The Herald reported that Obama’s health plan “trims $500 billion from Medicare Advantage over a decade.” It doesn’t. The health reform law did cut some $500 billion from the Medicare program—but almost all of it in the form of payment reductions to hospitals and other medical providers. The cut to sellers of Medicare Advantage plans was $136 billion, not the $500 billion the Herald told its readers. To explain: With a Medicare Advantage plan, seniors get their benefits from private insurers, which in turn are paid by the government. The government had been paying insurers more than it costs to provide the same benefits under traditional Medicare. The health reform law eliminated those extra payments on the grounds they are a waste of money.
There were no cuts in the basic hospital and doctor benefits under Medicare, but that has not stopped Republicans from using the $500 billion “cut” to scare seniors and win points.
When the press gets it wrong, it compounds the misinformation the public gets in the heated rhetoric of the campaign. In my next post, I will explain more about what the Affordable Care Act did and didn’t do to Medicare.