Did Obama Cut $714 Billion from Medicare?

The claim that OBAMACARE cuts $700 BILLION from Medicare is TRUE and the GOOD NEWS is that in doing so, it INCREASES HEALTHCARE FOR SENIORS and AT THE SAME TIME cuts fraud, WASTE and abuse. The nonpartisan Congressional Budget Office determined that the Medicare provisions in President Obama’s health care law would save $700 BILLION over a decade and EXTENDS THE LIFE OF MEDICARE. Extends it EIGHT YEARS.

Odd that no one hears that part of the story.  Well, not odd but rather that’s what shysters do- shysters like the GOP talking heads.

By the way, that WASTE mentioned above was a 14% surcharge in the pockets of the heath insurance providers- specifically the providers of a Bush-era plan called Medicare Advantage. That plan was supposed to ‘compete’ on the free market and provide competition among the private insurers to reduce costs. But in recent years the plans have actually cost more than traditional Medicare. So the health care law scales back the payments to private insurers.

The ROMNEY-RYAN plan takes $700 BILLION AWAY FROM SENIORS but does NOT use it to fund HEALTH SERVICES for ANYBODY. Yet Republicans in the House voted to strip that $700 Billion FROM SENIORS ENTIRELY. The nonpartisan Congressional Budget Office estimates under the ROMNEY-RYAN plan new Medicare beneficiaries will pay more than $1,200 OUT OF POCKET by 2030 and more than $5,900 more by 2050 and SHIFT ADDITIONAL COSTS to seniors by RAISING  the eligibility age to 67. This NEGATIVELY impacts today’s middle-aged, middle class HARD WORKING Americans while giving the wealthiest 1-percent HUGE TAX BREAKS.

Here’s the full report from Politifact:

Here’s how Romney put it in an interview with 60 Minutes shortly after selecting Ryan:

“There’s only one president that I know of in history that robbed Medicare, $716 billion to pay for a new risky program of his own that we call Obamacare.”

Here, we’re checking whether Obama “robbed” Medicare of $716 billion dollars to pay for Obamacare.

$700 billion from Medicare?

The claim that Obama cut $700 billion out of Medicare is relatively new. Not long ago, the oft-cited number was $500 billion. How did he manage to cut another $200 billion when no one was looking?

First things first: Neither Obama nor his health care law literally cut a dollar amount from the Medicare program’s budget.

Rather, the health care law instituted a number of changes to try to bring down future health care costs in the program. At the time the law was passed, those reductions amounted to $500 billion over the next 10 years.

What kind of spending reductions are we talking about? They were mainly aimed at insurance companies and hospitals, not beneficiaries. The law makes significant reductions to Medicare Advantage, a subset of Medicare plans run by private insurers. Medicare Advantage was started under President George W. Bush, and the idea was that competition among the private insurers would reduce costs. But in recent years the plans have actually cost more than traditional Medicare. So the health care law scales back the payments to private insurers.

Hospitals, too, will be paid less if they have too many re-admissions, or if they fail to meet other new benchmarks for patient care.

Obama and fellow Democrats say the intention is to protect beneficiaries’ coverage while forcing health care providers to become more efficient.

Under the new law, the overall Medicare budget is projected to go up for the foreseeable future. The health care law tries to limit that growth, making it less than it would have been without the law, but not reducing its overall budget. So claims that Obama would “cut” Medicare need more explanation to be fully accurate. In the past, we’ve rated similar statements Half True or Mostly False, depending on the wording and context.

Because Medicare spending gets bigger every year, the cost-saving mechanisms in the health care law also get bigger. Also, it takes a few years for the health care law’s savings mechanisms to kick in. In fact, the effects of time are the main reason the $500 billion number has turned into $700 billion.

The CBO determined in 2011 that the federal health care law would reduce Medicare outlays by $507 billion between 2012 and 2021. In a more recent estimate released this year, the CBO looked at the years 2013 to 2022 and determined the health care law affected Medicare outlays by $716 billion.

So it’s timing that’s making the cuts bigger, not changes to Medicare.

Historic steal for ‘Obamacare’?

Now, to address the word “robbed.” We know the civility is at a low ebb these days, but we think it’s worth pointing out that the money was not robbed in any literal sense of the word.

Congress passed the law through its normal process, and the proposal was debated out in the open during the many weeks that the final law was being negotiated.

At the time the health care law was being finalized and passed, Democrats said it was important to them that the new law not add to the deficit. So the reductions in Medicare spending were counted against the health care law’s new spending. That spending is primarily to cover the uninsured, by giving them tax credits to buy private insurance. But some new spending increases Medicare coverage for prescription drugs for seniors.

Finally, Romney said Obama is the “only one president that I know of in history that robbed Medicare.” In reality, several presidents have reduced Medicare spending.

We reviewed this history in detail in a fact-check of Romney’s statement from December, “Only one president has ever cut Medicare for seniors in this country . . . Barack Obama.” We rated that False. Many presidents have sought to rein in Medicare spending.

Here are a few highlights from that fact-check:

• President Ronald Reagan cut Medicare by reducing payments to hospitals, and he cut benefits by raising deductibles.

• President George H.W. Bush cut benefits by repealing a law that would have expanded coverage for drugs and catastrophic illness.

• President Bill Clinton cut Medicare by changing payments to doctors and other providers, which could be considered to have an indirect effect on beneficiaries.

Our ruling

Romney said, “There’s only one president that I know of in history that robbed Medicare, $716 billion to pay for a new risky program of his own that we call Obamacare.”

The only element of truth here is that the health care law seeks to reduce future Medicare spending, and the tally of those cost reductions over the next 10 years is $716 billion. The money wasn’t “robbed,” however, and other presidents have made similar reductions to the Medicare program.

We rate this statement Mostly False.

So, got the facts?  Spread ’em.


12 thoughts on “Did Obama Cut $714 Billion from Medicare?

  1. I have been working on why Government is under such broad attack. A major reason has been the failure of the Fourth Estate, the Press, to present
    the truths. They capitulate to the person that they are interviewing most
    of the time and hardly ever hit them back with one follow up question after
    another. On the contrary to what we hear and read from the Right, the
    Press is not liberal. But, it’s not the Press anymore. They are celebs interviewing people who are celebs and powerful and understand how their
    bread is buttered…If they ask a tough question, well then they won’t get another interview. We see this with Romney putting out statements that
    the Press cannot ask this or that question. I saw it this morning on Joe
    Scarborough. Grover Nordquist was a guest and Joe has been heard to
    criticize Nordquist for his ridiculous no tax pledge on previous shows
    everything today was just sweet. The Press has sold out the 99%

    1. What would you do if it was either follow the script or someone else (Fox News) gets the interview? My answer would be to pass on the interview because when candidates appear on “legitimate” news shows, it gives them some authenticity.

      But the candidates know you need the news NOW so the press folds.

    1. Me too…..but I guess that’s one more reason we’re not the press.

  2. Well, we are still dry and have electricity…It started raining here yesterday
    about 3pm and at 730am it has never stopped. All schools have been closed
    for two days now, many businesses…..We still have power, but over 700,000 in LA and MS are without….Our danger seems to be power, which is
    what happened with Katrina. BTW, Katrina was 7 years ago yesterday!

    Our winds are around 40mph, and with the continuing rain and the ground getty soggier, fallen trees on power lines is our potential problem. But, it took four days with Katrina to get our power back up.. Interesting cloud
    patterns, M_R, like in various layers and rotating quickly and in bands, and in different shades of gray, black. Oops, weather alert…Heavy squalls
    headed our way, so under flood alert now. We are expecting 3″ by noon, and that is on top of the 4″ we already have….We are OK, as on high ground

  3. Rain stopped around 4pm today, well lets say the constant rain stopped. We
    had over 12 hours to constant raining. Right now at 630 we are in band of blue sky and bright sunshine! The problem only compounds as the storm
    moves up thru Arkansas, Missiouri, Illinois, Indiana, and Ohio which will
    probably bring the Mississippi back up to flood stage in about 2 weeks, so
    the Army Corps is saying. I believe it is to hit the Toledo area on Monday!

    1. I look at it this way: The storm is going to dump a lot of rain over some of the worst drought areas in the Midwest. I know it’s too late for this summer’s crops, but rain in required in the ground for long run crop production. It also dilutes some of the air/water pollution.

  4. It seems to me the reporter for the Washington Post, Ezra Klein, gives the
    good facts on our natural right progams as citizens of the United States.
    He is an analyst for many of the MSNBC programs so you probably will
    find his transcripts on the evening programing.

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