Medicare Was Not Robbed to Pay for ‘Obamacare’

As soon as Republican presidential candidate, Mitt Romney picked Representative Paul Ryan from Wisconsin to be his vice presidential running mate, the subject of Medicare got thrown on the table hard.  In a 60 Minutes interview conducted on August 12th, Mr. Romney said that President Obama had robbed Medicare of $716 billion to pay for Obamacare.  To be exact 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.”  Sorry Governor, but this statement is untrue.

First of all,  neither President Obama or the Affordable Care Act (referred to as Obamacare) cut the dollar amount from Medicare’s program budget.  But the healthcare law did institute  a number of changes to bring down the cost of future healthcare inside the program, but the actual amount of the budget was unchanged.  At the time, the law was passed those reductions were estimated to be $500 billion over the next 10 years.  However, those spending reductions were mainly aimed at health insurance companies and hospitals, not the beneficiaries.  The law made reductions to Medicare Advantage, which is a subset of Medicare plans run by private insurers.  By the way, Medicare Advantage was started under President G. W. Bush.  The point is ‘Obamacare’ scaled back payments to the Medicare Advantage private insurers, not the insured.

As our population ages, Medicare spending gets bigger every year.  Therefore, what had been a $500 billion number in 2010 has turned into $700 billion figure in 2012.  The Congressional Budget Office determined that in 2011 the Affordable Care Act would reduce Medicare outlays by $507 billion between 2012 and 2021.  This year, the CBO look at the years 2013 to 2022 and determine that the health care law, in fact, would cut Medicare outlays by 716 billion.  By the way, this new look at the numbers was prompted by the Republican House wanting to know the cost of repealing “Obamacare.”  As a side note, it turns out that repealing the current health care law will add $109 billion to the deficit over ten years. So credit to Romney for getting the $716 billion number right.  However, he was wrong to say that Barack Obama is the only president to try to cut Medicare outlays.  Medicare has been a source of funding contention since Ronald Reagan and all presidents since Reagan has sought to rein in Medicare spending.

The bottom line is money wasn’t “robbed,” or misappropriated, stolen or misdirected from Medicare or Medicare recipients and other Presidents since Reagan have reduced or try to reduce Medicare program outlays.  If Mitt Romney really wants to be president, he really should pay little bit more attention to  presidential history. It might help.