FALSE: “Both Governor Romney and Congressman Ryan attacked the president for allegedly robbing Medicare of $716 billion. That’s the same attack they leveled against the Congress in 2010, and they got a lot of votes on it. But it’s not true.”
The Affordable Care Act did indeed cut Medicare spending by $716 billion, as the Congressional Budget Office wrote in a July 24 report. It does that by reducing payments to Medicare hospitals and doctors, essentially ratcheting down the amount they receive when they see a patient. Here’s how those cuts break down, in graph form:
TRUE: “There were no cuts to benefits at all. None.”
As I’ve written before, this is pretty much how the Affordable Care Act’s Medicare cuts work. You can scour the Affordable Care Act, and you won’t find a single benefit that has been cut out of the program. There is the chance that the cuts to providers could lead to some deterioration in access, but in most cases, it’s remote. The hospital cuts, for instance, were agreed to by the hospital industry.
On the other side of the ledger, the Affordable Care Act actually adds benefits to Medicare: It increases the preventive care available to seniors by adding an annual wellness visit without co-pay as a new service the program covers.
CONFUSING: “What the president did was to save money by taking the recommendations of a commission of professionals to cut unwarranted subsidies to providers and insurance companies that were not making people healthier and were not necessary to get the providers to provide the service.”
Clinton appears to be referring to the Independent Payment Advisory Board, a new panel tasked with helping reduce Medicare costs by advising Congress on how to change provider payments. IPAB does not exist yet – it does not come into being until 2015 – so it couldn’t recommend the rate changes set in the Affordable Care Act. Congress decided how to cut rates in the Affordable Care Act, and it’s rarely a body that gets described as a “commission of professionals.”
In the larger scheme of things, IPAB is actually responsible for a really small part of those $716 billion in savings. It’s estimated to save $23.7 billion over the first decade. That’s not nothing, but it’s a pretty small sliver of the overall Medicare spending reductions in the Affordable Care Act. That’s partly because IPAB isn’t fully empowered until 2018. In the future, IPAB’s role is expected to become more central.
DOUBLE COUNTED: “Instead of raiding Medicare, he used the savings to close the doughnut hole in the Medicare drug program…and to add eight years to the life of the Medicare trust fund so it is solvent till 2024.”
Both of these facts are, independently, true. The health care law did indeed use some of the revenue it generated to pay for seniors who land in the “donut hole,” the gap after normal drug coverage ends and catastrophic coverage kicks in. And it did extend the solvency of the Medicare trust fund by eight more years, until 2024, per a report earlier this year.
But this represents some of the least-liked math in Washington, because it uses a sort of “double counting” of Medicare savings. The Medicare Trust Fund counts the health law’s $716 billion in savings as going back into its coffers. The Congressional Budget Office counts them as paying for provisions in the Affordable Care Act, like closing the donut hole. In reality, it would be very, very hard for a Medicare dollar saved to achieve both these purposes. In fact, it would be impossible.
This accounting isn’t unique to the Affordable Care Act. Budget wonks have regularly used this double counting for Medicare savings generated by Congress. But it is one of the points the Affordable Care Act’s Medicare savings regularly gets attacked.
TRUE: “I didn’t know whether to laugh or cry because that $716 billion is exactly, to the dollar, the same amount of Medicare savings Ryan has in his own budget.”
Rep. Paul Ryan’s most recent budget does indeed include the Affordable Care Act’s $716 billion in Medicare savings. Mitt Romney has, however, disavowed those cuts and promised to restore insurers’ and hospitals’ reimbursement rates as part of his plan to repeal the Affordable Care Act.
FALSE: “So if Romney is elected, and if he does what he promised to do, Medicare will now go broke in 2016.”
Here, Bill Clinton is referring to the Medicare Trustees’ 2012 report, which estimated the Medicare Trust Fund would be exhausted in 2016 without the Affordable Care Act’s changes.
There’s a huge difference, however, between exhausting the Medicare Trust Fund and the program going broke. The trust fund is essentially an accounting mechanism, a balance sheet for what the Medicare program takes in via taxes and premiums and what it spends out on benefits. If Medicare were running short on cash, there’s nothing to stop Congress from chipping in with extra dollars.
To that point, the Congressional Research Service once rounded up previous Medicare Trustees Reports. In 1970, the Medicare Trustees Report predicted the fund would be insolvent just two years later, in 1972. Pretty much every year after that, the Trust Funds’ insolvency has never seemed that far off, as the following chart shows.
FALSE: “Lot of folks don’t know it, but nearly two-thirds of Medicaid is spent on nursing home care for Medicare seniors who are eligible for Medicaid.”
Lots of folks don’t know this fact…because it’s not true. Clinton here is referring to the 9.1 million seniors who are low-income or disabled, making them eligible for both entitlement programs. In health wonk terminology, they’re referred to as the “dual eligibles.”
Dual eligibles certainly cost more than other Medicaid enrollees, like children and pregnant women. But there’s no evidence to support these patients eat up two-thirds of the Medicaid budget. Kaiser Family Foundation looked at this issue in an April 2012 brief. It found, “Although these ‘dual eligibles’ accounted for only 15 percent of Medicaid enrollment in 2008, 39 percent of all Medicaid expenditures for medical services were made on their behalf.”
Here’s where his number probably comes from: Later in the Kaiser brief, it notes that of all the Medicaid dollars spent on dual eligibles, 69 percent were for long term care services. But there’s a big difference between 69 percent of 39 percent of Medicaid spending – and two-thirds of all Medicaid dollars.