This week’s laurel goes to Jackie Calmes of The New York Times for reporting the increasing skepticism in health policy circles about claims from the Romney-Ryan ticket that Medicare beneficiaries will be hurt because the president’s health reform law cuts $716 billion from future Medicare spending and puts the savings into subsidies for the uninsured called for by the Affordable Care Act. While there has been some attempt by other media to examine the Romney-Ryan claims, Calmes’s piece stands out.
First, she adds important context: The cuts to Medicare spending called for by the Affordable Care Act, she reported, prolong the life of the Medicare Part A trust fund by eight years. That fund pays hospital bills and is financed by payroll taxes. According to the experts she spoke with, the spending cuts mean Congress would not have to act as quickly as it otherwise might to shore up the trust fund, a point that’s been missing in much of the coverage of Ryan’s voucher plan.
The press has also been quick to repeat Romney’s contention that under his plan, current beneficiaries and Americans within ten years of receiving Medicare benefits (55 and older) would not be affected by the voucher plan. Calmes reports that they will, and she cites analysts who’ve crunched the numbers. Those experts found that if the $716 billion savings in future program growth were added back to the budget—in other words, if Romney kept his promise to repeal the Affordable Care Act the day after he moves to the White House—beneficiaries would have to pay hundreds of dollars more in out-of-pocket Medicare expenses, to fund that spending.
It was good to hear Marilyn Moon’s voice in the piece. Moon, a former trustee of the Medicare system and now vice president and director of the health program at the American Institutes of Research, is as credible a Medicare expert as you can find. She estimated that restoring the $716 billion would increase premiums and Medicare copayments for beneficiaries by $342 a year on average over the next decade. By 2022 the average increase would be $577.
Why the increase? Calmes carefully explained that beneficiaries share in the cost of Medicare—through premiums, coinsurance, and copayments. That’s the way Medicare has always worked. As I pointed out in my own post on Wednesday, most of the $716 billion in spending cuts fell on providers, particularly on hospitals, which had agreed to them early on in ACA negotiations, in exchange for getting more patients with health insurance. So if repeal of the ACA means providers will get more money, it means beneficiaries will have to pay more, too.
Also, the piece begins to outline an emerging GOP argument—that the cuts in the growth of Medicare spending could hurt providers who, in turn, might choose to no longer care for those on Medicare, as a result. Calmes quotes Romney’s policy director, Lanhee Chen, who argued in a memorandum last week: “In the real world, the result will be fewer providers accepting Medicare payments and worse care for today’s seniors.” As the weeks go on, we hope there is more discussion and scrutiny of this part of Romney’s argument.
Romney himself has had harsh words for another piece of the puzzle—cuts in reimbursements that the ACA imposes on insurance companies that sell Medicare Advantage plans. Romney said on a campaign stop: “This is the president’s plan: $716 billion cut, four million people losing Medicare Advantage, and 15 percent of hospitals and nursing homes not accepting Medicare patients.”
What about those Medicare Advantage plans, one option for covering the gaps in Medicare benefits? Moon’s explanations in Calmes piece should be mandatory context the next time a reporter deals with this argument that the sellers of Medicare Advantage will be hurt. The reductions for Medicare Advantage sellers are what Moon called “a matter of basic fairness, because they’ve been overpaid for years.” CJR has also pointed this out.
And Moon reinforced another point that has not been raised much by the media until recently: Beneficiaries do not lose any basic Medicare benefits because of the ACA cuts.
Kudos to Calmes for furthering the story of the $716 billion cut/savings! (Take your pick).