Obama Defends Proposed Health Office

[clear eye]

Source: NY Times

In draft legislation sent to Congress on July 17, the president proposed creation of an “independent Medicare advisory council,” which could set payment policies for Medicare, subject to approval by the president. The administration could put the policies into effect unless they were blocked within 30 days by Congress.


...Influential House Democrats oppose Mr. Obama’s call for a Medicare council. Representatives Charles B. Rangel of New York, chairman of the Ways and Means Committee, and Pete Stark of California, chairman of the panel’s health subcommittee, say Congress has a duty to set Medicare payment policy. And they worry that a future Republican president could use the council as a tool to make deep, damaging cuts in Medicare.



Read more: http://www.nytimes.com/2009/07/26/us/26radio.html

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Although the thrust of the NY Times article is the Congressional Budget Office's report that the proposed Executive Branch "Council" would not create enough or even any savings, DUers should be aware that if passed, the proposal gives any administration enough power to gut Medicare. The draft gives the "Council" regulatory authority over anything that could be called "cost-cutting", not only payment rates.

According to the letter accompanying the draft sent by Peter Orzag to Pelosi, it appears that Orzag drafted the Act and Pres. Obama "expressed his openness" to it. Under it, both Houses of Congress cede all authority to regulate Medicare to an Executive Branch "Council" of members appointed by the President and confirmed by the Senate with undefined, therefore unlimited powers over Medicare. It doesn't say whether the members can be dismissed by the President, or whether they remain as long as the President is in office unless they step down. The members of the Council would only have to be considered health care experts, which would allow stacking it with members of the private health insurance industry and pharmaceutical industry or other opponents of the current Medicare, if an Administration wished.

Medicare has remained the relatively complete, effective program for all retired people that it has, because it is so popular that elected members of Congress don't dare slash it. If this bill becomes law, Congress could reasonably say to distraught retirees that the cuts were out of their hands, and that it was the doing of this Council which they couldn't control.

According to Medicare Update, the way it would work is that every year on Dec. 1st (except for a few matters that follow the fiscal year), the "Council" would present its changes to Medicare to the President and Congress. Neither the President nor Congress would be able to amend the proposals or accept some and reject others. The measures would become official regulations unless a)the President vetoed the entire package w/i 30 days, or Congress dropped everything else it was doing over the holidays and both Houses passed a joint Resolution rejecting the package by Dec. 30th.

The draft even rejects judicial recourse:

"...a person adversely affected by the Council's approved recommendations would have to file an action in the U.S. Court of Appeals for the District of Columbia within 30 days of the President's approval.

However, the scope of the review would be limited to whether the Council's recommendation exceeded the scope of the Council's authority for determining annual payment updates or making reforms. No other judicial review of the recommendations of the Council, or of the President's approval or disapproval of recommendations, would be available."

As the Act doesn't limit the Council's authority other than to say that the measures have to have been made to cut costs, it's hard to see how any suit could succeed. Also the majority of people affected by a measure will not be aware of it until after the 30 days.

Some of the potential "cost-saving" measures that could conceivably be enacted by the Council:

1) The addition of means-testing, so that only people below a certain income threshold could be covered, forcing the rest into private plans.
2) Combining it with Medicaid with Medicaid's limited providers, clinics, long waits, and substandard facilities.
3) Draconian cuts of covered procedures, so that Medigap policies would have to become virtually complete catastrophic health insurance policies. Working class people who paid a lifetime into Medicare and couldn't afford enough add'l coverage would be given only palliative care if Medicare no longer covered the needed treatment.

Part of Orzag's motive for the creation of this formula might be to make Medicare as reviled as any dysfunctional welfare program can get, instead of the model for single-payer it now is. When all gov't financed health plans become disasters it would be exceedingly hard to sell single-payer to the public.

As far as I know, the Orzag's draft legislation is not yet a bill in the House, but something very similar has been proposed by Sen. Rockefeller and co-sponsored by Sen. Whitehouse entitled S.1110, and is in the Senate Finance Committee. Please, please call your members of Congress today to say you oppose Congress turning over the authority to regulate Medicare to an unaccountable outside agency.