NCPA - National Center for Policy Analysis

Save Our Seniors by Delaying ObamaCare

September 25, 2012

Regardless of whether they are supporters or opponents of the Affordable Care Act (ACA, or ObamaCare) members of Congress will have to revisit the legislation soon to correct some serious flaws. Here is a revenue neutral approach to begin the necessary corrections: Delay the scheduled cuts in Medicare spending by five years and pay for that expense by delaying the 2014 starting date of ObamaCare by two years, say John C. Goodman, president and CEO, and Devon Herrick, a senior fellow, at the National Center for Policy Analysis.

  • Over the next 10 years, more than half the cost of ObamaCare ($716 billion) is to be paid for by reduced Medicare spending.
  • The Obama administration had hoped to achieve these reductions by 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.

If the necessary savings do not materialize, the Independent Payment Advisory Board, a bureaucracy established by the ACA, has 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. Thus, it is imperative to delay the scheduled Medicare cuts.

There is also a reason to delay the starting date for offering subsidized coverage for uninsured nonseniors through state-run health insurance exchanges: almost no state is ready for the scheduled 2014 opening of the exchanges and a majority have not even tried to get ready.

A two-year delay in implementing coverage expansion provisions would protect seniors for five years from the inevitable rationing that will occur once the cuts to Medicare provider fees take place. In the interim, Congress could consider a slew of reforms that will work -- by empowering patients, freeing doctors and allowing competition in the market place. The net effect of both measures on the deficit would be a small surplus of $16 billion over 10 years.

Bottom line: Delaying the start of these two major provisions will protect seniors, save taxpayers money and allow lawmakers time to enact health reforms that actually work.

Source: John C. Goodman and Devon Herrick, "Save Our Seniors by Delaying ObamaCare," National Center for Policy Analysis, September 2012.


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