GOP outlines proposal for replacing Obamacare
Republican plan also includes sweeping changes to Medicare
Washington—The 2016 Medicare trustees’ recent report that the Medicare trust fund will reach insolvency by 2028 is providing fodder for congressional Republicans who are pushing a plan to replace Obamacare, including numerous proposals that would dramatically change Medicare.
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The 2028 date prediction is 2 years earlier than previously outlined in two previous reports, but is 2 years later than the timeline released by the Congressional Budget Office in January, which estimated insolvency in 2026. Decreased payroll taxes and a slower-than-expected decrease in inpatient utilization resulted in moving the date up from 2030, according to Andy Slavitt, acting administrator of the Centers for Medicare & Medicaid Services (CMS).
Medicare spending growth projected at 6.9%
Per-enrollee Medicare spending growth has averaged 1.4% over the last 5 years, slower than GDP per capita growth of 2.9% and overall health expenditures per capita growth of 3.4%. However, total Medicare spending growth is projected at 6.9% average annual rate over the next decade, driven by continued growth of the over-65 population.
The Medicare trustees noted that the cost of prescription drugs paid by Medicare continues to outpace growth in other Medicare costs and overall health expenditures. Medicare Part D spending per enrollee is estimated to increase by an average of 5.8 % annually through 2025, nearly 50% higher than the estimated increase in GDP per capita during that period.
The trustees’ report did not account for possible action by a yet-to-be-appointed Independent Payment Advisory Board (IPAB), established by Obamacare, that could force provider payment and other policy changes if Medicare spending rises beyond targets. Trustees said the trigger point for the IPAB could be reached in 2017.
Physicians’ groups, including the AUA, have beseeched Congress to eliminate the IPAB, charging that it would be composed of unelected individuals whose decisions would directly affect their members, but would be very difficult to overturn. The IPAB provision was included in the Affordable Care Act (Obamacare) as a means of addressing Medicare’s worsening financial health by containing costs.