While the Senate debates the repeal of ObamaCare, an important deadline looms.The Independent Payment Advisory Board (IPAB), created by ObamaCare, must be repealed by August 15^th of this year.

What is the IPAB?

IPAB is a panel of bureaucrats empowered with the authority to make cuts in Medicare programs and spending without Congressional approval. These unelected government officials would be unaccountable to the voters and the duly elected representatives in Congress.

The board is composed of 15 individuals appointed by the President. This body of unelected officials will make their recommendations based on the growth of Medicare spending. In each year that Medicare’s per capita costs exceed a certain threshold, IPAB will be responsible for making proposals to reduce this projected cost growth to the specified threshold. The policies will then take effect automatically unless Congress specifically passes legislation blocking them and the president signs that legislation. This can only be done by a three-fifths “super-majority” vote.

The purpose of IPAB is to give political cover to the White House so that unpopular cuts in Medicare spending can be made without political repercussions. These unelected officials will be unaccountable to the voters.

ObamaCare stipulates that fewer than half of the 15 members of the IPAB can be involved in providing or managing the delivery of Medicare items and services, including healthcare providers. Furthermore, no member can serve as a practicing physician or be otherwise employed. Board members are appointed by the President but must be confirmed by the Senate.

To date no one has been appointed to the board. But the law stipulates that the HHS Secretary is a voting member of IPAB – and can act unilaterally if there are no other IPAB members appointed. Therefore, current HHS Secretary Tom Price has the power to make recommendations to cut Medicare spending – and it would take a “super-majority” of Congress to alter these recommendations. While this is less frightening under the leadership of Price than it was under his predecessors, Kathleen Sebelius and Sylvia Matthews Burwell, it is nevertheless a great deal of power in the hands of one individual.

ObamaCare has provisions built into it that will make it nearly impossible for future Congresses or Presidents to block these proposals. These provisions have the effect of eliminating any accountability to the people. In my latest book, The ObamaCare Reality, I reference the work of Michael Cannon who gives five reasons for this:

• ObamaCare exempts the board’s proposals from the rulemaking requirements that Congress imposes on other executive branch agencies. The law does not require IPAB to hold hearings, take testimony, or receive evidence from the public.
• ObamaCare authorizes IPAB to submit its proposals directly to Congress as “legislative proposals.” The President’s constitutional authority is undermined by this provision because it removes his discretion on what legislation is submitted to Congress.
• Once the legislative proposal is submitted to Congress, ObamaCare protects it by codifying changes to the normal parliamentary rules that permit the Senate or the House of Representatives to modify the proposal. Then, if Congress fails to pass an alternative proposal that achieves the same budgetary goal, the IPAB proposal becomes law automatically.
• If Congress fails to repeal IPAB through the restrictive procedure laid out in the law, then after 2020, Congress loses the ability to even offer substitutes for IPAB proposals. The HHS Secretary is then empowered to implement IPAB’s proposals even if Congress does enact a substitute. To constrain IPAB at all, Congress must do so between January and August of 2017.
• ObamaCare gives IPAB and the HHS Secretary the sole authority to judge their own actions by prohibiting administrative or judicial review of the Secretary’s implementation of an IPAB proposal.

 

How can this unconstitutional seizure of the authority of Congress and the President be stopped?

The law specifies precisely how IPAB can be repealed:

1. Wait until the year 2017.
2. Introduce a specifically worded “Joint Resolution” in Congress, both the House and Senate, between January 1 and February 1, 2017.
3. Pass that resolution by a three-fifths “super-majority” vote in both the House and Senate by August 15, 2017.
4. The President must then sign the “Joint Resolution.”

 

There are only two weeks left for Congress to get this done!

 

Here is a prescient warning from the past:

“The conviction grows that if efficient planning is to be done, the direction must be “taken out of politics” and placed in the hands of experts – permanent officials or independent autonomous bodies. . . .The delegation of particular technical tasks to separate bodies, while a regular feature, is yet only the first step in the process whereby a democracy which embarks on planning progressively relinquishes its powers.”

Friedrich Hayek, 1944 – The Road to Serfdom

 

The Senate failed to pass its version of the Republican healthcare reform. All Democrats refused to vote for the bill. Most Republicans favored the bill but a few complained it was too conservative while a few others complained it was too moderate. But all of these Senators failed to understand the bottom line.

The bottom line is pretty simple when you get past all the rhetoric. Do you want ObamaCare or something better?

ObamaCare Status Quo

It’s now seven years since the Affordable Care Act, better known as ObamaCare, was passed in March, 2010. It passed without a single Republican vote and now it looks like any replacement will have to pass without a single Democratic vote. Such is the current polarized state of our Congress.

Let’s review briefly what ObamaCare promised us:

• Universal insurance coverage – Before ObamaCare about 84% of the country had health insurance. Today about 90% are insured, a gain of 6% with about 20 million more insured; about 15 million through Medicaid expansion and about 5 million through private insurance subsidies. More are now covered by insurance but most of these have second-class healthcare (Medicaid) or can’t afford the deductibles to use their new private insurance.
• Lower premiums ($2500 less according to President Obama) – Reality is premiums have climbed an average of $3500 making the change about $6000 more per year than promised. That doesn’t even include the rapid rise in deductibles that now average $6000 per individual and $12,000 per family. Prices will continue to rise rapidly as more and more insurers are leaving the market. Many counties will have no insurers in 2018.
• Freedom to choose your doctor (another famous Obama promise) – Few people have been able to keep their doctor as they have been forced onto Medicaid or onto exchange plans their doctor doesn’t accept.
• Freedom to choose your health insurance plan (another famous Obama promise) – For those Americans choosing their insurance on the ObamaCare exchanges, there may be only one choice – or even none! This situation is sure to be worse in 2018 if ObamaCare remains the law.(see graphic below)

 

 

 

• Lower the “cost curve” of medical inflation – It’s rising rapidly again after a steady decline in the years just prior to ObamaCare.
• Lower government spending on healthcare – The expansion of Medicaid has ballooned government spending. According to the CBO, Medicaid spending increased more than 250% from 1990 to 2012. Recent CBO projections expect Medicaid costs to increase 67% over the next decade. If so, Medicaid’s share of GDP may reach nearly 5 times as high in 2027 as it was 50 years ago. This growth greatly outstrips economic growth and inflation.

 

ObamaCare has failed to keep its promises!

The Better Healthcare and Reconciliation Act (BHRA)

The Republican plan in the Senate is called the Better Healthcare and Reconciliation Act of 2017 or BHRA. Here is what it promises:

• Restore freedom of choice ­– With the repeal of the ObamaCare Individual Mandate, you will have the choice to purchase insurance – or not. There will be no tax (as with ObamaCare) if you choose not to be insured. The CBO predicts 15 -18 million Americans will like this change and drop their insurance. For those who want less coverage than they have now at a lower price you will have that option, too. With no mandated coverage and freedom to choose the coverage you need, no one will be forced to violate their religious freedom, either.
• Lower premiums – That depends on whether or not you were being subsidized under ObamaCare (those with incomes below 400% of FPL, the sick and the elderly.) Premiums will go down for the young, the healthy, and those who don’t want the expensive coverage mandated under ObamaCare. For those who have expensive pre-existing conditions premiums may rise but high-risk pools will subsidize their premiums keeping them affordable. No one can be denied coverage due to pre-existing conditions. Low-income Americans will continue to get government support through tax credits that are means-tested.
• Control of Medicaid spending – Contrary to liberal and media distortions, there are no “cuts” in Medicaid spending. There is a reduction in the rate of growth of spending which will be tied to medical inflation until 2025 and then to overall inflation thereafter. This significant reform promises to stabilize Medicaid to ensure it continues to be available for those who truly need it for years to come. States will be given greater flexibility to innovate in order to control costs and incentivize able-bodied adults to get off Medicaid.

 

The Binary Choice

Congress is left with a simple choice; retain the failing ObamaCare or try something different. In seven years ObamaCare has shown it is a system that cannot support itself without huge government subsidies to bailout the insurance companies. Even with subsidies the costs are skyrocketing and the premiums, too – because it is a poorly designed system. With insurers running for cover and many counties left with no choices, it is insane to retain this system.

Democrats are ignoring the deficiencies of ObamaCare because their goal is a single-payer system to “rescue” the country after Republicans fail to pass their version of a replacement. Any Democrat that believes America will be better off with a single-payer system hasn’t been paying attention to their neighbors in Canada, or Great Britain and Sweden, where these systems are failing now. Any Republican that thinks they’ll get a better plan if they negotiate with the Democrats is living in an alternate universe.

Compromise is the essence of legislating. It’s time for those members of Congress, on both sides of the aisle, looking for a better deal to learn to compromise. In an earlier post (Healthcare Reform Principles That Cross Party Lines) I reported that the BHRA contains all eight principles that a bi-partisan group of experts agreed must be in the healthcare bill. The BHRA bill is the compromise that everyone should agree to. It’s time to quit the posturing and vote to improve America’s healthcare.

 

 

ObamaCare is killing jobs. We discussed that recently (ObamaCare – The Jobs Killer). It is also ruining state budgets because of the changes it made in Medicaid.

State Budget Choices

Unlike the federal government, states must balance their budgets. That makes it a zero-sum game. If the cost of one budget item goes up then the revenues available for other budget items must go down.

Former Oklahoma Governor Frank Keating and Dr. Doug Beall, a radiologist in Oklahoma, explain the impact that Medicaid growth is having on Oklahoma in an Op-Ed to The Wall Street Journal. They say they until recently, education always was the number one expense item in the budget. But now Medicaid has reached the top of the budget requiring spending of over $5.1 Billion a year; more than the $3.4 Billion spent on K-12 schools and the $9.4 Billion spent on higher education combined.

What is the impact of these changes in the state budget?

There are real consequences to these changes. In Oklahoma it means lower teacher pay, fewer textbooks, deferred road maintenance, fewer mental health treatment options in the state justice system to prevent incarceration of nonviolent offenders, and lower reimbursement rates for doctors who treat Medicaid. This later change means fewer doctors accepting Medicaid, which means decreased access to healthcare for Medicaid patients. All these adverse effects despite the fact that Oklahoma declined to accept the Medicaid expansion of ObamaCare!

In states that did accept Medicaid expansion the situation is worse. States like Illinois, Ohio, Washington, and California find themselves in real budget crisis since ObamaCare pays more for able-bodied adults on Medicaid (who don’t cost as much) than they do for those with serious disabilities who are covered under the old rules.

According to state documents reviewed by the Foundation for Government Accountability, as Illinois expanded Medicaid more than 800 people already on the program’s waiting list died. Even in states that refused the expansion, like Oklahoma, surging costs have cut people off from care while leaving them still technically “covered.” This is due to the growth in Medicaid spurred by the Individual Mandate of ObamaCare that forced those previously eligible, but not enrolled, to enroll to avoid a tax. These “old eligibles” are not reimbursed under the generous new ObamaCare rules but rather the old, less generous reimbursement rates.

In Oklahoma this resulted in a growth of Medicaid from just under 500,000 before ObamaCare to more than a million. Today more than one-fourth of the state’s population is on medical welfare. Medicaid covers 57% of all births in Oklahoma. Up to 72% of all children are on Medicaid at some point in their first five years, according to the Oklahoma Health Care Authority. Government dependency has growth despite a 70.9% growth in per capita income from $26,720 in 2003 to $45,682 in 2016.

This is precisely why the growth of Medicaid needs to be curtailed with caps on spending growth tied to inflation – just as the Senate healthcare reform bill stipulates. The alternative is out of control spending that threatens other important government services including public education, law enforcement, and infrastructure spending. Worst of all, those most vulnerable Americans who really need Medicaid or other forms of government support will fail to get it. This is the reality that progressives refuse to acknowledge.