Two Questions I’d Like Answers To

I’m seeing people make what appear to me to be mistakes or false assumptions in two areas. It is, however, possible I’ve missed something important, so maybe someone can tell me if I have.

Issue 1: Under Mitt Romney’s vision for Medicare, what happens if Medicare spending growth hits the (GDP+0.5%) growth cap? As best I can tell, the answer to this is, “We don’t know.” It is, by the way, not true that we don’t know what would happen if President Obama’s identical cap binds. What would happen in that case is that the IPAB would be obligated to submit a payment reform proposal to Congress. Congress would have to adopt the IPAB’s proposal or enact a different one that achieves the same savings. The IPAB’s proposal would have to adhere to its charter, namely it could not cut benefits or increase beneficiary out-of-pocket costs. The law says it cannot ration care. (Interpret as you see fit.) Providers would be dealt the blow.

But, back to my question. Would Mitt Romney target providers if program spending grew too quickly? Or would he target beneficiaries? As far as I know, he has not yet answered, leaving many to speculate it’s the latter on the logic that he rejects Obamacare’s means of Medicare cost control.

Issue 2: How are payments to doctors being cut by Obamacare? As best I can tell, they are not. To be sure, Obamacare cuts payments to hospitals and other non-physician providers, but it doesn’t seem to me that it targets doctors. Yes, the SGR cut are aimed right at doctors, but those are not due to Obamacare, despite how some like to blur the lines on that. We have a near-annual opportunity to reform the SGR, with another chance coming January 1st. If we’re worried about cuts to doctors, we could put the Obamacare debate aside for a moment and work on how to reform the SGR.

Am I missing something?

[Cross-posted at The Incidental Economist]

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Austin Frakt

Austin Frakt is a health economist and an assistant professor at Boston University's School of Medicine and School of Public Health. He blogs at The Incidental Economist.