Two things about the Affordable Care Act (ObamaCare) are increasingly clear: (1) seniors have been singled out and forced to bear a disproportionate share of the cost of a new entitlement for young people and (2) the states are administratively just not ready to implement the new program in time for its January 1, 2014, start date.
So here's a simple proposal that will not affect the federal deficit: Delay the scheduled cuts in Medicare spending by five years and pay for that expense by delaying the 2014 start date of ObamaCare by two years.
That would give everyone time to find a better way to reform the health care system. It would also impact this fall's election. Every member of Congress would be asked to vote up or down on a single question: Who do you care more about: senior citizens or ObamaCare?
Over the next 10 years, ObamaCare will reduce Medicare spending by $716 billion. The Obama administration had hoped to achieve these spending reductions through increased efficiency, based on the results of pilot projects and demonstration programs. The problem: the Congressional Budget Office (CBO) has said in three consecutive reports that these projects are not working as planned and are unlikely to save money. As a fallback device, the health reform law set up a bureaucracy, the Independent Payment Advisory Board (IPAB), that will have the power to reduce doctor and hospital fees to such an extent that access to care for the elderly and disabled will be severely impaired.
In fact, the Medicare actuaries tell us that squeezing the providers in this way will put one-in-seven hospitals out of business in the next eight years, as Medicare fees fall below Medicaid's. Harvard health economist Joseph Newhouse predicts senior citizens may be forced to seek care at community health centers and in the emergency rooms of safety net hospitals, just as Medicaid recipients do today.
Consider people reaching age 65 this year. Under ObamaCare, the average amount spent on these enrollees over the remainder of their lives will fall by about $36,000 at today's prices. That sum of money is equivalent to about three years of benefits. For 55 year olds, the spending decrease is about $62,000 — or the equivalent of six years of benefits. For 45 year olds, the loss is more than $105,000, or nine years of benefits.
John C. Goodman is President of the Goodman Institute and a Senior Fellow at The Independent Institute. He is the 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.”