Tag Archives: Medicare Trustees Report

Memo to Congress on Obamacare: Take My Coverage–Please!

Last week, Vox ran a story featuring individuals covered by Obamacare, who live in fear about what the future holds for them. They included people who opened small businesses because of Obamacare’s coverage portability, and worry that the “career freedom” provided by the law will soon disappear.

Unfortunately, but perhaps unsurprisingly, Vox didn’t ask this small business owner—who also happens to be an Obamacare enrollee—for his opinions on the matter. Like the enrollees in the Vox profile, I’m also incredibly worried about what the future holds, but for a slightly different reason: I’m worried for our nation about what will happen if Obamacare ISN’T repealed.

What Obamacare Hasn’t Done For Me

Unlike many of the individuals in the Vox story, I am a reluctant Obamacare enrollee—literally forced to buy coverage on the District of Columbia’s Exchange because Washington, D.C. abolished its private insurance market. (While I did contemplate moving to Virginia, where I could at least purchase an Obamacare-compliant plan without going through an Obamacare-mandated website, such changes aren’t easy when one owns one’s own home.)

While in generally decent health, I have some health concerns: mild hypertension (controlled by medications), mild asthma, and allergies that have worsened in the past few years. I’ve gone through two reconstructive surgeries on my ankle, which I’ve chronicled in a prior article. Under “research” previously published by the Obama Administration, my health conditions classify me as one of the 129 million people with a pre-existing condition supposedly benefiting from the law.

Yet while my health hasn’t changed much since Obamacare passed and was implemented, my health insurance policy has already been cancelled once. The replacement I was offered this year included a 20 percent premium increase, and a 25 percent increase in my deductible.

If Obamacare was repealed, or if insurers stopped offering coverage, it would be an inconvenience, no doubt. I don’t know what options would come afterwards. That would depend on actions by Congress, the District of Columbia, and the insurance community. But having already lost my coverage once, and gone through double-digit premium and deductible increases, how much worse can it really get?

Obamacare Will Raise the Deficit

Conversely, I am greatly worried about what will happen if Congress doesn’t repeal Obamacare. Our nation is nearly $20 trillion in debt—yet Obamacare would spend nearly $2 trillion more on health coverage in the next 10 years.

I know what liberals are saying: “But Obamacare will reduce the deficit!” Yes, the Congressional Budget Office did issue a score saying the law will lower the deficit. But consider all the conditions that must be met for Obamacare to lower the deficit. If:

  • Annual Medicare payment reductions that will render more than half of all hospitals unprofitable within the next 10 years keep going into effect; and
  • Provisions that will, beginning in 2019, reduce the annual increase in Exchange insurance subsidies—making coverage that much more unaffordable for families—go into effect; and
  • An unpopular “Cadillac tax” that has already been delayed once—and which the Senate voted to repeal outright on a bipartisan 90-10 vote in December 2015—actually takes effect in 2020 (which just happens to be an election year); then

The Congressional Budget Office estimates that the law will reduce the deficit by a miniscule amount. But if any of those conditions aren’t met, then the law becomes a budget-buster. And if you think all those conditions will actually come to pass, then I’ve got some land to sell you.

Obamacare’s Unspoken Opportunity Costs

Even if you believe in raising taxes to reduce the deficit, Congress has already done that. Except that money wasn’t used to lower the deficit—it’s been used to pay for Obamacare. Even some liberals accept that you can only tax the rich so much, at which point they will stop working to avoid paying additional income in taxes. Obamacare brought us much closer to that point, without doing anything to put our fiscal house in order.

Likewise, the law’s Medicare payment reductions are being used to both pay for Obamacare and extend the life of the Medicare trust fund (at least on paper, if not in reality). If it weren’t for the gimmick of this Obamacare double-counting, the Medicare trust fund would have become insolvent this year. Instead, budgetary smoke-and-mirrors have allowed Democrats to postpone the day of fiscal reckoning—making the day that much worse when it finally arrives.

We Just Can’t Afford Obamacare

Whether they’re liberal websites, Democratic leaders, or Republican politicians attempting to cover as many Americans as Obamacare in their “replacement,” no one dares utter the four words that our country will soon face on any number of fronts: “We can’t afford it.”

But the fact of the matter is, we can’t afford Obamacare. Not with trillions of dollars in debt, 10,000 Baby Boomers retiring every day, and the Medicare trust fund running over $130 billion in deficits the past eight years. Our nation will be hard-pressed to avoid all its existing budgetary and financial commitments, let alone $2 trillion in spending on yet more new entitlements.

So, to paraphrase Henny Youngman, take my health coverage—please. Repeal Obamacare,  even if it means I lose my health coverage (again). Focus both on reducing health costs and right-sizing our nation’s massive entitlements.

Failing to do so will ultimately turn all 300-plus million Americans into the “faces of Obamacare”—victims of a debt crisis sparked by politicians and constituents who want more government than the public wants to pay, and our nation can afford.

This post was originally published at The Federalist.

Will Medicare Premium Increases Be an Issue in November?

Buried in the Medicare trustees report released Wednesday are a few lines that could cause political controversy. “In 2017 there may be a substantial increase in the Part B premium rate for some beneficiaries,” the actuaries write—which means seniors will find out about increases shortly before Election Day.

Higher-than-expected Medicare spending in 2014 and 2015 set the stage for a large premium adjustment in 2016. But, notably, the absence of inflation thanks to the drop in energy prices last year meant that seniors receiving Social Security benefits did not receive an annual cost-of-living adjustment.

The Medicare statute has a “hold harmless” provision that prevents Part B premiums from rising by more than the amount of a Social Security cost-of-living adjustment. For most beneficiaries, the provision meant that in 2016, they received no such adjustment—but also did not pay a higher Part B premium. However, nearly one-third of beneficiaries—new Medicare enrollees, “dual eligibles” enrolled in both Medicare and Medicaid (in places where state Medicaid programs pay the Medicare Part B premium), and wealthy seniors subject to Medicare means-testing—do not qualify for the provision.

The New York Times noted last fall that the hold-harmless provision, by protecting most beneficiaries, exposed some to higher increases: “If premiums are frozen for 70 percent of beneficiaries, premiums for the other 30 percent must be raised more to cover the expected increase in overall Medicare costs. In other words … the higher Medicare costs must be spread across a smaller group of people.”

Congress, seeing a dynamic in which some seniors could face a nearly 50% increase in premiums, crafted a provision to forestall such a high and sudden spike. The Bipartisan Budget Act capped Part B premium increases for 2016, paid for by a loan from the Treasury that would be repaid by seniors in future years.

The legislative language used, however, allows premium spikes to come back with a vengeance. The Bipartisan Budget Act provided that the Medicare Part B “smoothing” provision would be renewed in 2017—but only if Social Security beneficiaries received no cost-of-living adjustment at all. The trustees report out Wednesday says that beneficiaries are projected to receive a very modest adjustment: 0.2%. Although that change is relatively small, it means that the “smoothing” provisions in last year’s budget deal do not apply—and, as the Wednesday Medicare report notes, premiums for some beneficiaries “need to be raised substantially,” up to nearly $150 per month.

Before the trustees’ report was released, some experts had predicted that a series of payment reductions by the Independent Payment Advisory Board (IPAB) under Obamacare would spark talk of “death panels” in political campaigns this fall. Spending levels did not require the board to convene, making that issue moot for now. But that doesn’t mean that Medicare won’t be an issue on the campaign trail. Democrats raised the Part B premium issue last year; expect to hear much more about it before November.

This post was originally published at the Wall Street Journal’s Think Tank blog.

Little Reason to Celebrate about Medicare

Lost amid discussion of the Medicare trustees report and the additional four years until the program becomes insolvent is the fact that for the sixth consecutive year, Medicare’s hospital insurance trust fund paid out more in benefits than it generated in revenue.

Table III.B4 on Page 56 of the trustees report tells the tale. In 2013 Medicare’s hospital insurance (Part A) trust fund took in $251.1 billion in revenue while spending $266.2 billion. On top of this $15 billion loss, the losses from 2008 through 2012 were more than $105 billion. The 2014 loss is estimated to be $13.6 billion.

In total, Medicare Part A is projected to pay out $134.2 billion more than it took in from 2008 through 2014. And the trustees forecast that the losses will not be recouped: Trust fund balances will never recover to their pre-2008 levels largely because of long-predicted demographic changes.

Those who cite the projected 2030 insolvency date to argue that the program does not immediately need significant reforms ignore the fact that the same trust fund has run deficits for six straight years–is expected to for a seventh. Policymakers focused on a delayed insolvency date imply a strategy of managed decline for Medicare. The American people deserve real, lasting solutions.

This post was originally published at the Wall Street Journal’s Think Tank blog.

Friday Report Demonstrates Need for Medicare Reform NOW

On Friday, the Medicare office of the actuary released its alternative scenario to last month’s official trustees report.  The alternative scenario has been released every year since Obamacare was enacted in 2010.  According to the non-partisan actuary, the alternative scenario presents a more realistic projection of future Medicare spending levels because several key provisions in current law are not likely to be implemented – notably the 31 percent reduction in Medicare physician fees scheduled to take effect in January, and many of the major spending reductions in Obamacare, which the actuary (and most independent experts he consulted with) believes cannot be sustained over the long term.

As in prior years, the alternative scenario demonstrates how low payment levels will fall if Obamacare’s scheduled payment reductions take effect.  As many as 40 percent of all providers will become unprofitable by 2050, causing them to go out of business or stop treating Medicare patients.  And Medicare payment rates will plummet to about one-third the levels provided by private health insurance – levels so low they would likely convert Medicare into a second-tier form of health insurance with poor access to care.

This year’s alternative scenario includes a new section highlighting the unrealistic nature of the spending reductions called for by Obamacare’s Independent Payment Advisory Board (IPAB).  The IPAB is a board of unelected and unaccountable bureaucrats empowered to make binding rulings on how to keep Medicare spending below arbitrary, pre-set levels.  The actuary’s report indicates that imposing the IPAB’s scheduled cost reductions “would be quite challenging” – suggesting that this board could impose arbitrary cuts impeding access to care.

As noted in the chart below, Medicare’s 75-year shortfall is nearly 40 percent greater under the alternative scenario – $36.9 trillion, versus $26.4 trillion under a current-law model.  Under the alternative scenario, by 2080 Medicare alone will consume nearly one-tenth of American GDP, as opposed to 6.7% under the current-law model.

As we previously reported, the Medicare trustees report itself presents a bad enough picture about the unsustainable nature of America’s fiscal entitlements.  Friday’s release of the alternative scenario provides further support for reforming entitlements NOW – because even the best-case fiscal scenarios, as bad as they are, are likely far too optimistic.


Unfunded Obligation Projections for 75-Year Budget Window (2012-2086)


2009 Trustees’ Report pre-Obamacare

(in trillions)

2011 Trustees’ Report (in trillions)

2011 Alternative Scenario (in trillions)

2012 Trustees’ Report (in trillions)

2012 Alternative Scenario (in trillions)

Part A (Hospital Insurance)

$13.4 (1.7% of GDP)

$3.0 (0.3% of GDP)

$8.3 (0.9% of GDP)

$5.3 (0.6% of GDP)

$9.7 (1.1% of GDP)

Part B (Obligations less beneficiary premiums)

$17.2 (2.2% of GDP)

$13.9 (1.6% of GDP)

$21.0 (2.4% of GDP)

$14.8 (1.6% of GDP)

$20.5 (2.3% of GDP)

Part D (Obligations less beneficiary premiums and state “clawback” payments)

$7.2 (0.9% of GDP)

$7.5 (0.8% of GDP)

$7.5 (0.8% of GDP)

$6.8 (0.7% of GDP)

$6.8 (0.7% of GDP)


$37.8 (4.8% of GDP)

$24.4 (2.8% of GDP)

$36.8 (4.2% of GDP)

$26.4 (2.9% of GDP)

$36.9 (4.1% of GDP)


Key Points From Today’s Medicare Trustees Report

The official Medicare trustees report has now been posted online here. Here’s a quick take about what you need to know in the report:

  1. Insolvency One Year Closer:  Contrary to predictions made in this space this morning, the insolvency date for the Medicare Hospital Insurance Trust Fund remains at 2024 – despite the 2% sequester cuts scheduled to take effect beginning in January.  In other words, if not for the sequester cuts insisted on by Congress, Medicare’s financial stability would have deteriorated even further.  As it is, we’re still one year closer to Medicare running out of IOUs to cash in to pay its bills (see #3 below).
  1. Obama Economy Making It Worse:  As the Associated Press noted, “Social Security’s finances worsened” – and Medicare’s finances did not improve, sequester notwithstanding – “in part because high energy prices suppressed wages, a trend the trustees see as continuing.  The trustees said they expect workers to work fewer hours than previously projected, even after the economy recovers.”  President Obama’s poor economic record is not only harming workers today, it will harm future generations – seniors in current entitlement programs that are less secure, and children and grandchildren forced to pay the bills for skyrocketing spending – for decades to come.
  1. Deficits as Far as the Eye Can See:  The report once again confirms that the Medicare program is already contributing to the federal deficit, will continue to do so throughout the coming decade, and forever thereafter.  Since 2008, the program has run cash flow deficits; this year’s deficit is expected to total $28.9 billion.  The only thing keeping the program afloat financially is the sale of Treasury bonds in the Medicare Trust Fund – and the redemption of those paper IOUs increases the federal deficit.
  2. Funding Warning:  For the seventh straight year, the trustees issued a funding warning showing that the Medicare program is taking a disproportionate share of its funding from general revenues, thus crowding out programs like defense and education.  While in theory this development should prompt the President to follow his statutory requirement to submit legislation remedying this funding shortfall, the White House has previously refused to do so – relying instead on a signing statement by President Bush to ignore the need for Medicare reform (and also breaking the President’s campaign promises in the process).
  1. Unrealistic Assumptions:  For the third straight year since the passage of Obamacare, the report features a statement of actuarial opinion by the non-partisan Medicare actuary (pages 277-279 of the report), who says “the financial projections shown in this report…do not represent a reasonable expectation for actual program operations.”  The actuary will again issue an alternative scenario for Medicare’s unfunded obligations that he views as more realistic, because the major source of Medicare payment reductions in Obamacare may not be sustained over a long period of time.
  1. Double Counting:  The actuary also previously confirmed that the Medicare reductions in Obamacare “cannot be simultaneously used to finance other federal outlays and to extend the [Medicare] trust fund” solvency date – rendering dubious any potential claims that Obamacare will extend Medicare’s solvency.  As Speaker Pelosi admitted last year, Democrats “took a half a trillion dollars out of Medicare in [Obamacare], the health care bill” – and you can’t improve Medicare’s solvency by taking money out of the program.
  1. Massive Tax Increases:  Today’s report again confirms that Medicare’s finances are also being bolstered by the extension of the health care law’s “high-income” tax – which is NOT indexed for inflation – to more and more individuals over time.  Page 30 of the report notes that “by the end of the long-range projection period, an estimated 80 percent of workers would pay the higher tax rate.”  As JEC recently reported, these tax increases are part of the $4 trillion in “revenue enhancements” over the next 25 years taking place thanks to Obamacare.  When Democrats talk about raising taxes to reduce the deficit, keep in mind that they have already raised taxes in a way that will harm middle-class families over time – and that those tax increases were used not to reduce the deficit but to pay for new and unsustainable entitlements.
  1. Seniors Losing Coverage, Part I:  Table IV.C1 of the report notes that millions of seniors will lose their current Medicare Advantage plans – enrollment is projected to fall from 13.5 million this year to 9.7 million by 2017.  However, thanks to the waiver/demonstration program announced by the Administration, and criticized by the Government Accountability Office in a report this morning, enrollment in Medicare Advantage will not begin falling until after the President has completed his re-election campaign.
  1. Seniors Losing Coverage, Part II:  Table IV.B10 of the report re-stated prior projections that enrollment in employer-sponsored retiree drug plans will fall from 6.8 million in 2010 to a mere 800,000 by 2016 – a drop of nearly 90%.  This rapid decrease in enrollment occurs thanks to provisions in Obamacare that raise taxes on employers who continue to offer retiree drug coverage.

What You Need to Know about Today’s Medicare Trustees Report

Later today the Medicare trustees will release their annual report on the state of the program’s finances.  The report is expected to show a slight improvement in Medicare’s solvency, due largely to the 2% Medicare provider cuts expected under sequestration beginning next year.  Three important points to bear in mind:

  1. Republicans, NOT Democrats, were the ones who insisted on the spending reductions that led to today’s improvement in solvency projections.  Many believe the sequester is an imperfect mechanism for achieving spending reductions.  That said, if Congress had followed the Obama Administration’s initial guidance and rubber-stamped a $2 trillion-plus increase in the debt ceiling without any spending reductions, today’s report would have shown a worse financial predicament for Medicare.  Last year, Secretary Geithner and other Administration officials said it was “critical” and “imperative” that Congress raise the debt limit without being “held hostage” to spending reductions: “Our very strong view is that the debt limit should be passed as a clean, standalone bill.”  Yet today, Secretary Geithner and others within the Administration will try to spin how they are FOR today’s slight improvement in Medicare’s financial picture – without pointing out that they were AGAINST passing any spending reductions at all last year.  Some may find this flip-flop slightly hypocritical.
  1. Conversely, in Obamacare Democrats chose to use Medicare savings NOT to reduce the deficit or improve Medicare’s solvency, but instead to create unsustainable new entitlements.  Speaker Pelosi said it best last year in an interview when she admitted that Democrats “took a half a trillion dollars out of Medicare in [Obamacare], the health care bill” to pay for more unsustainable new entitlements.  Even President Obama, in an interview with Fox News, admitted that “You can’t say that you are saving on Medicare and then spending the money twice.”
  1. Today’s slight improvement in solvency notwithstanding, Medicare is on an unsustainable path, and needs fundamental reform NOW.  Some in the Administration and elsewhere may attempt to use the slight improvement in the program’s finances as an excuse to delay, or even eliminate, additional reforms to the program – which would be a grave mistake for America’s seniors.  The Congressional Budget Office’s March 2012 baseline shows Medicare will run budget deficits forever – this even after taking into account the impact of the 2% budget sequester.  That is not a record the trustees or Congress should attempt to trumpet – because what business would be proud of a balance sheet that shows cascading losses in perpetuity?  While Congress should be working NOW to reform the Medicare program, Senate Democrats are instead reaching the 1,100 day mark on their abdication of leadership, failing to pass a budget and take the tough choices needed to get our fiscal house in order.

We will of course have additional insights and analysis once the report is released later today.

What You Missed Over the Recess

Just in case you were out of town for some or all of the prior two-week recess, here’s a quick rundown of the major events in health care that took place over the break…

Shocker: Obamacare Will Increase the Deficit:  Medicare public trustee Chuck Blahous released a report last week explaining how, after taking into account Medicare double-counting and other unrealistic assumptions, Obamacare will likely increase the deficit by hundreds of billions of dollars.  The White House’s response to the report noted favorable scores from the Congressional Budget Office – even though CBO itself admitted that the major savings assumptions in the law were unrealistic and unlikely to be sustained over the long term.  It’s also worth noting that Democrats’ claims Obamacare will reduce the deficit come from the same party that said the CLASS Act would be solvent for 75 years – which turned out to be a slight over-estimate, as the program was killed as unsustainable before it ever even got off the ground.

Another Obamacare Flop:  The Administration attempted to trumpet its latest round of accountable care organization (ACO) participants as a remarkable achievement.  However, as National Journal pointed out, the number of participating hospital and doctor groups (59 total) is less than one-fourth of the 270 ACOs the Administration predicted would participate last October – indicating that many providers remain reluctant to embrace the Administration’s top-down, government-centric approach to “controlling” health costs.

Thanks to Obamacare, You Can’t Spell Insurance without I-R-S:  The Hill reported that the Internal Revenue Service is in the process of receiving approximately half a billion dollars from a government “slush fund” to implement provisions of Obamacare.  This development comes after liberals derided Republican claims that Obamacare could result in the hiring of thousands of new IRS employees.  Moreover, the “slush fund” transfers come outside of the usual appropriations process, thus leading to a lack of accountability regarding this new funding, as Ways and Means Committee Chairman Camp pointed out in a letter to the IRS.

Liberal Advocate Admits Medicaid Stigmatizes the Poor…  One analyst at a liberal advocacy group told the Salt Lake City Tribune last week that “Medicaid and SCHIP already have a negative connotation in the community.”  A study by the Manhattan Institute bolstered this claim, as it quantified how Medicaid patients suffer from longer wait times and poorer health outcomes.  According to a recent report by the Medicare actuary, Obamacare will ensnare 25.9 million more Americans in a program that even liberals admit stigmatizes the poor.

…As Conservatives Show a Way to Reform the Program:  Even as liberals admitted that the current Medicaid program carries negative connotations, an editorial in the Wall Street Journal illustrated how the program can be enhanced through state flexibility, thereby improving care for patients and saving money as well.  The editorial highlighted a December study by non-partisan analysts at the Lewin Group on Rhode Island’s global compact waiver.  According to Lewin, the flexibility afforded Rhode Island’s Medicaid program “had a positive impact on controlling Medicaid expenditures,” and when it comes to disabled beneficiaries “reduced expenditures for this population while at the same time generally resulting in improved access to physician services.”  The contrast between flexibility yielding success in Rhode Island and Washington’s top-down mandates is stark – at a time when states face budget deficits totaling a collective $175 billion, Obamacare is imposing new unfunded mandates of at least $118 billion, thus undermining rather than supporting efforts like Rhode Island’s success story.

New Polls Confirm Obamacare’s Unpopularity:  A new poll of physicians under 40 showed their disapproval of the health care law – more than twice as many young doctors thought the law would have negative effects (49%) compared to positive outcomes (23%), and Obamacare (along with its myriad regulations) was the number one reason 57% of young physicians were pessimistic about the future of American health care.  A separate Fox News poll found that two-thirds of Americans believe the Supreme Court should strike down all of Obamacare (42%) or its unpopular individual mandate (24%).  The Fox poll also found that a majority (56%) of Americans believe President Obama was trying to intimidate the Supreme Court through his “unprecedented” attack on the Court (which fact-checkers debunked as being wildly inaccurate).

Read the Bill and It Won’t Pass:  A majority (55%) of Americans also told last week’s Fox poll they did not believe Obamacare would have passed if every Member of Congress actually read the bill before voting on it.  Recall that multiple Democrats publicly stated that reading the bill was a waste of time, because “we have to make judgments very fast,” and because “we hire experts” to read the bill instead.

Freedom under Renovations; Omen for SCOTUS’ Consideration of Obamacare?  According to the Architect of the Capitol’s office, workers began renovations on the statue of Freedom Triumphant in War and Peace above the Capitol on April 2.  The restoration and cleaning work is scheduled to be completed by mid-May.  Some may find the timing of this work ironic, as the renovations began the week after Supreme Court arguments on Obamacare, and will be completed by the expected June ruling.  Here’s hoping that Freedom is restored – both literally and metaphorically – later this spring.

Obama’s Medicare Dis-Advantage

Democrats will likely attempt to trumpet a GAO report released today regarding Medicare Advantage enrollment for 2011 as claiming that the Medicare Advantage program will be unaffected by Obamacare.  (The report is not yet online, but should be posted here in the coming hours.)  While Democrats’ newfound interest in the Medicare Advantage program is certainly welcome, if perhaps a tad cynical, the claims are both incomplete and misleading.  First, less than one percent of Obamacare’s cuts to MA actually went into effect in 2011, according to the Congressional Budget Office.  Second, as the Associated Press previously reported, Medicare Advantage figures for 2012 are likely to be skewed due to bonuses paid out by a temporary, multi-billion dollar demonstration/waiver program – one that even Democrats admitted was implemented because Medicare “could not tolerate dislocation, given the political climate.” (See our full write-up of this issue from back in September here.)  In other words, the Medicare Advantage program is NOT immune from Obamacare cuts – it merely won a temporary reprieve while the President campaigns for re-election.

As we previously reported, both CBO and the Medicare trustees found that Medicare Advantage enrollment is still projected to decline, just that enrollment won’t start falling until 2013, after the President runs for re-election. (Think that timing is a coincidence?)  Another report released last month also demonstrated how Medicare Advantage plan enrollment will decrease across the country thanks to Obamacare.  The study found that Medicare Advantage enrollment will be cut in half by 2017 thanks to Obamacare, and that plan choices will be reduced by two-thirds, with an average of almost 18 fewer MA plans being offered in each county.

As Speaker Pelosi recently admitted, Democrats “took a half a trillion dollars out of Medicare in [Obamacare], the health care bill” to pay for more unsustainable new entitlements.  The idea that this level of payment reductions will not have an effect on beneficiaries defies logic.  And given that this month’s Kaiser Family Foundation health tracking poll found that only 22 percent of Americans believe Obamacare will make Medicare better off – an all-time low – the American people don’t seem to be buying this fiscal sleight-of-hand either.

Donald Berwick’s Greatest Hits

Given Medicare Administrator Berwick’s resignation today, it’s worth remembering some of the highlights (or lowlights) of Berwick’s tenure.  Berwick spent most of his time in a virtual bunker since his controversial recess appointment last July – hiding from reporters’ questions, and going to great lengths to do so:

  • “Exited behind a stage” at a July press event on health IT regulations before the media were allowed to ask questions, according to Inside Health Policy;
  • Declined to participate in an August conference call with reporters to discuss a report on Medicare’s solvency;
  • Declined to participate in the release of the annual Medicare trustees report;
  • Declined to respond to interview requests from both the New York Times and Congressional Quarterly;
  • Declined to remain on an August conference call “to take questions from reporters,” according to The Hill;
  • “Left without taking questions from reporters” after delivering a speech to health insurance executives and lobbyists;
  • Declined to answer a series of questions from a reporter about his prior writings on rationing; an Administration official accompanying Dr. Berwick responded solely that “He’s not taking any questions;” and
  • Failed to deliver the “point-by-point rebuttal” to his critics previously promised at his (VERY brief) Finance Committee hearing in November;
  • Required a “security escort” to avoid questions from reporters during an appearance in early December;
  • Held a closed-door meeting with lobbyists and other industry executives.

Recall also that Berwick never responded to substantive document requests related to his nomination either.  Berwick promised Sen. Grassley to release financial statements related to his tenure as the head of the Institute for Healthcare Improvement, only to renege on this promise once he accepted his recess appointment last year.  It remains unclear whether, or what, Berwick was attempting to hide by not disclosing these documents.

Berwick had some “achievements” while at CMS – for instance, a preliminary rule for accountable care organizations so onerous and bureaucratic virtually every health care provider group imaginable promised not to participate.  But it’s worth asking:  If a Medicare Administrator has to go to such seemingly absurd lengths to avoid scrutiny of his own record, did he EVER belong in that role in the first place?  And how does the “most transparent and accountable Administration” justify such conduct?

Questions for Secretary Sebelius on IPAB

Today begins a double-header of IPAB-related hearings in the House; Secretary Sebelius will be testifying before the House Budget Committee this morning, and before the Energy and Commerce Committee tomorrow morning.  In advance of these hearings, we’ve prepared a list of possible questions surrounding IPAB – Obamacare’s board of unelected bureaucrats – that the Secretary’s testimony may help resolve:

Fiscal Impact

  1. Both the Congressional Budget Office and the Medicare trustees agree that the Medicare program is running permanent deficits and will never come into balance absent reform.  Given this dire fiscal situation, exactly how long will IPAB extend the solvency of the Medicare program?


  1. You recently wrote in a Politico op-ed that “contrary to critics’ contentions, the board’s work will be transparent, independent, and accountable to Congress and the President.”  Where in the statute is the requirement that IPAB’s bureaucrats conduct a public process, and solicit public comment, prior to issuing its recommendations?  Put another way, is there anything prohibiting IPAB members from negotiating backroom deals regarding their recommendations, similar to the “rock-solid deal” the Administration struck behind closed doors with Big Pharma?
  2. In May the Administration proposed requiring state Medicaid programs to obtain public comments before reducing provider reimbursement levels.  Why is the Obama Administration imposing public comment requirements on state Medicaid programs, but not imposing a similar requirement on its controversial IPAB?


  1. Your Politico op-ed notes that “economists” will comprise some of the “health experts” appointed to IPAB.  Why do you believe economists are qualified to pass judgment on health care treatments?
  2. According to the statute, a majority of IPAB members must not be “individuals who are directly involved in the provision” of health care services.  Do you believe it’s appropriate that a majority of IPAB’s members must be bureaucrats rather than doctors and nurses who treat patients firsthand?
  3. Why hasn’t the President nominated his appointees to IPAB yet?  The statute gives the board $15 million in mandatory funding, beginning in October.  If the President believes IPAB is such a good thing, why hasn’t he nominated members promptly, so the board can be up and running in short order?


  1. You have claimed that IPAB “is expressly prohibited from making recommendations that ration care.”  Where exactly in the statute is the term “rationing” defined?
  2. Where in the statute is there a prohibition on IPAB making recommendations that could reduce access to breast cancer treatments – say, mammograms?  What about diabetes treatment and prostate cancer screenings – are there any provisions in the law that explicitly state IPAB cannot reduce access to those treatments?
  3. Last week the New York Times editorial board wrote that “A prime driver of our escalating health care costs is the advance of medical technology and the understandable desire of patients and doctors to adopt the latest treatment.  Sooner or later, as the nation struggles to contain health care spending, we may need to devise measures to determine whether very high-priced drugs provide enough medical benefit to warrant paying the bill.”  Do you agree?

Judicial Review

  1. If someone believes that IPAB has in fact rationed care, what redress does that person have to challenge the board’s decisions, seeing as how the board’s recommendations are exempt from judicial or administrative review?
  2. For nine years you served as Executive Director of the Kansas Association of Trial Lawyers, whose mission statement is “to uphold and advocate for the right of the individual for redress of grievances and access to the courts.”  How is your support for IPAB – which blocks access to the courts for any beneficiaries harmed by the board’s recommendations – consistent with the mission statement of the organization you headed for nearly a decade?
  3. In 2009 President Obama stated that he was “not advocating caps on malpractice awards…which I personally believe can be unfair to people who’ve been wrongfully harmed.”  If that’s still the President’s position, why does IPAB cap damages for people wrongfully harmed at ZERO – by never allowing them to file legal action at all?
  4. If the IPAB will not harm seniors and Medicare beneficiaries, why does the statute prohibit lawsuits against its recommendations in the first place?
  5. Would the Administration support repealing the provision prohibiting judicial review of IPAB’s recommendations?  Why or why not?

Other “Expert” Recommendations

  1. Your Administration has defended the IPAB on the grounds that independent experts should be called upon to make recommendations “to help Medicare provide better care at lower costs.”  The Medicare Payment Advisory Commission – a panel of experts similar to IPAB – recently came out in support of requiring co-pays for home health visits, on the grounds that a modest co-pay would encourage appropriate use of home health care.  Does the Administration agree with the recommendations of the MedPAC “experts?”
  2. Likewise, the President’s own Fiscal Commission supported restructuring Medigap insurance to “constrain over-utilization and reduce overall spending.”  Does the Administration agree with this recommendation of the “expert” panel the President himself appointed?

Broader Applicability

  1. Do you believe Members of Congress should follow, and/or be subject to, IPAB’s recommendations?  Will you do so yourself?
  2. Do you believe IPAB supporters who claim to support “experts” making health care choices should use their own independent resources to buy out of a rationing regime if IPAB restricts access to needed services and treatments?
  3. Does the Administration plan on running ads featuring Andy Griffith informing Medicare beneficiaries that their health care will be determined in part on the recommendations of a board of unelected bureaucrats?  If not, why not?

House Republican Budget

  1. You recently received Three Pinocchios from the Washington Post for making “outrageous” assertions and “ present[ing] a highly inflammable comment as a statement of fact” about the House-passed budget, comments for which the Post said you “should be ashamed.”  Do you agree with the Post’s characterization of your allegation that “there’s no question” patients would “die sooner” under the House-passed budget?  If not, why not?  Do you still stand by your original comments?
  2. You’ve previously testified before Congress that you have in fact read all of Obamacare.  Therefore, can you please explain the language on page 111 of the statute regarding the inflation adjustment mechanism for Obamacare premium subsidies in the years after 2018, and explain how exactly this inflation adjustment mechanism differs from the inflation adjustment mechanism for Medicare premium support payments included in the House-passed budget, which you said would cause seniors to “die sooner?”