Medicare rationing? An election-year House vote

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By RICARDO ALONSO-ZALDIVAR, Associated Press

WASHINGTON (AP) — House Republicans resurrected the specter of Medicare rationing Thursday in an election-year vote to repeal cost controls in President Barack Obama's health care overhaul.

In the GOP crosshairs is a board that has yet to be named but would be empowered to force cuts to drug companies, insurers and other service providers if Medicare spending balloons. A Republican plan announced this week, laying down a dividing line between the parties, also would limit Medicare cost increases, but it would rely on competition among private insurance plans.

GOP lawmakers are hoping their symbolic 223-181 vote on Thursday to repeal the Independent Payment Advisory Board will help persuade seniors that Republicans, not Democrats, are the best stewards of Medicare.

The bill is likely to hit a dead end in the Senate. House Republicans all but guaranteed that when they paired the board repeal with caps on medical malpractice awards, which most Democrats oppose. The White House has issued a veto threat.

If it all sounds like a debate among Washington insiders, Rep. Jack Kingston, R-Ga., says he will have no trouble explaining to constituents why he voted to repeal the cost-cutting board.

"Do you remember death panels?" said Kingston, referring to the debunked accusation by former GOP vice presidential candidate Sarah Palin that Obama's health care law would allow the government to withhold life-saving care from the elderly.

"It's not necessarily a death panel, but it is a rationing panel and rationing does lead to scarcity for some," he added. "Who's going to get the needed treatment, an 85-year-old or the 40-year-old with children?"

The health care law explicitly bars the board from rationing care, shifting costs to Medicare recipients or cutting their benefits. But critics say squeezing service providers will stifle medical innovation, achieving a similar result.

Many House Democrats also oppose the board — dubbed IPAB for its initials — but for different reasons. They feel it diminishes the role of Congress. But Republicans made it difficult to attract Democratic votes for repeal by adding other politically charged provisions to their bill.

"Republicans don't want to see IPAB repealed now because they want to run against it," said Scott Gottlieb, a former senior FDA official in the George W. Bush administration. "I think there will be an effort to repeal it after the election."

The House vote came a day before the second anniversary of the health care law, and just ahead of next week's Supreme Court deliberations on its constitutionality. Politics aside, the vote highlighted major differences between the parties on Medicare, the giant health care program for nearly 50 million seniors and disabled people.

All sides agree that Medicare as currently structured will not be able to pay its bills in the long run. The main options to control costs are unpalatable: tax increases, benefit cuts and cost shifts to middle- and upper-income retirees.

Most Republicans and Democrats also agree now that there has to be a limit on future Medicare increases. The question is how.

Republicans would convert Medicare into a system dominated by private health insurance plans closely regulated by the government. Future retirees would get a fixed payment to buy either private coverage or sign up for a new government plan modeled on traditional Medicare. The plan counts on competition among the plans to help keep costs in check, but the annual government payment would also be limited by tying it to economic growth.

That's the basic approach embodied in the new budget released this week by Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee, and seconded by GOP presidential candidate Mitt Romney.

Theoretically, such a system could help rein in Medicare cost increases, economists say. The question is whether it would be politically acceptable to seniors and future generations, with polls indicating that the public is resistant to major changes. Recognizing the sensitivity, Ryan's plan would exempt anyone now 55 or older.

Obama and the Democrats would take a different approach to cost control, and that's where the IPAB board comes in.

IPAB (pronounced EYE-pab) has the power to force payment cuts to service providers if costs rise beyond certain levels and Congress fails to substitute its own plan for savings. But the law explicitly forbids the board from rationing care, shifting costs to seniors, or cutting their benefits. The Democrats would put the burden on service providers, such as drug companies, insurers and eventually, hospitals.

Obama has yet to name anyone to the panel, whose 15 members would have to be confirmed by the Senate. Government economists are forecasting a period of manageable Medicare costs, meaning that IPAB's services may not be needed until sometime around the end of the decade.

Democrats say they'd rather defend IPAB before older voters — and attack the GOP's Medicare overhaul.

"The rationing is in the Republican plan," said Rep. Chris Van Hollen, D-Md., the ranking Democrat on the budget committee. "What they do is allow insurance companies to ration people's health care."

The nonpartisan Congressional Budget Office said this week that both Obama's health care law and the new Ryan plan could potentially create access-to-care problems for Medicare recipients. The CBO cautioned that those could turn out to be greater under the GOP approach, which would squeeze Medicare growth harder. Republicans say that won't happen because competition among health plans will keep costs down by reducing waste.

The House bill is likely to hit a dead end in the Senate. The White House issued a veto threat against it earlier this week. House Republicans all but guaranteed that when they paired by IPAB repeal with caps on medical malpractice awards, which most Democrats oppose.

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