Affordable Care Act Savings Do Not ‘Cut’ Medicare Benefits

Affordable Care Act Reduces Future Medicare Spending, But “Does Not Cut That Money From The Program.” According to PolitiFact: “The legislation aims to slow projected spending on Medicare by more than $500 billion over a 10-year period, but it does not cut that money from the program. Medicare spending will increase over that time frame.”  [PolitiFact.com, 6/28/12]

• CBO’s July Estimate Updates Medicare Cost Savings To $716 Billion. According to the Congressional Budget Office’s analysis of a bill to repeal the Affordable Care Act, repeal would have the following effects on Medicare spending: “Spending for Medicare would increase by an estimated $716 billion over that 2013–2022 period. Federal spending for Medicaid and CHIP would  increase by about $25 billion from repealing the noncoverage provisions of the ACA, and direct spending for other programs would decrease by about $30 billion, CBO estimates. Within Medicare, net increases in spending for the services covered by Part A (Hospital Insurance) and Part B (Medical Insurance) would total $517 billion and $247 billion, respectively. Those increases would be partially offset by a $48 billion reduction in net spending for Part D.” [CBO.gov, 8/13/12]

Affordable Care Act Improves Medicare’s Finances

“The Medicare Trust Fund Will Last Eight Years Longer” Thanks To Health Care Law. The Huffington Post reported: “The Medicare trust fund will last eight years longer than it would have without the passage of last year’s health care law, the program’s trustees announced Friday in a report. The nonpartisan lead actuary for Medicare, Rick Foster, estimated that without the health care overhaul, the program’s trust fund would have run dry by 2016. With the law in effect, Foster projected, the trust fund will last through 2024.” [Huffington Post, 5/13/11]

Repealing ACA’s Medicare Savings “Would Hasten The Insolvency Of Medicare By Eight Years.” According to the New York Times: “Mitt Romney’s promise to restore $716 billion that he says President Obama ‘robbed’ from Medicare has some health care experts puzzled, and not just because his running mate, Representative Paul D. Ryan, included the same savings in his House budgets. The 2010 health care law cut Medicare reimbursements to hospitals and insurers, not benefits for older Americans, by that amount over the coming decade. But repealing the savings, policy analysts say, would hasten the insolvency of Medicare by eight years — to 2016, the final year of the next presidential term, from 2024. While Republicans have raised legitimate questions about the long-term feasibility of the reimbursement cuts, analysts say, to restore them in the short term would immediately add hundreds of dollars a year to out-of-pocket Medicare expenses for beneficiaries. That would violate Mr. Romney’s vow that neither current beneficiaries nor Americans within 10 years of eligibility would be affected by his proposal to shift Medicare to a voucherlike system in which recipients are given a lump sum to buy coverage from competing insurers.” [New York Times, 8/21/12]

Rep. Cravaack Voted To Keep The Same “700 Billion” In Medicare Savings

GOP Plan Kept Most Of The Savings In The Affordable Care Act. According to the Washington Post’s Glenn Kessler: “First of all, under the health care bill, Medicare spending continues to go up year after year. The health care bill tries to identify ways to save money, and so the $500 billion figure comes from the difference over 10 years between anticipated Medicare spending (what is known as ‘the baseline’) and the changes the law makes to reduce spending. […] The savings actually are wrung from health-care providers, not Medicare beneficiaries. These spending reductions presumably would be a good thing, since virtually everyone agrees that Medicare spending is out of control. In the House Republican budget, lawmakers repealed the Obama health care law but retained all but $10 billion of the nearly  $500 billion in Medicare savings, suggesting the actual policies enacted to achieve these spending reductions were not that objectionable to GOP lawmakers.” [WashingtonPost.com, 6/15/11, emphasis added]

• Rep. Cravaack Voted To Keep The ACA’s Medicare Savings. Along with 234 other House Republicans, Rep. Chip Cravaack voted “yea” on the House Republican budget. [H.Con. Res. 34, Vote #277, 4/15/11]

2011 Plan Cravaack Voted For Would “Essentially End” Medicare

Ryan Plan Transforms Medicare Into A “Premium Support System.” According to the Kaiser Family Foundation’s overview of the Ryan plan: “The proposal would gradually transform Medicare into what is described as a ‘premium support system.’  Beginning in 2022, all newly-eligible Medicare beneficiaries (i.e., individuals turning 65 as well as younger, disabled individuals becoming eligible for Medicare) would only have access to health coverage through private insurance plans, rather than through the current government-run Medicare program (i.e., traditional Medicare), or under a Medicare Advantage plan.  Under the new premium support system, Medicare beneficiaries would be entitled to a payment from the federal government to help defray premiums and other health care costs under the plan.  The government would make payments directly to private health plans on behalf of Medicare eligible enrollees, rather than pay hospitals, physicians, and other medical providers directly for the services provided to their Medicare-eligible patients, as is currently the case.   If the government payments to plans on behalf of enrollees were insufficient to cover premiums and/or other costs, beneficiaries would be responsible for additional costs.  In other words, Medicare would no longer provide coverage for medical care, but instead provide a ‘subsidy’ toward the purchase of a private health insurance plan.” [Kaiser Family Foundation, April 2011, emphasis added]

• WSJ: “The Plan Would Essentially End Medicare.” From the Wall Street Journal: “The plan would essentially end Medicare, which now pays most of the health-care bills for 48 million elderly and disabled Americans, as a program that directly pays those bills. Mr. Ryan and other conservatives say this is necessary because of the program’s soaring costs. […] Mr. Ryan’s proposal would apply to those currently under the age of 55, and for those Americans would convert Medicare into a ‘premium support’ system.” [Wall Street Journal, 4/4/11]

• National Review Writer: “It’s Fair…To Say It Ends The Program.” Writing for the conservative National Review Online, Robert VerBruggen declared, “I support Paul Ryan’s Medicare reforms.” He added: “The Ryan plan is a deep, serious reform — it ends some of the program’s major features, and if traditional-Medicare supporters see those features as the core of the program, it’s fair for them to say it ends the program.” [National Review Online, 12/20/11, emphasis added]

National Journal: “It’s Not True” That Ryan Plan Would Not Affect Current Seniors. As National Journal reported: “Republicans are convinced that burnishing the public’s view of their unpopular proposal to overhaul Medicare depends on assuring today’s seniors that they won’t be affected. […]There’s only one problem with the strategy: It’s not true.” [National Journal, 6/2/11]

Nolan Supported Universal Health Care Plan – Akin To Medicare For All – In 1970s, When Many In Congress Pressed Universal Coverage Models

The AAN ad cites Rick Nolan’s support for the “Kennedy-Corman bill” in the 1970s, and quotes the words “Medicare eliminated” from a 1976 Economist article.

The Economist Article Cited In Ad Explains That Kennedy-Corman Bill Would Have Replaced Medicare With Universal Health Coverage. From the 1976 Economist article cited by AAN: “The Kennedy-Corman bill would have 90% of all health costs met through a federal trust fund, with about half of the money coming from payroll taxes (mainly on employers) and the other half from general federal revenues. Everyone would be covered by the same plan, with Medicare eliminated and Medicaid retained only in a supplementary role. Fees for services would disappear. Doctors, hospitals and other providers of care would be paid according to the numbers of patients they serve. Patients would not have to pay any part of the charge, as they are required to do under most other schemes in order to keep down costs.” [The Economist via Nexis, 1/3/76]

Policy Expert: “Though It Is Difficult For Many To Remember, The Striking Feature Of The 1970-74 Years Was The Intense Competition Among Proponents Of Different Forms Of Universal Health Insurance.” From “The Politics of U.S. Health System Reform,” a 2005 conference paper by public policy expert Dr. Theodore Marmor: “By 1970, the topic of health reform had shifted back from Medicare to national health insurance once again. Though it is difficult for many to remember, the striking feature of the 1970–74 years was the intense competition among proponents of different forms of universal health insurance.” [Marmor, “The Politics of U.S. Health System Reform,” via Bos.FRB.org, 2005]

Kennedy-Corman Bill “Closely Exemplified Canada’s National Program” For Universal Health Care At A Time Of “Negative Consensus” About Existing Health Care Policy. From “The Politics of U.S. Health System Reform,” a 2005 conference paper by public policy expert Dr. Theodore Marmor:

In addition to the catastrophic proposal that Senators Long and Ribicoff advocated, there was also the Kennedy-Corman bill that so closely exemplified Canada’s national program as of 1971. And there was the Nixon Administration’s plan to mandate health insurance for employed Americans known then as the “Comprehensive Health Insurance Plan,” or “CHIP.”

The lessons of this period are surely relevant to American circumstances today. Reform failed because shifting coalitions defeated every attempt at compromise—“cycling negative majorities,” we might say in political science jargon. The majority that agreed on the need for reform consisted of factions committed to different proposals. The more modest proposals—like the Long-Ribicoff catastrophic bill—seemed too limited to those who wanted to translate the negative consensus into broad, universal coverage. The proposal for employer-mandated insurance—similar in financing to what President Clinton later proposed—seemed too indirect, incomplete, and incapable of cost control to those favoring more straightforward forms of national health insurance. And even Senator Kennedy, who moved from the more ambitious version of national health insurance (the Kennedy-Corman bill) to a compromise plan that he and the powerful Wilbur Mills could accept, was incapable of generating majority support among a coalition of liberal and conservative Democrats. [Marmor, “The Politics of U.S. Health System Reform,” via Bos.FRB.org, 2005]