≡ Menu

The 7 misleading claims Mitt Romney has made about Medicare

If you’ve seen any coverage of the Romney campaign lately, you’ve probably come across a picture of the former governor jotting down figures on a whiteboard. Nearly every claim Romney has made about Medicare– from his attacks on Obama to his own proposal– can be found on this tiny chart, making it the perfect opportunity for a fact check, to see how the candidate’s claims stack up against reality. Let’s get started.

Claim #1: Mitt Romney has a Medicare plan

FALSE: Romney repeatedly refers to his own Medicare plan, but if he does have one, he hasn’t shared it with the public yet. All Romney has said is that:

  1. It wouldn’t affect anyone currently over the age of 55– meaning it wouldn’t change Medicare benefits or reduce Medicare spending for at least ten years; and
  2. For anyone currently under 55, he would turn Medicare into a voucher system, and you could use your voucher to purchase private insurance or Medicare.

But as for a specific plan, with key details like how big the voucher will be, and whether it will grow fast enough to keep up with rising healthcare costs– Romney doesn’t have that. Instead, here’s what his website says:

“Mitt continues to work on refining the details of his plan, and he is exploring different options for ensuring that future seniors receive the premium support they need.”

Claim #2: Romney’s plan will keep Medicare solvent

FALSE: Really, for this claim to be true, Romney would first have to release an actual plan with actual numbers, which, again, he hasn’t done.

However, Romney’s website claims that simply replacing the current Medicare system with a “competitive, market-oriented system” will “put the future of Medicare on a sound footing.” But, as Ezra Klein, writing for Bloomberg news, points out:

“There is reason to believe that competitive bidding could save some money in Medicare. There are also reasons, ably laid out by Bloomberg View’s Peter Orszag, to believe it will disappoint. But there’s no reason to believe it could, on its own, make Medicare solvent.”

Romney’s running mate, Paul Ryan, has sent two voucher plans to the Congressional Budget Office (CBO)– both times they found that a voucher system alone did little to fix Medicare in the long term. Ryan’s plans did save money, but only because he set a limit on how quickly Medicare could grow– something President Obama has proposed as well.

Claim #3: Medicare will go bankrupt under Obama’s plan

MISLEADING: For one, President Obama’s Medicare “cuts” (see #4 below) actually extend the solvency of the Medicare trust fund by eight years, from 2016 until 2024.

But more importantly, as we’ve pointed out before, Medicare’s “solvency” is really a made-up accounting problem. Congress can always move money from the rest of the budget into the trust fund, which is why the CBO includes the cost of Medicare in its budget predictions. The problem is that the rapid growth of Medicare costs is predicted to expand the deficit.

The real question is, “Does each candidate have a plan to get Medicare’s long-term costs under control?” Obama’s Affordable Care Act does this in a number of ways, that we’ve laid out before.

Claim #4: Obama “robs” $716 billion from Medicare

MISLEADING: Obamacare does reduce Medicare spending by $716 billion over the next ten years. But it doesn’t “take the money out of Medicare”; it reduces the rates that will be paid to hospitals, private health insurers, and certain other providers. As The Boston Globe’s John McDonough explains quite well:

It’s the difference between eating into your savings account (what Romney charges) versus reducing your spending so that you don’t have to (what the ACA does).

Claim #5: Four million seniors will lose their Medicare Advantage coverage

MISLEADING: Remember that the original idea behind Medicare Advantage was that private insurance companies would provide Medicare coverage, and in competing for seniors’ business would drive down the cost of care. Instead the opposite happened- by 2010 the Medicare Advantage plans actually cost 17% more than traditional Medicare, driving premiums up for all beneficiaries. Under the Affordable Care Act, the government will pay these insurance companies less.

Insurance companies can’t afford to provide some Medicare Advantage plans without those extra payments– the Medicare Trustees estimate that 4 million seniors will be affected. However, these seniors can simply go back to traditional Medicare or switch to a different Medicare Advantage plan that doesn’t rely on over-payments. And indeed, many have; according to the Department of Health and Human Services:

  • 99.7% of seniors have access to at least one MA plan,
  • premiums for the program have fallen by 16%,
  • enrollment is up 17%, and
  • more seniors are enrolled in 4 or 5 star plans (thanks to the new law’s bonuses for plans that achieve high quality rankings)

Claim #6: 15% of hospitals and nursing homes will stop taking Medicare patients

TRUE (but also misleading): Romney is actually correct with the 15% figure. The Affordable Care Act reduces Medicare payments to hospitals and nursing homes– the idea being that they’ll figure out ways to provide care more efficiently. But some hospitals– Richard Foster, Medicare’s chief actuary, estimates around 15%– won’t be able to adapt to the reductions and will become unprofitable. If that happens, they might end their participation in Medicare (or Congress could step in and restore some of their payments).

However, as The New Republic’s Jonathan Cohn explains, simply saying 15% of hospitals will stop taking Medicare, without providing context, is misleading, for several reasons.

First, while Richard Foster is a smart and honest analyst, other smart, honest analysts disagree with him, including some who work for hospitals:

Keep in mind that the hospital industry endorsed the Affordable Care Act. If it had thought the cuts were too steep, rest assured, it would have howled. And the hospitals may already be adapting, if early indications are correct.

Second, not every hospital deserves to be profitable. Some offer redundant services that drive up the cost of care. Cohn writes:

And conservatives should know this as well as anybody, because their entire theory of Medicare reform is that cutthroat competition among providers will produce a more efficient health care system. In cutthroat competition, there are always losers.

Which brings us to the Cohn’s third point:

Let’s suppose Foster is right that 15 percent of providers will start losing money and that, as a result, seniors will have more trouble getting care. The same thing would happen under the conservative plans, because they cut just as much money, if not more, from Medicare.

Now, since Romney doesn’t have an actual Medicare plan we don’t know much money he’d cut. But we do know he has promised to restore Obama’s $716 billion in Medicare cuts and not to make any changes to Medicare for at least ten years– which means that to get Medicare on a sustainable path, he’ll have to make deeper, much more painful cuts down the road.

Claim #7: Romney’s plan means no change for current seniors

FALSE: While Romney hasn’t released a Medicare plan, he has promised to repeal the Affordable Care Act, which is already providing benefits to seniors, including:

Meanwhile, restoring Obamacare’s $716 billion in Medicare cuts would actually increase premiums and copays for seniors by several hundred dollars a year. The Incidental Economist’s Aaron Carroll has a great post explaining why, but it basically comes down to the fact that seniors pay a percentage of their coverage. If the total cost of covering each senior rises– and it would if those “cuts” were restored– the amount each senior pays increases as well.

So, to recap: in two minutes, Mitt Romney made 7 claims about Medicare. Three were false, three were misleading, and only one was true (but still somewhat misleading).

It’s gonna be a long two months until the election.

{ 0 comments… add one }

Leave a Comment