John C. Goodman

Both parties are being disingenuous about Medicare reform. So let me be the first to open Pandora's box and reveal three unpleasant truths.

First, health care spending is growing at twice the rate of growth of our income — clearly an unsustainable and undesirable spending path.

Second, any plan to reduce the growth rate of federal spending on health care without doing something about health care spending as a whole will necessarily shift costs — to the elderly, to the poor, to state governments, and to anybody other than the federal government.

Third, neither party is offering a serious plan to control health care spending as a whole.

Let's start with President Obama, since his plan is already law. The administration calls it the Patient Protection and Affordable Care Act (PPACA). Other people call it ObamaCare. Whatever you call it, if you are confused about what it means, that's understandable.

The numbers you see in newspapers are almost always produced by the Congressional Budget Office (CBO), the bean-counting agency of Congress. These forecasts show a dramatic slowing of Medicare spending — about in line with the recommendations of the President's debt commission and with such independent reform proposals as the one made by Rep. Paul Ryan (R- WI) and former CBO director Alice Rivlin.

If you are elderly or disabled, however, pay attention to a more ominous document — the Medicare Trustees report, released last summer. Unlike the CBO's pronouncements, this report is an executive branch document that reflects the administration's view of its own health reform. (Three cabinet secretaries — labor, health and human services, and treasury — are Medicare trustees.)

According to the Medicare Trustees report, ObamaCare will cut the rate of growth of Medicare spending in half and allow it to grow no faster than our national income. The Office of the Medicare Actuaries has released a separate document, explaining what this means:

• By the end of this decade, the fees Medicare pays to doctors will be lower than what Medicaid pays. Seniors will become less desirable as patients than welfare mothers.

• By the end of the decade, one in seven hospitals will be forced to leave the Medicare system.


John C. Goodman

John C. Goodman is Senior Fellow at The Independent Institute and author of the widely acclaimed book, Priceless: Curing the Healthcare Crisis. The Wall Street Journal and National Journal, among other media, have called him the "Father of Health Savings Accounts."