, and 16 percent as large as program outlays.” (Timothy F. Geithner, Hilda L. Solis, Kathleen Sebelius, and Michael J. Astrue, “A Summary of the 2010 Annual Social Security and Medicare Trust Fund Reports,” Social Security Online, Accessed 3/15/2011)


AMERICAN ACADEMY OF ACTUARIES: 15 PERCENT CUT IN BENEFITS. “The projected HI deficit over the next 75 years is 0.66 percent of taxable payroll, down from last year’s estimate of 3.88 percent.Eliminating this deficit would require an immediate 23 percent increase in payroll taxes or an immediate 15 percent reduction in benefits—or some combination of the two. Delaying action would require more drastic tax increases or benefit reductions in the future.” (“Issue Brief: Medicare’s Financial Condition: Beyond Actuarial Balance,” American Academy of Actuaries, Nov. 2010)