The Blog

Romney Camp Memo Takes on Obama on Medicare

11:24 AM, Aug 18, 2012 • By DANIEL HALPER
Widget tooltip
Single Page Print Larger Text Smaller Text Alerts

President Obama knows exactly what this will mean. In his own words, sharp cuts to the payments that Medicare makes to providers will “jeopardize … our seniors’ health care.” You can watch him explaining at length how reduced Medicare reimbursements will harm seniors in this address from 2010. In that context he was referring to the threat of failing to extend the “Doc Fix” for another year, thereby triggering a 21% cut in payments that would cost approximately $280 billion to avoid over ten years. Obamacare’s $415 billion in cuts over ten years are deeper.

If Medicare refuses to pay for services, seniors will be denied care. Arecent survey by the Physicians’ Foundation indicates that Obamacare will compel more than half of doctors to close or significantly restrict their practices for Medicare patients. Additionally, the government estimatesthat 15 percent of hospitals, skilled nursing facilities, and home health agencies will begin losing money and have to consider cutting off Medicare patients from care.

These are the largest cuts, but the President ignores them when describing how Obamacare affects Medicare. They begin in 2013, affecting today’s seniors immediately.

The Second Source Of Cuts Is A $156B Reduction In Funding For Medicare Advantage. Medicare Advantage (MA) allows seniors to use government funding to acquire a private insurance plan, rather than have the government pay for care directly. The popular program currently covers 13 million seniors, or approximately one in every four Medicare enrollees.

President Obama and his campaign have justified his cuts to MA as nothing but a reduction in “insurance company subsidies.” The only problem is that these so-called subsidies are in fact payments for health insurance that today’s seniors rely on. In other words, they are what most Americans would refer to as… Medicare.

The President made a straightforward promise to seniors. “Here's a guarantee that I've made: If you have insurance that you like, then you will be able to keep that insurance. If you've got a doctor that you like, you will be able to keep your doctor.” But the government now reports that, thanks to Obamacare, fully half of the seniors who would use MA will lose access to their plans.

Massive Cuts Are Not Good For Medicare. It is unfortunate that this even needs to be said, but the Obama campaign insists on suggesting that these cuts for today’s seniors are somehow a good thing for Medicare, and that the cuts have extended the program’s life.

This is false, and the Centers for Medicare and Medicaid Services has said so: “financing cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions under the PPACA) and to extend the trust fund, despite the appearance of this result from the respective accounting conventions.” Even President Obama, back before he would say anything to hold on to power, acknowledged as much: “you can’t say that you are saving on Medicare and then spend the money twice.” The $716 billion that Obamacare cuts from Medicare gets spent on expanding Medicaid and subsidizing exchanges. It is gone. Not a dollar of it is left to spend at any point in the future on Medicare.

Recent Blog Posts

The Weekly Standard Archives

Browse 18 Years of the Weekly Standard

Old covers