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Making Medicare Stronger

February 29, 2012 at 6:00 AM ET by Nancy-Ann DeParle

Summary:

Under health reform, we will reward doctors and hospitals that focus on spending time with patients, that better coordinate care, and that improve the quality of care patients are receiving while lowering costs

Over the past few years, health care cost increases have been slowing – both for Medicare and private health care. And both CBO and Medicare estimate that cost increases are slowing. Despite these encouraging trends, there is much more we need to do – both to reduce costs and strengthen the Medicare program for future generations and to improve health care quality so patients get the best care possible.

Achieving these goals takes serious work. That’s why the Affordable Care Act is designed to learn from the best health systems and experts in the country to find better ways to improve health care. Under health reform, we will reward doctors and hospitals that focus on spending time with patients, that better coordinate care, and that improve the quality of care patients are receiving while lowering costs.

Health reform also establishes the Independent Payment Advisory Board (IPAB). IPAB will be composed of fifteen experts including doctors, consumers and patient advocates who will be recommended by Congressional leaders, nominated by the President, and confirmed by the Senate. It will recommend policies to Congress to help Medicare provide better care at lower costs. Congress could pass these or other changes to strengthen Medicare. Starting in 2015, if Medicare cost growth per beneficiary exceeds a growth rate target, IPAB recommendations would take effect only if Congress fails to act.

Today, Congressional Republicans are working to repeal and dismantle the Independent Advisory Board before it even gets started even though experts like former Bush Administration Medicare Official Mark McClellan called for “[strengthening] and [clarifying] the authority and capacity of the Independent Payment Advisory Board (IPAB).” And a coalition of economists including Nobel Prize Winners said “…the Affordable Care Act contains essentially every cost-containment provision policy analysts have considered effective in reducing the rate of medical spending. These provisions include…An Independent Payment Advisory Board with authority to make recommendations to reduce cost growth and improve quality within both Medicare and the health system as a whole”

At the same time, House Republicans passed a plan for Medicare last year that does nothing to reduce overall health care costs. Instead, the Republican plan shifts costs to seniors and empowers insurance companies. Below is a table on how the Republican plan and IPAB compare.

Rather than revisiting the past and trying to repeal the Affordable Care Act, Congress should work on strengthening Medicare and creating jobs.

	Republican Medicare Plan	IPAB
Ration Care?	Yes. Under the Republican plan, nothing would prevent private insurance companies from rationing care.	No. IPAB is legally prohibited from making recommendations that would ration health care.
Increase premiums and cost sharing?	Yes. Under the Republican plan, administrative costs and health care prices would rise, and seniors would pay about $6,400 more per year for their health care coverage, according to the non-partisan Congressional Budget Office (CBO).	No. IPAB is legally forbidden from modifying Medicare premiums or cost sharing.
Control Costs?	No. Under the Republican plan, administrative costs and health care prices would rise according to the CBO.	Yes. IPAB would lower Medicare costs, premiums, and cost sharing according to CBO. Former CBO Director Robert Reischauer called IPAB a “big deal” that “could generate substantial savings.” Hundreds of prominent economists, including three Nobel Laureates, agree that IPAB is an important component of the Affordable Care Act that will slow health care cost growth.
Who is in Charge?	Insurance companies. The Republican plan ends Medicare as we know it and repeals the Affordable Care Act, giving free rein to insurance companies to decide what care you get and when, with no clear limits to protect consumers or prevent insurance companies from taking in exorbitant profits.	You and your doctor. IPAB strengthens traditional Medicare, making it sustainable for doctors, patients and taxpayers.
Protects Your Guaranteed Medicare Benefits?	No. The Republican plan would eliminate Medicare’s guaranteed benefits and limits on cost sharing and premiums. Instead, insurance companies would determine which benefits seniors on Medicare would receive and how much they pay.	Yes. IPAB is legally prohibited from cutting benefits or increasing premiums and co-payments. And it builds on the health law’s coverage of preventive benefits and closing of the drug donut hole.