The Devil is ALWAYS in the Details

Archived Messages From the President

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April 14th, 2011

The President presented the administration’s budget yesterday and my biggest problem with it was the addition of more cuts to Medicare and Medicaid above the almost 600 billion contained in Obamacare.   But, as always, especially with this administration, the devil is truly in the details. In closely reviewing his remarks, it is clear that   the President made some statements which, even though the words were small in number, would have a huge effect on older Americans. Two of his most onerous statements concerned the Independent Payment Advisory Board (IPAB) and Medicare rebates.

One of the worst parts of the Independent Payment Advisory Board is that it is independent – it is independent of any control by elected representatives, it is appointed by the executive branch and it will last for 10 years or longer. Their job will be to cut benefits to reach an administration-approved level to meet short term monetary goals. They will not look at the huge long term gains obtained by encouraging innovation and research, or the overall returns of preventative care. They won’t look at the personal knowledge a doctor has about each of his or her patients, and they will use the one-size-fits-all “axe” approach to cut costs rather than the more individual and precise “scalpel” approach of your doctor. Do we want to trust a board that has none of the constitutional checks and balances that has served us pretty well for over 200 years? Do we want to trust a board of political appointees to dictate how our doctor treats us? This discussion of IPAB was brought up in a budget presentation to show the American people that the President could save money. The IPAB is about money and how they can cut benefits now. There is bipartisan support for completely disbanding the IPAB and yet the President wants to expand its power so it can cut benefits and use the money to pay for other things. It’s not right and we need to fight it until IPAB is abolished.

The President also talked about using mandatory rebates on Medicare drugs to control prices. This is another instance of the Administration inserting government into a process that is working just fine. The Congressional Budget Office (CBO) current estimate for Medicare Part D is 46% below their initial estimate at the beginning of the program. What other government program has come in UNDER budget? This efficiency has been achieved because it was a public private partnership that used the principles of the free market to control prices. Rebates are already a part of this free market solution and competition has controlled the prices, keeping them almost 50% below the initial estimates. And remember, rebates are price controls, and price controls will kill the innovation we need to develop new cures and therapies to fight Alzheimer’s disease, diabetes, heart disease, cancer, and a host of other illnesses. Why insert government price controls into a system that is working? Eighty-four percent of Part D enrollees are satisfied with their coverage and ninety-five percent say their coverage works for them. As they say, “If it ain’t broke don’t fix it.”

Irresponsible government spending over the years got us into the financial fix that we are in today. Medicare is not the President’s private piggy bank. If there is fraud, waste and inefficiencies in Medicare, then let’s find it, eliminate it and use the money to put Medicare on firmer financial footing or lower Medicare taxes or increase Medicare benefits or encourage the development of new, life-saving medicines. Don’t use Medicare as the President’s ATM to extract money for other government programs or to pay for the irresponsible spending of the past.



Thair Phillips – President