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“The Rising”: Return Of The Big GOP Medicare Lie

The participant’s in last night’s GOP presidential debate once again took the opportunity to pretend that the Affordable Care Act (“Obamacare”) put a massive dent in Medicare by cutting $500 billion from the program.

Michele Bachmann told us that “We know that President Obama stole over $500 billion out of Medicare to switch it over to Obamacare.” Mitt Romney intoned “He cut Medicare by $500 billion. This is a Democratic president the liberal, so to speak, cut Medicare.”

Yeah…except that nobody stole anything and Medicare was not cut by $500 billion.

Here are the facts:

For starters, nobody cut anything from the Medicare budget in the health care reform bill. The actions taken in the legislation are designed to slow the growth of Medicare spending without cutting benefits. Further, not one cent that would have gone to Medicare is somehow being shifted over to a program created by Obamacare (for first time readers, I readily use the term Obamacare because I believe that this name will ultimately stand as an honor to the President who made it happen.)

With respect to the infamous $500 billion, the non-partisan Congressional Budget Office has made it clear that the bulk of the projected savings will come from two primary sources—ending the subsidies to health insurance companies who offer Medicare Advantage programs and reining in the growth of payments to physicians. The remainder will, hopefully, come from cutting back on the waste and fraud that have long been rampant in the Medicare system.

Let’s begin with the Medicare Advantage program. Established via the Medicare Modernization  Act of 2003. the program—a Bush/GOP creation—was ostensibly invented to encourage Medicare beneficiaries to gravitate towards privately operated insurance programs pursuant to the theory that the private sector could do a better job of  delivering care to our seniors than the government.

I say ‘ostensibly’ because the true purpose was to create a windfall for the private insurance companies who have done so much for so long for so many Republican elected officials.

The way the script played out, the private  insurance companies said that they would only be able to paricipate in the program if, and only if, the government gave them a head start by agreeing to subsidize their “start up costs” until the year 2010.

As  a result of the deal, Medicare found itself paying, on average, an 11%  surcharge on medical services and procedures provided by Medicare Advantage plans. This was enough to guarantee the insurance providers  a tidy profit fully comprised of the government subsidies, creating one of the greatest examples of corporate welfare in the history of the nation.

Not surprisingly, the health insurers took advantage of the windfall to attract customers by offering very low premium charges, not  to mention free gym memberships, one pair of eyeglasses per year, spa treatments, zero co-pays and  assorted other benefits not available to those who opted to take their Medicare  directly from the government. And why not? The insurers don’t need to make a penny from those who were insured as each customer guarantees them an 11 percent return on any medical benefit receieved courtesy of the Medicare program. Thus, they are more than happy to offer a free toaster to anyone who agrees to sign up.

What Obamacare did was put an end to the subsidies, thereby reducing future costs to the program by billions while continuing to provide Medicare beneficiaries with the benefits promised.

By any standards, this was a no-brainer in terms of reigning in the growing costs of Medicare and creating a system that is fair to all beneficiaries.

Now, the doctors.

This gets a bit tricky and, to be honest, I don’t really believe that these savings will ever materialize.

At the heart of the discussion is a formula that was designed during the Clinton Administration called the Medicare Sustainable Growth Rate, or SGR. The approach was created in an attempt to control Medicare spending for physician services with the idea being that the yearly increase in the expense per Medicare beneficiary should be tied to the growth in GDP. Thus, when actual Medicare spending exceeds the annual target in a given year, the SGR requires that physicians, and other system providers, must take a cut in order to bring the spending back in line with the annual spending targets.

The docs, understandably, do not like the idea of taking less in their Medicare payments. As a result, Congress has been delaying the cuts for years, constantly rolling them over into the next year at which time they roll them over again and again. Were Congress to ever stop delaying the SGR cuts, the physicians would find themselves feeling the cumulative pain of the delays with a one time Medicare rate reduction in excess of 20 percent.

These cuts are factored into the Medicare savings projections, along with hoped for savings to come by encouraging physicians to try some different approaches to practicing medicine.

Will this ever happen? Probably not.

So, while a skeptic can argue that these projected savings may never materialize, one cannot argue that this is, somehow, a cut to the Medicare program.

The bottom line is that there is nothing in the ACA that takes anything away from Medicare beneficiaries, now or in the future. Yet, the GOP continues to do its best to scare the hell out of seniors, the most reliable voter block in the nation.

We need to take this very seriously.

If the 2010 elections taught us anything, it is that a frightened voter  population will do some crazy things. So, it’s on us to make sure that our grandparents and parents understand that Repubican fear peddlers are selling nothing but lies and that falling for the lies could result in the end of Medicare as we know it if the Republicans are permitted to gain full control of the government.

If you would like more information on this to share with family and friends, just let me know. The effort to mislead our senior citizens worked well in 2010. We simply cannot permit it to work again in 2012.

 

By: Rick Ungar, Mother Jones, September 13, 2011

September 13, 2011 Posted by | Affordable Care Act, Class Warfare, Congress, Conservatives, Consumers, Democrats, Elections, GOP, Health Care Costs, Health Reform, Ideologues, Ideology, Medicare, Middle Class, Politics, Public, Republicans, Right Wing, Tea Party, Uninsured, Voters | , , , , , , , , | Leave a comment

Boehner’s New Proposal Could Produce Greatest Increase In Poverty And Hardship Of Any Law In Modern U.S. History

House Speaker John Boehner’s new budget proposal would require deep cuts in the years immediately ahead in Social Security and Medicare benefits for current retirees, the repeal of health reform’s coverage expansions, or wholesale evisceration of basic assistance programs for vulnerable Americans.

The plan is, thus, tantamount to a form of “class warfare.” If enacted, it could well produce the greatest increase in poverty and hardship produced by any law in modern U.S. history.

This may sound hyperbolic, but it is not. The mathematics are inexorable.

The Boehner plan calls for large cuts in discretionary programs of $1.2 trillion over the next ten years, and it then requires additional cuts that are large enough to produce another $1.8 trillion in savings to be enacted by the end of the year as a condition for raising the debt ceiling again at that time.

The Boehner plan contains no tax increases. The entire $1.8 trillion would come from budget cuts.

Because the first round of cuts will hit discretionary programs hard — through austere discretionary caps that Congress will struggle to meet — discretionary cuts will largely or entirely be off the table when it comes to achieving the further $1.8 trillion in budget reductions.

As a result, virtually all of that $1.8 trillion would come from entitlement programs. They would have to be cut more than $1.5 trillion in order to produce sufficient interest savings to achieve $1.8 trillion in total savings.

To secure $1.5 trillion in entitlement savings over the next ten years would require draconian policy changes. Policymakers would essentially have three choices: 1) cut Social Security and Medicare benefits heavily for current retirees, something that all budget plans from both parties (including House Budget Committee Chairman Paul Ryan’s plan) have ruled out; 2) repeal the Affordable Care Act’s coverage expansions while retaining its measures that cut Medicare payments and raise tax revenues, even though Republicans seek to repeal many of those measures as well; or 3) eviscerate the safety net for low-income children, parents, senior citizens, and people with disabilities. There is no other plausible way to get $1.5 trillion in entitlement cuts in the next ten years.

The evidence for this conclusion is abundant.

The “Gang of Six” plan, with its very tough and controversial entitlement cuts, contains total entitlement reductions of $640 to $760 billion over the next ten years not counting Social Security, and $755 billion to $875 billion including Social Security. (That’s before netting out $300 billion in entitlement costs that the plan includes for a permanent fix to the scheduled cuts in Medicare physician payments that Congress regularly cancels; with these costs netted out, the Gang of Six entitlement savings come to $455 to $575 billion.)

The budget deal between President Obama and Speaker Boehner that fell apart last Friday, which included cuts in Social Security cost-of-living adjustments and Medicare benefits as well as an increase in the Medicare eligibility age, contained total entitlement cuts of $650 billion (under the last Obama offer) to $700 billion (under the last Boehner offer).

The Ryan budget that the House passed in April contained no savings in Social Security over the next ten years and $279 billion in Medicare cuts.

To be sure, the House-passed Ryan budget included much larger overall entitlement cuts over the next 10 years. But that was largely because it eviscerated the safety net and repealed health reform’s coverage expansions. The Ryan plan included cuts in Medicaid and health reform of a remarkable $2.2 trillion, from severely slashing Medicaid and killing health reform’s coverage expansions. The Ryan plan also included stunning cuts of $127 billion in the SNAP program (formerly known as food stamps) and $126 billion in Pell Grants and other student financial assistance.

That House Republicans would likely seek to reach the Boehner budget’s $1.8 trillion target in substantial part by cutting programs for the poorest and most vulnerable Americans is given strong credence by the “Cut, Cap, and Balance” bill that the House recently approved. That bill would establish global spending caps and enforce them with across-the-board budget cuts —exempting Medicare and Social Security from the across-the-board cuts while subjecting programs for the poor to the across-the-board axe.

This would turn a quarter century of bipartisan budget legislation on its head; starting with the 1985 Gramm-Rudman-Hollings law, all federal laws of the last 26 years that have set budget targets enforced by across-the-board cuts have exempted the core assistance programs for the poor from those cuts while including Medicare among programs subject to the cuts. This component of the “Cut, Cap, and Balance” bill strongly suggests that, especially in the face of an approaching election, House Republicans looking for entitlement cuts would heavily target means-tested programs for people of lesser means (and less political power).

In short, the Boehner plan would force policymakers to choose among cutting the incomes and health benefits of ordinary retirees, repealing the guts of health reform and leaving an estimated 34 million more Americans uninsured, and savaging the safety net for the poor. It would do so even as it shielded all tax breaks, including the many lucrative tax breaks for the wealthiest and most powerful individuals and corporations.

President Obama has said that, while we must reduce looming deficits, we must take a balanced approach. The Boehner proposal badly fails this test of basic decency. The President should veto the bill if it reaches his desk. Congress should find a fairer, more decent way to avoid a default.

By: Robert Greenstein, President, Center on Budget and Policy Priorities, July 25, 2011

July 25, 2011 Posted by | Affordable Care Act, Budget, Class Warfare, Congress, Conservatives, Debt Ceiling, Debt Crisis, Deficits, Democracy, Democrats, Economic Recovery, Economy, Elections, GOP, Government Shut Down, Governors, Health Care, Ideologues, Ideology, Lawmakers, Medicaid, Medicare, Middle Class, Politics, President Obama, Public, Republicans, Right Wing, Tax Loopholes, Taxes, Teaparty, Uninsured, Voters, Wealthy | , , , , , , , , , , , , , , , , , | Leave a comment

   

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