Medicare: Truth Behind the `Cuts’

Photograph by Jim Weber/The Commercial Appeal/Landov

Elderly Memphians gather up pamphlets and contact information before a town hall meeting set up by State Senator Jim Kyle. The meeting was organized to help connect seniors with various state organizations that can help answer questions about Medicare, senior center programs, and other retirement concerns.

The fundraising committee charged with electing Republicans to the U.S. House plans to campaign against reductions in Medicare costs for which most of their members voted.

“We want this fight,” said Mike Shields, political director for the National Republican Congressional Committee, in a memo released today. “Any opportunity we have to talk about Obamacare, and the $700 billion in Medicare cuts that paid for it, is an opportunity that we will never pass up. Democrats are asking us for it.”

Mitt Romney, the presumptive Republican presidential nominee, accused President Barack Obama of cutting Medicare today as he campaigned in Florida.  Romney’s running mate, Rep. Paul Ryan of Wisconsin, is chairman of the House Budget Committee.

Ryan has “come up with ideas that are very different than the president’s,” Romney told voters at a rally at Flagler College in St. Augustine. “The president’s idea, for instance, for Medicare was to cut it by $700 billion. That’s not the right answer. We want to make sure that we preserve and protect Medicare.”

The 2010 Patient Protection and Affordable Care Act that Obama pushed for doesn’t cut Medicare; it simply reduces projected future increases in costs by $700 billion over 10 years. “The cuts don’t come from the current Medicare budget, they put a leash on future growth and payment increases,” according to the Tampa Bay Times’ fact-checking site, Politifact.

Those savings are accomplished partially by reducing payments to private insurance companies that offer a package of benefits known as Medicare Advantage. Those programs are more expensive than traditional Medicare, thus driving up costs to taxpayers.

By cutting the private subsidies, the health-care legislation covers more of the cost of prescription drugs for the elderly and funds preventative services with no co-payments. The reduction in the growth of Medicare also would help pay for other parts of the legislation, which would extend insurance coverage to 30 million Americans.

Those same reductions in the future growth of Medicare are contained in the budget bills sponsored by Ryan and approved by the same House Republicans who now say they’ll campaign against the provision. Romney has endorsed the Ryan plan.

The difference is the savings in the Republican bill don’t go to help seniors with their prescription drug costs. In fact, Ryan’s legislation increases the amount senior citizens will have to pay for drugs since it repeals the health-care legislation that provides the extra subsidy.

Ryan’s budget bill also would end traditional Medicare by capping spending and offer vouchers to buy private insurance.

“Romney’s and Ryan’s claim that they want to protect Medicare is a big lie,” said Ethan Rome, executive director of Health Care for America Now, an advocacy group that backs the Obama-backed health-care law. “Obamacare saves money by eliminating waste, fraud and abuse in the Medicare program while giving seniors even more benefits than before. The Romney-Ryan budget would steal those savings in order to give more tax breaks to the super-rich.”

 Bloomberg’s Julie Hirschfeld Davis contributed from St. Augustine.


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