Obama's Medicare misdirections

By E. Thomas McClanahan

One of the most important exchanges during last week's presidential debate dealt with Medicare, where President Obama was on thin ice from the beginning.

Obama said the $716 billion he's yanking from Medicare and shifting to Obamacare represents savings from "no longer overpaying insurance companies" and "making sure we weren't overpaying providers." Romney fired back, saying - accurately - that those aren't just clawbacks of overpayments; they are across-the-board reductions. They will reduce benefits for many current recipients, while the Romney plan won't touch people 55 and above.

In a report made public during the summer, the Congressional Budget Office said the billions shifted from Medicare include cuts for hospitals, nursing services, hospice facilities, home health - and a $156 billion reduction in Medicare Advantage, which uses private plans to deliver benefits to 27 percent of Medicare recipients.

Robert Moffit of the Heritage Foundation, a former deputy assistant secretary of health and human services, said that during the Senate debate on Obamacare, members worried that the proposed Medicare cuts would decrease benefits for current Medicare Advantage recipients. Administration officials agreed that they would, Moffit recalled.

In addition, he noted that soon after the bill was enacted, Medicare's chief actuary said the reductions would also jeopardize access to care for other Medicare patients; lower payments would drive some hospitals and doctors out of the program.

Some Obamacare defenders argue that the Medicare spending reductions are directed at providers, not beneficiaries, and thus will not affect services. But Medicare is a fee-for-service program. If you cut the fees, you're going to affect services.

Obama also erred by repeating an inaccurate Democratic talking point, namely that Romney's Medicare plan would subject seniors to the tender mercies of the private market armed only with inadequate "vouchers." The vouchers, Obama said, "wouldn't necessarily keep up with health-care inflation." He cited estimates that this "would cost the average senior about $6,000 a year."

Wrong. As the New York Times reported last month, "The outdated charge that future Medicare beneficiaries could face $6,400 in higher costs comes from an analysis of an old proposal ... that has since been revised." The story says that even Obama himself has acknowledged that, leaving one to wonder why he used the inaccurate version last week.

As Romney explained in the debate, premium support under his plan would be set at the level of the second-cheapest plan, so seniors would have at least two plans to choose from without having to pay more out of pocket. Nor would the plans on offer be strictly private; they would be government-vetted. They would have to provide the full range of Medicare services. Traditional Medicare would be one of the options.

The credibility boost Romney gave himself last week will help him sell his Medicare plan, a critical part of his platform. But he has a long way to go. Another Times story reported that Romney has been losing ground among baby boomers who are worried about his plan - even though most wouldn't be affected because of their age.

Romney has to convince voters that he's proposing a reasonable modernization of a program that will collapse under its own weight otherwise.

"People love Medicare, but they don't understand how it works or how it's financed," Moffit said. "We are looking at $37 trillion in promised benefits that are not paid for. It's a real crisis, and it will intensify as the boomers start to retire."