Medicare Costs Too Much and They Better Not Cut It

http://www.huffingtonpost.com/dean-baker/medicare-costs-too-much-a_b_1363673.html

Dean Baker

Co-Director of CEPR; Author, 'The End of Loser Liberalism: Making Markets Progressive'

Posted: 03/19/2012 12:53 pm

There is an old story about two men in a retirement home. The first declares, "the food in this place is poison." His friend agrees and adds, "and the portions are so small." This exchange perfectly captures the Republican approach to Medicare.

The Republicans, led by House Budget Committee Chairman Paul Ryan, have argued that Medicare threatens to bankrupt the country. They have pointed to cost projections showing the program more than doubling relative to the size of the economy over the next three decades. The Republicans say that the country cannot afford this expense and scream about huge debt burdens for our children.

The Republicans' concern might lead people to believe that they would support measures to contain Medicare costs. But if you thought that was the case, you would be wrong.

The latest Republican crusade on Medicare is to eliminate the Independent Payment Advisory Board (IPAB), which was put in place as part of the health care reform bill passed two years ago. IPAB is empowered to impose a cap on Medicare spending if it grows too fast relative to the size of economy. The way it would reduce cost growth is by reducing or eliminating payments for medicines and procedures that have not been shown to be effective.

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