The Spectacle Blog

Obama, a Tweet, and Medicare

By on 8.17.12 | 3:50PM

Since Rep. Paul Ryan (R-WI) became the GOP nominee for Vice President, the future of Medicare has gone from being an important secondary issue to the issue most mainstream pundits (and both campaigns) are talking about. The Romney campaign has released an ad hammering Obama over his Medicare cuts, liberals and conservatives alike have gone after the Obama and Romney campaigns, and the Obama campaign Twitter feed seems to only stop talking about Medicare and the Patient Protection & Affordable Care Act (Affordable Care Act) when it wants to talk about how bad Ryan and Romney are for women.

A number of the Tweets from the campaign have their inaccuracies, but one claim in particular on August 15 was egregiously inaccurate:

"FACT: The President's health care law extends the life of Medicare by eight years without cutting benefits to seniors."

I won't get into the life extension debate -- that's been dealt with by others -- but his claim that the Affordable Care Act won't cut benefits to seniors is the President's version of trying to have his cake and eat it too.

How is this happening? Superficially, the President is correct. He won't cut benefits to seniors. Instead, the law has components that may cut payments to health care providers, per certain programs it has enacted. Will this impact benefits to seniors? Consider some recent congressional history regarding the so-called "Doc Fix," including how many doctors began refusing Medicare patients:

As explained in a 2011 Medicare actuarial study, Congress enacted [the law that created the Doc Fix] "to limit growth in spending on physician services to a sustainable rate, roughly in line with the rate of overall economic growth." This effort lasted for five years, and in 2002, the New York Times reported: "For the first time, significant numbers of doctors are refusing to take new Medicare patients, saying the government now pays them too little to cover the costs of caring for the elderly."

This practice of refusing new Medicare patients has continued to this day, which is why Congress regularly delays implementation of the Doc Fix. From the link above:

…[F]or every year since 2003, various congresses and presidents have legislatively overridden this so-called "sustainable growth rate" to ensure that Medicare patients have access to care. However, instead of removing this provision entirely, they overrode it one year at a time. Hence, each year, the distance between reality and what the law specifies became wider. This explains why Medicare was due to cut payments for physicians services by a whopping 27% this year.

Now, liberals may argue that the cuts will happen, especially with the power given to the Independent Payment Advisory Board (IPAB) to enact cuts that may be politically unpopular. Additionally, they cite CBO reports noting the cuts are set to happen. However, as I pointed out in the Hot Air Green Room two months ago, many are the policies that are supposed to happen in CBO's estimates that never actually do because of a lack of political courage. CBO accounts for this, actually, in its secondary budget estimates:

The CBO baseline budget expectations are those based upon current law. The alternative scenario is based upon expected political actions, aka current policy, and shows a fiscal scenario that is far, far worse than the baseline expectations. [Is] the baseline budget more feasible than the alternative scenario, given the delayed implementation of several major policies in recent years, including ending the Bush tax policies, implementing the payment reimbursement cuts in the "Doc Fix," and taxing millions of Americans under the AMT?

So, in short, with this one Tweet, the President has set himself up for one of two lies: either his law will harm seniors by limiting their access to health care providers, or his law won't make the cuts it promises, thus not increasing the life of Medicare as much as he claims.

The country's financial situation desperately calls for reforming the entire federal government, especially Medicare, Medicaid, Social Security, the Pentagon, and the tax code. Cuts are going to be a part of the solution, whether by design (Congress actually doing its job) or from external forces (think international investors and inflation), but for the President to claim he can have his cake and eat it too is intellectually dishonest.

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