WASHINGTON—Mitt Romney’s promise to restore $716 billion that he says President Obama “robbed” from Medicare has some health care experts puzzled, and not just because his running mate, Representative Paul D. Ryan, included the same savings in his House budgets, reported The New York Times.
The 2010 health care law cut Medicare reimbursements to hospitals and insurers, not benefits for older Americans, by that amount over the coming decade. But repealing the savings, policy analysts say, would hasten the insolvency of Medicare by eight years—to 2016, the final year of the next presidential term, from 2024.
While Republicans have raised legitimate questions about the long-term feasibility of the reimbursement cuts, analysts say, to restore them in the short term would immediately add hundreds of dollars a year to out-of-pocket Medicare expenses for beneficiaries. That would violate Romney’s vow that neither current beneficiaries nor Americans within 10 years of eligibility would be affected by his proposal to shift Medicare to a voucher-like system in which recipients are given a lump sum to buy coverage from competing insurers.
For those reasons, Henry J. Aaron, an economist and a longtime health policy analyst at the Brookings Institution and the Institute of Medicine, called Romney’s vow to repeal the savings “both puzzling and bogus at the same time.”
Marilyn Moon, vice president and director of the health program at the American Institutes for Research, calculated that restoring the $716 billion in Medicare savings would increase premiums and co-payments for beneficiaries by $342 a year on average over the next decade; in 2022, the average increase would be $577.
Beneficiaries, through their premiums and co-payments, share the cost of Medicare with the government. If Medicare’s costs increase—for instance, by raising payments to health care providers—so, too, do beneficiaries’ contributions.
And those costs would be on top of the costs involved with a full repeal of the health care law, which would eliminate expanded coverage of prescription drugs, free wellness care and preventive checkups.
“One can only wonder what’s going on inside their headquarters in Boston and among their policy people,” said John McDonough, the director of the Center for Public Health Leadership at Harvard. “But there are only two explanations: Either they don’t understand how the program works, which is hard to imagine, or there is some deliberate misrepresentation here because they know how politically potent this charge is.”
The potency of the Republicans’ charge was evident in the 2010 midterm elections, when they accused Mr. Obama and Congressional Democrats of cutting Medicare by $500 billion to pay for new coverage under the health care law. They went on to recapture control of the House.
Led by Romney, Republicans revived that line of attack for 2012. But Romney cited a higher $716 billion in the same week that he announced his selection of Ryan, who had supported the reductions until joining the Republican ticket. The different dollar figures reflect a shifting time frame: $500 billion represented the projected Medicare savings in the decade after the 2010 health care law was enacted; $716 billion reflects savings from 2013 through 2022.
The Romney campaign adamantly disputes the critics’ assertions.
“The idea that restoring funding to Medicare could somehow hasten its bankruptcy is on its face absurd,” said Andrea Saul, a spokeswoman for the Romney campaign. She added, “Governor Romney’s plan is to repeal Obamacare and replace it with patient-centered reforms that control cost throughout the health care system and extend the solvency of Medicare.”
What Romney proposes to restore to Medicare, however, is not money but additional costs, for higher payments to hospitals, insurers and other care providers. Lobbying groups representing some care providers accepted those reductions during the health care debate, and in exchange they got the law’s mandate for nearly all individuals to have insurance, which meant that providers and insurers would have millions of new paying patients and policyholders.