Paul Ryan puts Medicare reform in play

Paul Ryan holding up ACA alternative plan
Earlier this year, House Speaker Paul Ryan released a plan to repeal and replace the Affordable Care Act.

With Republicans poised to repeal and replace the Affordable Care Act, House Speaker Paul Ryan (R-WI) is pushing to reform Medicare, arguing that the federally run program is “going broke” because of the landmark healthcare law.

Ryan has said repealing and replacing the ACA is a top priority for Republicans that have control of the House and Senate and that any discussions about replacing Obamacare should include Medicare and Medicaid reform. Experts told FierceHealthPayer that repealing the ACA would be complex and costly.

Ryan specifically blamed Independent Payment Advisory Board (IPAB), a program created through the ACA to implement annual Medicare spending cuts starting in 2016. The program has been under attack by Republicans who say it is unconstitutional and provider groups--including the American Medical Association and the American Hospital Association--which backed previous attempts to repeal IPAB.

“What people don’t realize is because of Obamacare, Medicare is going broke; Medicare is going to have price controls,” Ryan said in an interview with Fox News. “Because of Obamacare, Medicaid is in fiscal straits. So you have to deal with those issues if you’re going to repeal and replace Obamacare. Medicare has got some serious problems because of Obamacare, so those things are part of our plan to replace Obamacare.”

Earlier this year, Ryan released a plan to repeal and replace the ACA that includes transitioning Medicare to a premium support model in which beneficiaries would receive subsidies to purchase their own health plan through a Medicare exchange program. Although president-elect Donald Trump has not addressed specific changes to the Medicare program, his transition site says his administration will “modernize Medicare” to prepare for an influx of retirees.

Fact checkers with the Washington Post challenged Ryan’s assertion that Medicare was “going broke,” clarifying the program’s funds would be “depleted”--not insolvent--by 2028, and pointing out that provisions of the ACA strengthened the near-term financial outlook of the program. Although the Congressional Budget Office has questioned Medicare's sustainability amid annual spending increases, the program was expected to be insolvent in 2016 until the ACA changed the formula for annual hospital payment rate increases.