Who’s Raiding Medicare? Hint: It’s Not Obama.

by Jonathan Cohn | August 15, 2012

Have you seen Mitt Romney’s new ad on Medicare? The video is below. The script goes like this:

You paid in to Medicare for years. Every paycheck. Now, when you need it, Obama has cut $716 billion from Medicare. Why? To pay for Obamacare. So now the money you paid for your guaranteed health care is going to a massive new government program that’s not for you. The Romney-Ryan plan protects Medicare benefits for today’s seniors and strengthens the plan for the next generation.

It’s not very subtle. And it’s not very true.

By now, you should know all about the hypocrisy of Romney attacking Obama for cutting Medicare. Paul Ryan put the same cuts in his budget plan. And while Romney has insisted he’d restore them, his budget doesn't have room for that. If he’s serious about his overall spending plan, then he’d surely have to cut Medicare by as much as Obama did. In fact, he’d probably have to cut it by even more. And that's just in the first ten years.

Still, the power of this ad is the appeal to senior citizens: Obama is taking your money and giving it somebody else. That’s why Romney and his allies keep saying that Obama “raided” Medicare. But, under the Affordable Care Act, a chunk of the money that comes out of Medicare goes right back into it. It helps seniors pay for prescription drugs, filling in the donut hole from Medicare Part D. It also allows seniors to get preventative care without co-pays, which means they can get an annual wellness visit, cancer screenings, and the like with no out-of-pocket costs. In the first half of this year, according to the Department of Health and Human Services, more than a million seniors have saved an average of $629 on their drug bills because of this assistance.

True, the majority of the money that the Affordable Care Act takes from Medicare doesn’t go directly to seniors. Instead, it goes to help non-elderly Americans get health insurance, either by enrolling in Medicaid or receiving tax credits to help pay for private insurance. The ad implies that transferring money in this way is wrong, but keep in mind that the money coming out of Medicare isn’t coming out of benefits. It’s primarily coming out of payments to health insurers and the rest of the health care industry, both of whom should be able to absorb it. (The government had been paying the insurers too much, according to multiple, independent analysis; cutting their subsidies was basically the same as cutting corporate welfare. The rest of the health care industry agreed to the cuts, in part because helping more people get insurance would create more paying customers for them.)

Maybe you think those trade-offs are fair and worthwhile. Maybe you don’t. But compare it to what Ryan and Romney have in mind. Ryan, again, has the same cuts in his budget. But he would rescind both the prescription drug assistance and the free preventative care. In other words, unlike Obama, Ryan would take benefits away from current retirees. And where would the money go? Ryan would  it to offset other priorities in his budget, priorities that happen to include a very large tax cut for the rich. 

So just to review:

Obama takes money away from the health care industry and uses it to help people pay their medical bills. Some of those people include seniors already getting help with their drug bills and free preventative care.

Ryan and, by implication, Romney takes the same money from the health care industry. But they also take away those new benefits for seniors, even as they find room in their tight budgets to cut taxes for the wealthy.

Like I said before, if somebody here is raiding Medicare, it’s not Obama.

If Republicans want to have a real debate about Medicare's future, they're welcome to argue that more competition will better hold down costs, that seniors really crave a much more competitive market, or that payment reforms to providers are likely to cause access problems. Those arguments don't persuade me, but at least they are defensible.

Better still, Republicans can make the honest case for their Medicare scheme—that a rock-solid guarantee of health benefits to seniors is not a commitment the country can afford to make anymore, so it's best to move to a system that limits the taxpayers' liability, even if that means the guarantee ends. I disagree with that, too, but it's ultimately an argument about values and priorities.

But this business about "raiding" Medicare? It's a naked appeal to selfishness and brazen misrepresentation of reality.

Update: Greg Sargent interviewed Rep. Chris Van Hollen, who said that Democrats are preparing to go on the offensive over higher costs for current retirees. It's about time.

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Source URL: http://www.newrepublic.com//article/106213/whos-raiding-medicare-hint-its-not-obama