More on the Medicare Dust-Up

August 15th, 2012 at 10:26 pm

UPDATE: Nice AP story out this AM on these very points.  Basically, what’s happening here is that the ACA Medicare cuts improve the efficiency and cut costs in the program solely on the delivery side (not on beneficiaries), thus extending the lifespan of the HI trust fund.  So, when Gov Romney says he won’t make those cuts, though he’s probably thinking, “this will protect seniors from Obama’s cuts,” what actually happens is seniors lose benefits they’re already enjoying from the ACA (e.g., wellness visits, drug costs in the donut hole) and the life of the trust fund is reduced by eight years.


A rousing segment tonight on MSNBC with Rev Al Sharpton and Ana Marie Cox on this whole Medicare dust up.

The facts of the case:  with Rep Ryan on the ticket, and Gov Romney having endorsed Ryan’s budget—now the House R’s budget—there’s been a lot of confusion generated by the $700 billion in cuts that both the President and Rep Ryan have in their budgets.  I’ve written about this as have others: see here and here.

The numbers may be the same, but in the segment, I discuss the important differences in how the savings are derived and how they’re used.  In the Affordable Care Act, they’re derived from seeking efficiencies in way health care is delivered, and they’re used to provide health care to beneficiaries of Medicare and Medicaid.

In the Ryan budget, they’re at least partly used to pay for tax cuts weighted toward wealthy households.

A new fact in the case:  it appears that Gov. Romney is now saying he won’t make these cuts, suggesting he does not now endorse the Ryan budget.  What this means for Medicare is actually less important than the fact that a) he wants to repeal the ACA, which in and of itself weakens Medicare, and b) the Medicare cuts implied by Gov Romney’s budget already go deeper than the savings generated by the ACA, as we point out in this CBPP analysis.

But here’s the thing.  Republicans and other alleged chicken budget hawks are constantly complaining that the President is failing to lead on fiscal issues because he refuses to tackle the entitlement “crisis.”   Then, a sentence or two later, the nail him for cutting $700 billion from Medicare!

Even putting aside the fact that the vast majority of House R’s have consistently voted for those same cuts, it takes some chutzpah for zapping the President for not cutting…and for cutting.

More to come as this evolves…or devolves…in the coming days.

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5 comments in reply to "More on the Medicare Dust-Up"

  1. davesnyd says:

    Thanks; I was thinking yesterday that this had been underexplained in the media.

    But unless I’ve misunderstood– isn’t the Ryan plan *worse* even than you’re describing?

    The President’s $700M cuts come from bending the curve– reducing the rate of growth. But don’t Ryan’s come from transferring the cost of each senior’s Medicare from the government to the individual via vouchers that are designed to not keep up with the cost of the program?

    So the President’s “cuts” aren’t– they are a slowing of growth. But Ryan’s “cuts” are real cuts: someone else has to pay for them.

    • Jared Bernstein says:

      Well, Ryan does nothing to fundamental Mcare for 10 years except repeal ACA–which has significant impacts. But as I pointed out on the Rev’s show, you’re right re shifting the costs to beneficiaries by vouchers that fail to keep pace with health costs. On the other hand, they both cut the growth and I think it’s fair to call those “cuts.”

      See the update I’m about to post…

    • John Nail says:

      The other salient point here is on the Ryan Budget cutting Medicaid 30% and block granting it. 6 million seniors rely on Medicaid for nursing home payments and that is about 1/4 of all Medicaid spending.

      So Romney Ryan actually cut benefits immediately for current seniors by ending Obamacare thus eliminating the preventative care benefit that 16M used so far this year, stop closing the RX donut hole which saved seniors $4B already in 2012, and by cutting Medicaid endanger the welfare of 6 million seniors in nursing homes.

      Then by changing the Medicare eligibility age to 67 they throw tens of billions of dollars onto the private sector/corporate healthcare costs for the 2 year gap between 65-67.

      Ending Obamacare also would end the efforts to catch Medicare fraud which in 2 years has netted over $7B, more than all prior efforts combined over the prior decade.

      All this before even getting to the voucherizing in 10 years.

      Ending the 700B in cost reductions makes Medicare insolvent in 2016 vs. 2024 and the long term impact of those costs not being out of the system are in the hundreds of billions as the cost curve is not bent at all.

      • Mike says:

        But the Ryan budget doesn’t actually remove those costs cuts, does it? I’ve read that they’re part of Ryan’s budget in addition to the benefit cuts he proposed.

        Have I misread? I mean, I saw it on the internet so it has to be true.

  2. Greg Levy says:

    I heard an interesting piece on NPR regarding Medicare Fraud investigations and how provisions and support in the ACA actually strengthen and modernize compliance and fraud prevention. They pointed out that the “savings” in fraud prevention and prosecution (estimated at $65B per year of fraudulent paymnets) could possibly offset the amount of money invested in the new measures. Is that worth talking about on your blog?

    I appreciate all you do – in making the wonky stuff available and understandable for the “rest” of us. ;o)