Obamacare Doesn't Cut Medicare
Matthew Martin 8/17/2012 03:00:00 PM
First of all, it is false. The claim comes from the fact that the CBO projects that as a result of reforms in medicare reimbursements and other measures designed to lower healthcare costs, the law will result in $716 billion in savings versus what we would otherwise have spent under previous policy. So there are two things to note: (1) nothing in the law mandates that these funds be cut, so if healthcare prices don't fall, then spending won't be reduced by the new policies, and (2) No one will experience a reduction in their Medicare coverage as a result of the policy, whether or not spending actually falls by $716 billion. So there is simply no sense in which it is accurate to say that Obama has cut, or wants to cut, Medicare.
But there is a more important point here, which is that Romney and Ryan are attacking Obama when it is actually their own plan that cuts medicare by $700 billion, even while it increases costs to seniors. How so? Well first of all, Ryan's proposed legislation, which Romney has explicitly said he supports, would turn Medicare as we know it into a voucher-and-mandate program that, instead of paying a flexible amount for senior's healthcare directly, would instead offer only a fixed, lump-sum voucher restricted by a mandate that the voucher be spend on private insurance, and not healthcare. Oh, and by the way, the Romney-Ryan plan to replace Medicare would cut benefits to seniors by $700 billion, even while the Ryan-mandate raises costs on seniors substantially. According to the CBO, the percentage of their healthcare that would be government-funded would fall from the current 80% to just 35% under the Ryan plan.
So both candidates this fall will reduce Medicare spending by $700 billion. The President's plan, already current law, will do this without reducing anyone's benefits by cutting costs. The Ryan plan will do this by cutting benefits while driving up costs.