Affordable Care Act Savings Do Not ‘Cut’ Medicare Benefits

PolitiFact: Affordable Care Act Does Not Cut Medicare’s Budget, It Attempts To Reduce Future Costs. According to PolitiFact, “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.” [PolitiFact, 8/15/12]

Medicare Spending Reductions “Aimed At Insurance Companies And Hospitals, Not Beneficiaries.” According to PolitiFact: “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.” [PolitiFact, 8/15/12]

• 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]

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]

“Going Bankrupt”? 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]

Romney Supports Medicare Vouchers That Would Increase Costs

Romney Favors “Premium Support” Model For Medicare. According to Mitt Romney’s campaign website, Romney “proposes that tomorrow’s Medicare should give beneficiaries a generous defined contribution, or ‘premium support,’ and allow them to choose between private plans and traditional Medicare. […] Instead of paying providers directly for medical services, the government’s role will be to help future seniors pay for an insurance option that provides coverage at least as good as today’s Medicare, and to offer traditional Medicare as one of the insurance options that seniors can choose.” [MittRomney.com, accessed 10/25/12]

Kaiser Family Foundation Study: 25 Million Seniors Would Face Higher Costs Under “Premium Support” Plan. According to Kaiser Health News: “The type of proposal championed by Republicans to overhaul Medicare by giving beneficiaries a fixed amount of money to purchase insurance could lead to significant increases in premium costs in some parts of the country, according to a new study. If the plan had been in place in 2010, six in 10 Medicare beneficiaries—about 25 million people both in traditional Medicare and in private Medicare Advantage plans —would have faced higher premiums if they didn’t switch to a cheaper plan, according to researchers at the Kaiser Family Foundation.” [Kaiser Health News, 10/15/12]

Romney’s Plan Would Increase Prescription Drug Costs And Reduce Access To Preventive Services, Even For Current Seniors

Mitt Romney Pledges To Repeal The Affordable Care Act. According to Mitt Romney’s campaign website: “On his first day in office, Mitt Romney will issue an executive order that paves the way for the federal government to issue Obamacare waivers to all fifty states. He will then work with Congress to repeal the full legislation as quickly as possible.” [MittRomney.com, accessed 10/25/12]

The Affordable Care Act Closes The Prescription Drug “Donut Hole.” According to CNN: “What’s the donut hole? In addition to a $310 deductible, Medicare beneficiaries pay 25% of their drug costs until the total reaches $2,830 for the year. Then, they fall into a coverage gap. At that point, enrollees must pay all costs out of pocket until their annual expenses exceed $6,440. After that, seniors pay 5% of drug costs for the rest of the year.” The Kaiser Family Foundation explains how the Affordable Care Act closes the donut hole:

• In 2010, Part D enrollees with spending in the coverage gap will receive a $250 rebate.
• Beginning in 2011, Part D enrollees who reach the coverage gap will receive a 50 percent discount on the total cost of their brand-name drugs in the gap, as agreed to by pharmaceutical manufacturers.
• Over time, Medicare will gradually phase in additional subsidies in the coverage gap for brand-name drugs (beginning in 2013) and generic drugs (beginning in 2011), reducing the beneficiary coinsurance rate in the gap from 100 percent to 25 percent by 2020. [CNNMoney, 6/7/10; KFF.org, March 2010]

• 5.2 Million People Would Have To Pay More For Prescription Drugs If The Affordable Care Act Is Repealed. From the Centers for Medicare and Medicaid: “As a result of the Affordable Care Act, over 5.2 million seniors and people with disabilities have saved over $3.9 billion on prescription drugs since the law was enacted.  The Centers for Medicare & Medicaid Services (CMS) also released data today showing that in the first half of 2012, over 1 million people with Medicare saved a total of $687 million on prescription drugs in ‘donut hole’ coverage gap for an average of $629 in savings this year. […] Coverage for both brand name and generic drugs in the gap will continue to increase over time until 2020, when the coverage gap will be closed.” [CMS.gov, 7/25/12]

Medicare Beneficiaries Receive Free Preventive Services, Annual Wellness Visits Under Health Care Law. As Kaiser Health News reported: “[T]he new health-care law will make it easier and cheaper for seniors to get preventive care. Medicare beneficiaries will be able to receive for free all preventive services and screenings that receive an A or B recommendation for seniors from the U.S. Preventive Services Task Force. That includes mammograms and colorectal cancer screening, bone mass measurement and nutritional counseling for people at risk for diet-related chronic diseases such as diabetes. Medicare beneficiaries will also get a free annual wellness visit under the new law. The visit will cover a number of services, including a health risk assessment and a review of the person’s functional and cognitive abilities. […] Currently, seniors in traditional Medicare pay 20 percent of the cost for most covered preventive services. [KaiserHealthNews.org, 8/10/10]

• Over 35 Million Seniors Would Lose Access To Free Preventive Services. The Centers for Medicare and Medicaid Services [CMS] report that 35,106,598 people were enrolled in Medicare Part B in 2011. CMS also reports: “Beginning January 1, 2011, the Affordable Care Act eliminated Part B coinsurance and deductibles for recommended preventive services, including many cancer screenings and key immunizations. The law also added an important new service — an Annual Wellness Visit with a health professional — at no cost to beneficiaries. According to preliminary numbers, at least 25,720,996 million Americans took advantage of at least one free preventive benefit in Medicare in 2011, including the new Annual Wellness Visit.  This represents 73.3% of Medicare fee-for-service beneficiaries, including 2,404,792 African-American beneficiaries, 537,110 Hispanic beneficiaries, 104,393 American Indian beneficiaries, and 508,398 Asian-American beneficiaries.” [CMS.gov, 2/15/12]