Mitt Romney’s pick of Congressman Paul Ryan as his running mate has elevated the Medicare plans of both Congressman Ryan and President Obama to the national stage. Both men have taken solid positions on the government health insurance program. Many Democratic House candidates had been trying to tie their Republican opponents to Ryan’s plan for Medicare long before Romney made his selection. Also, the Obama campaign had been trying to link Romney’s endorsement of Ryan’s budget to Ryan’s plan for Medicare as far back as April. Since 50 million Americans are currently receiving benefits from the program, the debate over Medicare’s future is not likely to subside anytime soon. As Bob Schieffer predicted this week:
“Once Mitt Romney put Paul Ryan on the ticket, admit it, we will finally have a campaign about two competing visions for the country, a campaign about substance.”
However, this prediction has yet to materialize. The Romney and Obama campaigns have both traded blows over each other’s plans for Medicare in the last few days. Both Romney and Obama are trying to portray themselves as the protectors of Medicare. To this end, Romney has been pursuing a false line of attack against President Obama: Mitt Romney will protect Medicare for future generations. Consider this ad launched by the Romney campaign this week:
First, I’ll provide a quick overview of Medicare. According to PBS Online News Hour:
“The two parts of traditional Medicare are funded in very different ways. Part A, which covers in-patient hospital bills, is financed by a trust fund known as the Hospital Insurance Fund (HI Fund).
The 1.45 percent that the government deducts from your paycheck — and also from your employer — is placed in the HI Fund to cover Part A services. This payroll tax provides the bulk of the money that flows into the HI Fund; that money is in turn used to cover Part A expenses.
Part B, which covers doctor appointments, is run by a separate trust fund, called the Supplemental Medical Insurance Trust Fund (SMI Fund). Enrollee premiums and funds from the general budget supply the SMI Fund, which then pays for Part B services.
The SMI Fund’s premiums and federal tax revenues are adjusted annually to cover the cost of Part B benefits; therefore, the fund cannot be overdrawn. Payments into the HI Fund, by contrast, are based on the number of workers paying into the system and are not adjusted each year, so the fund can become insolvent. HI Fund trustees meet annually to predict the fund’s solvency.”
Medicare is currently running a surplus, meaning that it is taking in more in tax revenue than it is paying out in expenditures. Changes to the projected surplus can occur during periods of economic decline, when the amount of taxes that Medicare collects decrease and the amount that it pays out increases. The Medicare trust fund is money that was collected for Medicare but never spent.
When Medicare becomes insolvent (that is, when it starts paying out more money than it takes in), the trust fund can continue funding Medicare for another twelve years, thanks to the Affordable Care Act. President Obama’s signature legislation cut $716 billion from Medicare over the next ten years. Most of these cuts are in the form of tax credits and subsidies to insurance companies and providers (there are about a dozen other miscellaneous cuts from other groups, such as home health care workers). The Washington Post has a great chart on the Affordable Care Act’s cuts to Medicare:
There is one important fact worth noting: President Obama’s health care law does not take a cent from current Medicare beneficiaries. The law trims future growth in Medicare’s expenses by reducing the amount of money the program pays out to hospitals and insurance companies. By doing this, the law adds eight years of solvency to Medicare. According to Secretary of Health and Human Services Kathleen Sebelius:
“The Obama Administration has already taken steps to strengthen and extend the solvency of Medicare, implementing policies including those in the Affordable Care Act that will save nearly $120 billion for Medicare over the next five years. Thanks to these essential reforms, today’s report found that the Medicare Hospital Insurance (HI) Trust Fund will remain solvent until 2024 and the actuarial deficit has fallen by 80 percent of taxable payroll since 2009, the year before the Affordable Care Act was passed. Over the next 75 years, Medicare’s Hospital Insurance costs are projected to be about 25 percent lower due to the new law.
And without the historic deficit reduction in the Affordable Care Act, Medicare would have gone bankrupt in 2016 – only five years from now.”
Paul Ryan would keep the cuts to Medicare under the Affordable Care Act in place. However, Romney has vowed to repeal the law. Ryan says that the cuts would go towards shoring up Medicare and reducing the deficit. Since the Ryan plan would not touch Medicare benefits, the effect the cuts would have on the deficit are negligible.
One thing is worth pointing out here. Several of Ryan’s previous budgets would have cut Medicare benefits. Also, they would have killed Social Security. Ryan was forced to abandon these ideas because they were not acceptable for most of his fellow Republicans, let alone majorities in both chambers of Congress. Keeping Social Security is the Republican Party’s idea of a compromise. When Republicans attack President Obama for not being bi-partisan, it is because he wants to preserve Medicare, Social Security, and balance our budget. President Obama won’t kill Social Security, Medicare, or continue to spend more on defense.
If Mitt Romney were to repeal the health care law, Medicare would go bankrupt eight years earlier than is currently predicted. Even though the Romney/Ryan plan does not cut from Medicare benefits, it would kill Medicare eight years before it is set to otherwise go bankrupt. In other words, the Romney/Ryan plan would take Medicare away from its current beneficiaries eight years before they are currently set to lose it. The Romney/Ryan plan would kill Medicare to protect the private insurance companies from the costs of the free-market competition they would face from the health insurance exchanges, as well as to protect them from the requirement that 85% of the benefits they receive go toward their customers’ health care or be refunded – a measures that has already produced $1.3 Billion in rebates to consumers.
Mitt Romney is trying to portray President Obama as a threat to Medicare for two reasons. First, the Romney/Ryan plan would end Medicare as we know it. If this election were held on the facts, Romney would lose. The Romney campaign doesn’t think it can win if the public understands what the Romney/Ryan plan would mean for Medicare. Second, if Obama doesn’t debunk this lie, it will become true. Any false assertion turns into a truth if it is repeated enough times. In other words, Romney could be wrong and win this election if Obama doesn’t make sure that the public understands his plan. This is exactly why we at Veracity Stew do our job. We want to make sure that you, our readers, are informed. No matter which side you might take on any issue that you will be voting on in November, the truth is the truth.
What does it say about the character of Mitt Romney and Paul Ryan if both of them are comfortable lying to you about their own plan for Medicare?
|Show Your Progressive Side and Support Grassroots Blogging
Full Selection of Election Season Goodies: