How Mitt Romney Would Quickly Bankrupt Medicare

By Igor Volsky/Think Progress

Despite endorsing Paul Ryan’s proposal to maintain Obamacare’s $716 billion in Medicare cuts and reduce overall Medicare spending from 7 percent of GDP to 3.5 percent by 2023, Mitt Romney has announced that he would restore the ACA’s reductions — and avoid future Medicare reductions.

“My commitment is, if I become President, I’m going to restore that $716 billion to the Medicare trust fund so that current seniors can know that the trust fund is not being raided and get Medicare on track to be solvent long-term on a permanent basis,” Romney told CBS on Wednesday morning. But in replenishing the funds, Romney would actually be making the program worse off, not better.

The Obamacare savings slow the growth of Medicare over the next decade by, in part: eliminating overpayments to private insurers in Medicare Advantage, reforming provider payments to encourage greater efficiency, tying reimbursements to improvements in economic productivity, and reducing fraud and abuse. The law does not impact patient benefits. CMSoffers a partial breakdown:

As a result of these savings, “growth in spending will be restrained” and the life of the Medicare trust fund is expanded by eight years, the government estimates. Sixteen millionseniors are also benefiting from the savings by receiving preventive benefits without deductibles or co-pays and saving more than $3.9 billion on prescription drugs.

Should Romney restore the $716 billion — and unless he institutes other yet to be specified reforms — we would move back to the old system of overpaying private insurers and providers. He’d be re-inserting inefficiency back into the system, jeopardizing the benefits that seniors are currently enjoying, and shrinking the solvency of the Medicare trust fund from 2024 under current law to 2016.

“All of the demonstration and pilot programs aimed at payment and delivery system reform would also be eliminated,” Steve Zuckerman of the Urban Institute told ThinkProgress. “Definitely, the 8 year extension in the life of the Medicare HI trust fund would be gone.”

He added, “If I could ask Romney-Ryan one question on this topic it would be: After you repeal the ACA and restore the cuts in Medicare payments, would you then reinstate the Medicare cuts as part of your own budget plan?”