Wednesday, April 6, 2011


OBAMACARE, technically, the Affordable Care Act or ACA, is due for a revision, something we were originally told couldn't be done. In our previous piece on this subject, we pointed out flaws in Section 10320, the part of the ACA that creates an IPAB or Independent Payment Advisory Board. This part of Obamacare establishes the authority for an unelected group of bureaucrats, appointed by politicians, to have authority over what is payable and what isn't, including Medicare. Section 10320 poses danger to hospitals, their patients, and their doctors. It is a plain and simple alternative to classical rationing. It's the Obamacare answer to the Palin-protagonists whose fear of rationing began a hubbub that won't end. Senator John Cornym introduced legislation to repeal Section 10320. He has been joined by Congressional Representative Phil Roe. Sponsors and supporters include the American Hospital Association, the American Academy of Orthopedic Surgeons, and the American Osteopathic Association. The general objection is that Section 10320 sets up an unelected IPAB whose members will be responsible to their own patrons, the politicians who appointed them, and that the first casualty will be quality of care.

The rub is that there is a cadre of political activists who, while opposing Section 10320, don't necessarily want to repeal only that section if it means that the rest of the bill would survive. For this cadre it's an all-or-nothing game. Improving the bill is for this group a kiss of near-death since so doing might lessen the drive for total repeal.

The drive for repeal of the 1099 section, however, which would also improve the bill, appears headed for success. The ACA would require all business entities to file 1099 tax forms whenever they buy $600 or more of either goods or services. In the past 1099s were required for purchase of services, e.g., from sole proprietors. This provision applied to services only -- its expansion to goods, e.g., a laptop, was expected to bring in about $20 billion to government. The objections of local doctors' offices, their associations and unions, was joined into heartily by business interests of all kinds. So it looks like Congress agrees and anticipates the signature of President Obama on a repeal bill. Hence, we have a definite crack in the ice. A part of the ACA can be repealed or changed after all. Section 10320 should be next.

Disappointingly, it appears that Budget Chair Paul Ryan has been caught in a statement that would deceive the American voter about Medicare. Ryan announced in the WSJ a plan to provide what he sneakily called "premium support" for Medicare. The idea of "premium support" is to award Medicare recipients a pre-decided amount of money and then let the recipients find and purchase their own health care on the private market. The fiscal motivation is to reduce Medicare inflation. So far, so good. But Ryan couldn't resist saying that "Medicare beneficiaries will be enrolled in the same kind (bold added) of health care program that members of Congress enjoy." False, false, false! The program Members of Congress get pays them a fixed percentage of costs, hence, the amount rises if the costs rise. By contrast, the program for Medicare recipients would award only fixed costs that would not automatically go up if Medicare costs were to rise. The expectation is that Medicare costs would go up and leave the fixed costs mired in the dirt.

Ryan's explanation was either a big mistake or an attempt at deception. In any case, his explanation is wrong and will deservedly cost him credibility.