Who’s Raiding Medicare? Hint: It’s Not Obama

Jonathan Cohn/The New Republic

Have you seen Mitt Romney’s new ad on Medicare? The video is below. The script goes like this:

You paid in to Medicare for years. Every paycheck. Now, when you need it, Obama has cut $716 billion from Medicare. Why? To pay for Obamacare. So now the money you paid for your guaranteed health care is going to a massive new government program that’s not for you. The Romney-Ryan plan protects Medicare benefits for today’s seniors and strengthens the plan for the next generation.

It’s not very subtle. And it’s not very true.

By now, you should know all about the hypocrisy of Romney attacking Obama for cutting Medicare. Paul Ryan put the same cuts in his budget plan. And while Romney has insisted he’d restore them, his budget doesn't have room for that. If he’s serious about his overall spending plan, then he’d surely have to cut Medicare by as much as Obama did. In fact, he’d probably have to cut it by even more. And that's just in the first ten years.

Still, the power of this ad is the appeal to senior citizens: Obama is taking your money and giving it somebody else. That’s why Romney and his allies keep saying that Obama “raided” Medicare. But, under the Affordable Care Act, a chunk of the money that comes out of Medicare goes right back into it. It helps seniors pay for prescription drugs, filling in the donut hole from Medicare Part D. It also allows seniors to get preventative care without co-pays, which means they can get an annual wellness visit, cancer screenings, and the like with no out-of-pocket costs. In the first half of this year, according to the Department of Health and Human Services, more than a million seniors have saved an average of $629 on their drug bills because of this assistance.

Have you seen Mitt Romney’s new ad on Medicare? The video is below. The script goes like this:

You paid in to Medicare for years. Every paycheck. Now, when you need it, Obama has cut $716 billion from Medicare. Why? To pay for Obamacare. So now the money you paid for your guaranteed health care is going to a massive new government program that’s not for you. The Romney-Ryan plan protects Medicare benefits for today’s seniors and strengthens the plan for the next generation.

It’s not very subtle. And it’s not very true.

By now, you should know all about the hypocrisy of Romney attacking Obama for cutting Medicare. Paul Ryan put the same cuts in his budget plan. And while Romney has insisted he’d restore them, his budget doesn't have room for that. If he’s serious about his overall spending plan, then he’d surely have to cut Medicare by as much as Obama did. In fact, he’d probably have to cut it by even more. And that's just in the first ten years.

Still, the power of this ad is the appeal to senior citizens: Obama is taking your money and giving it somebody else. That’s why Romney and his allies keep saying that Obama “raided” Medicare. But, under the Affordable Care Act, a chunk of the money that comes out of Medicare goes right back into it. It helps seniors pay for prescription drugs, filling in the donut hole from Medicare Part D. It also allows seniors to get preventative care without co-pays, which means they can get an annual wellness visit, cancer screenings, and the like with no out-of-pocket costs. In the first half of this year, according to the Department of Health and Human Services, more than a million seniors have saved an average of $629 on their drug bills because of this assistance.

True, the majority of the money that the Affordable Care Act takes from Medicare doesn’t go directly to seniors. Instead, it goes to help non-elderly Americans get health insurance, either by enrolling in Medicaid or receiving tax credits to help pay for private insurance. The ad implies that transferring money in this way is wrong, but keep in mind that the money coming out of Medicare isn’t coming out of benefits. It’s primarily coming out of payments to health insurers and the rest of the health care industry, both of whom should be able to absorb it. (The government had been paying the insurers too much, according to multiple, independent analysis; cutting their subsidies was basically the same as cutting corporate welfare. The rest of the health care industry agreed to the cuts, in part because helping more people get insurance would create more paying customers for them.)

Maybe you think those trade-offs are fair and worthwhile. Maybe you don’t. But compare it to what Ryan and Romney have in mind. Ryan, again, has the same cuts in his budget. But he would rescind both the prescription drug assistance and the free preventative care. In other words, unlike Obama, Ryan would take benefits away from current retirees. And where would the money go? Ryan would  it to offset other priorities in his budget, priorities that happen to include a very large tax cut for the rich. 

So just to review:

Obama takes money away from the health care industry and uses it to help people pay their medical bills. Some of those people include seniors already getting help with their drug bills and free preventative care.

Ryan and, by implication, Romney takes the same money from the health care industry. But they also take away those new benefits for seniors, even as they find room in their tight budgets to cut taxes for the wealthy.

Like I said before, if somebody here is raiding Medicare, it’s not Obama.

If Republicans want to have a real debate about Medicare's future, they're welcome to argue that more competition will better hold down costs, that seniors really crave a much more competitive market, or that payment reforms to providers are likely to cause access problems. Those arguments don't persuade me, but at least they are defensible.

Better still, Republicans can make the honest case for their Medicare scheme—that a rock-solid guarantee of health benefits to seniors is not a commitment the country can afford to make anymore, so it's best to move to a system that limits the taxpayers' liability, even if that means the guarantee ends. I disagree with that, too, but it's ultimately an argument about values and priorities.

But this business about "raiding" Medicare? It's a naked appeal to selfishness and brazen misrepresentation of reality.

Update: Greg Sargent interviewed Rep. Chris Van Hollen, who said that Democrats are preparing to go on the offensive over higher costs for current retirees. It's about time.

Mitt Romney said Barack Obama robs Medicare of more than $700 billion to pay for Obamacare

From Politifact:

Medicare is a hot topic in the presidential race since Mitt Romney picked U.S. Rep. Paul Ryan to be his running mate.

Ryan, R-Wis., is the head of the Budget Committee in the U.S. House of Representatives and the architect of a plan to dramatically restructure Medicare.

Ryan’s plan is for people who are under age 55 now. It would give them voucher-like credits to buy traditional fee-for-service Medicare or competing private insurance plans. (The credits are sometimes called "premium support.")

Though House Republicans voted overwhelmingly for Ryan’s plan, pollingshows public opinion is mixed, and Democrats have vigorously attacked the proposal as a voucher plan and worse. The Romney campaign, meanwhile, refutes those charges by saying President Barack Obama has targeted Medicare himself.

Here’s how Romney put it in an interview with 60 Minutes shortly after selecting Ryan:

"There's only one president that I know of in history that robbed Medicare, $716 billion to pay for a new risky program of his own that we call Obamacare."

Here, we’re checking whether Obama "robbed" Medicare of $716 billion dollars to pay for Obamacare.

$700 billion from Medicare?

The claim that Obama cut $700 billion out of Medicare is relatively new. Not long ago, the oft-cited number was $500 billion. How did he manage to cut another $200 billion when no one was looking?

First things first: Neither Obama nor his health care law literally cut a dollar amount from the Medicare program’s budget.

Rather, the health care law instituted a number of changes to try to bring down future health care costs in the program. At the time the law was passed, those reductions amounted to $500 billion over the next 10 years.

What kind of spending reductions are we talking about? They were mainly aimed at insurance companies and hospitals, not beneficiaries. The law makes significant reductions to Medicare Advantage, a subset of Medicare plans run by private insurers. Medicare Advantage was started under President George W. Bush, and the idea was that competition among the private insurers would reduce costs. But in recent years the plans have actually cost more than traditional Medicare. So the health care law scales back the payments to private insurers.

Hospitals, too, will be paid less if they have too many re-admissions, or if they fail to meet other new benchmarks for patient care.

Obama and fellow Democrats say the intention is to protect beneficiaries' coverage while forcing health care providers to become more efficient.

Under the new law, the overall Medicare budget is projected to go up for the foreseeable future. The health care law tries to limit that growth, making it less than it would have been without the law, but not reducing its overall budget. So claims that Obama would "cut" Medicare need more explanation to be fully accurate. In the past, we’ve rated similar statements Half True or Mostly False, depending on the wording and context.

Because Medicare spending gets bigger every year, the cost-saving mechanisms in the health care law also get bigger. Also, it takes a few years for the health care law’s savings mechanisms to kick in. In fact, the effects of time are the main reason the $500 billion number has turned into $700 billion.

The CBO determined in 2011 that the federal health care law would reduce Medicare outlays by $507 billion between 2012 and 2021. In a more recent estimate released this year, the CBO looked at the years 2013 to 2022 and determined the health care law affected Medicare outlays by $716 billion.

So it’s timing that’s making the cuts bigger, not changes to Medicare.

Historic steal for ‘Obamacare’?

Now, to address the word "robbed." We know the civility is at a low ebb these days, but we think it’s worth pointing out that the money was not robbed in any literal sense of the word.

Congress passed the law through its normal process, and the proposal was debated out in the open during the many weeks that the final law was being negotiated.

At the time the health care law was being finalized and passed, Democrats said it was important to them that the new law not add to the deficit. So the reductions in Medicare spending were counted against the health care law’s new spending. That spending is primarily to cover the uninsured, by giving them tax credits to buy private insurance. But some new spending increases Medicare coverage for prescription drugs for seniors.

Finally, Romney said Obama is the "only one president that I know of in history that robbed Medicare." In reality, several presidents have reduced Medicare spending.

We reviewed this history in detail in a fact-check of Romney’s statement from December, "Only one president has ever cut Medicare for seniors in this country . . . Barack Obama." We rated that False. Many presidents have sought to rein in Medicare spending.

Here are a few highlights from that fact-check:

• President Ronald Reagan cut Medicare by reducing payments to hospitals, and he cut benefits by raising deductibles.
  
• President George H.W. Bush cut benefits by repealing a law that would have expanded coverage for drugs and catastrophic illness.
  
• President Bill Clinton cut Medicare by changing payments to doctors and other providers, which could be considered to have an indirect effect on beneficiaries.

Our ruling
Romney said, "There's only one president that I know of in history that robbed Medicare, $716 billion to pay for a new risky program of his own that we call Obamacare."

The only element of truth here is that the health care law seeks to reduce future Medicare spending, and the tally of those cost reductions over the next 10 years is $716 billion. The money wasn’t "robbed," however, and other presidents have made similar reductions to the Medicare program.

We rate this statement Mostly False.

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?”

Obama fires back at Romney's medicare plan

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Ryan budget plan makes changes to Medicare

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Indiana Will Enforce Illegal Law To Defund Planned Parenthood, May Lose All Medicaid Funds

By Tanya Somanader

In the race to be the first, the Indiana GOP plowed through common sense and internal opposition to pass a law stripping Planned Parenthood of public funding. When signing the bill, Indiana Gov. Mitch Daniels (R) said non-abortion services would “remain readily available” from other providers. In reality, by signing the law, Daniels jeopardized federal funding for all family planning and health care providers and, as a result, access to health care for thousands of low-income Hoosiers.

Because the law bans Planned Parenthood from receiving Medicaid funds in Indiana, it violatesa federal law that prevents any state from denying payment to health care clinics that provide a “constitutionally protected service.” Finding Indiana in blatant violation of this law, the U.S Centers for Medicare & Medicaid Services Administrator Don Berwick rejected the law and notified the state that it may lose “all federal funding of its Medicaid program.” But rather than reconsider the drastic move, Indiana will “defy” CMS and continue to implement the law:

Indiana plans to defy an Obama administration letter and continue barring Planned Parenthood from receiving federal funding — a move that, if continued, could cost the state more than $4 billion in Medicaid funds. [...]

The Indiana Family and Social Services Administration plans to continue implementing the legislation, signed by Gov. Mitch Daniels last month, that defunded Planned Parenthood.

“For now, our lawyers advise us that we must continue to follow the law the Indiana General Assembly passed,” says Marcus Barlow, director of communications for FSSA. “We will seek guidance from the attorney general on how to proceed going forward.”

A CMS source told Politico that “the entirety of Indiana’s federal Medicaid funding” is at stake should they violate federal law. Last year, Indiana received $4.3 billion in federal funding which “accounts for about two-thirds of the state’s $5.9 billion Medicaid budget.” About $3 million of that funding goes to Indiana’s 28 Planned Parenthood clinics, which, according to Planned Parenthood of Indiana, served about 9,300 low-income patients last year. Of these clinics, only four provide abortion services. What’s more, only 3 percent of their services involve abortions. In going to such an extreme to prohibit one group’s rare practice of a constitutionally protected service, Indiana is imperiling the health care of a great number of Hoosiers to make a political point.

Of course, for many in the GOP, the evisceration of Medicaid seems to be an end goal. At the beginning of this year, GOP governors sought leeway to cut down on their Medicaid rollsthrough exemption from the health care reform law. House Budget Chairman Paul Ryan’s (R-WI) budget plan seemed to deliver by turning Medicaid into a block grant program, effectively allowing states to cut eligibility and provide less coverage. Idaho Gov. Butch Otter (R) took matters into his own hands and signed an executive order in April that will essentially end Medicaid in his state.

But, as Planned Parenthood President Cecile Richards notes, CMS’s rebuke “serves as a warningto other states” considering a similar ploy with Medicaid. While Kansas, North Carolina, andTexas are toying with similar legislation, Tennessee has already “backed off attempts to defund Planned Parenthood specifically because of concerns over constitutionality.”

Gov. Christie Thinks A Family Making $6,000 A Year Is Too Rich To Qualify For Medicaid

By Marie Diamond

Despite recent polls that show Americans are just as protective of Medicaid as they are of Medicare, New Jersey Gov. Chris Christie (R) is trying to gut the popular program in his state and prevent 23,000people from receiving benefits. Christie has proposedcutting Medicaid eligibility to absurdly low levels: from the current maximum income of $24,645 to $5,317 a year for a family of three. Apparently, the governor believes a family of three making $6,000 a year is simply too rich to receive Medicaid.

The New Jersey press has reported that the main effect of his proposal would be to slash help for the working poor, tearing a huge hole in the state’s social safety net:

Adults in a family of three that makes as little as $103 a week would earn too much to qualify for health care provided by Medicaid under a sharply curtailed program Gov. Chris Christie wants the federal government to approve this year, according to state officials and advocates briefed on the proposal.[...]

The Christie administration is expected to propose cutting the maximum income level of Medicaid from $24,645 to $5,317 a year for a family of three [...]

“That is about a third of the poverty level,” Castro said. “That means that an uninsured parent working full time at a minimum-wage job wouldn’t be eligible. … A parent who works half-time for minimum wage wouldn’t even qualify.

“Unfortunately, the only way these parents can become eligible for health coverage in the future is if the parent applies for and is eligible for welfare,” Castro added. “That sends the wrong message.”

Democratic lawmakers are furious that Christie is insisting on making $300 million in cuts on the backs of poor and disabled residents. They point out that apart from the morally bankrupt idea of denying care to the neediest population, having more people uninsured will ultimately be more costly for New Jersey.

“Those 23,000 people are going to get sick this year,” said Louis Greenwald (D), a committee chairman. “Where are you suggesting they’re going to go?”

State Sen. Joseph Vitale (D), who sponsored the legislation creating FamilyCare in 1998,explained, “This completely dismantles the progress made over the last 12 years, and then some…I can’t imagine how it could be any worse.”

Since Medicaid — which provides health care services to at-risk populations including the indigent, blind and disabled — is jointly funded by the federal government, states must apply for a waiver before making major changes. That means Obama administration officials can still block Christie’s radical attempts to curtail enrollment.

House Republicans Pass Plan To Phase Out Medicare, Slash Medicaid

Brian Beutler

House Republicans voted Friday in favor of a vision of the future without Medicare, with a significantly eroded Medicaid, and with lower taxes on wealthy Americans. By a vote of 235-193, they passed their budget resolution -- an opening bid in a broader partisan fight about spending and taxes that will dominate politics in Washington, DC for the rest of the year.

Four Republicans voted with all Democrats against the so-called "Path to Prosperity." Two Republicans and five Democratsdidn't vote.

It's also political poison. The GOP plan would slowly phase out the current Medicare system and replace it by offering beneficiaries partially subsidized private insurance (ironically, much like Obamacare). It would turn Medicaid into a block-grant program, allowing states to roll back currently guaranteed benefits for the poor and disabled. And it would eliminate most of the savings achieved from cutting these entitlements lowering the tax burden on wealthy Americans.

It was almost worse. Earlier in the day, Republicans fell prey to a Democratic procedural tactic and nearly voted to replace the plan they passed with an even farther-reaching one. Republicans didn't whip any of the alternative budgets, and were caught flat-footed when Democrats voted "present" on a more conservative proposal, leading to pandemonium on the House floor.

As an early salvo in his re-election fight, President Obama criticized Republicans for creating the looming fiscal crisis with reckless policies in the last decade, and for proposing to fix it on the backs of the most vulnerable Americans

"We contribute to programs like Medicare and Social Security, which guarantee us health care and a measure of basic income after a lifetime of hard work; unemployment insurance, which protects us against unexpected job loss; and Medicaid, which provides care for millions of seniors in nursing homes, poor children, those with disabilities. We're a better country because of these commitments," Obama said. "I'll go further. We would not be a great country without those commitments."

Though the budget has no future in the Senate, House Republicans have put themselves on the line for a political whipping as severe the one they received when they tried to privatize Social Security in 2005.

House Republicans propose deep cuts to Medicare

By Sahil Kapur

WASHINGTON – House Republicans will Tuesday unveil a long-term budget plan that essentially privatizes Medicare, a move that is sure to draw ire from progressives on Capitol Hill.

The proposal, authored by House Budget Committee Chairman Paul Ryan (R-WI), aims to cut $4 trillion in federal spending over ten years, in part by ending Medicare as we know it for Americans who are currently under the age of 55.

Those nearing retirement within the next 10 years will be covered by single-payer program, which pays the medical expenses of seniors. The rest would have to choose from a series of private insurance plans to cover them when they turn 65, according to previews of the proposal. The federal government would pay roughly the first $15,000 in costs; after that, they're on their own.

"There is nobody saying that Medicare can stay in its current path," Ryan said on Fox News Sunday. "We should not be measuring ourselves against some mythical future of Medicare that isn't sustainable."

The proposal also cuts Medicaid, which helps pay health care expenses for low-income Americans. Currently a joint program run by the federal government and states, the Ryan plan would turn it into a series of block grants for states, considerably reducing benefits.

House progressives declined to comment on the plan as it had not been officially unveiled, but it's certain to bring about a rancorous debate over whether to balance the budget by cutting into the safety net. Though both parties agree that health care costs are a major driver of federal spending, liberals have argued that seniors and low-income people should not have to pick up the tab for a deficit caused largely by tax cuts, two unfunded wars and a recession.

A new NBC/Wall Street Journal poll found Monday that 76 percent of Americans consider it unacceptable to cut Medicare, while 67 oppose cutting Medicaid, despite their deficit concerns.