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Whew! Romney/Ryan agree on Medicare. Now, four questions...

Posted by John McDonough  August 15, 2012 10:51 PM

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So, good news, my friends. In my previous post, I noted the sizable discrepancy between the position of Mitt Romney and his new running mate, Paul Ryan, on the matter of the Medicare savings and reductions in the Affordable Care Act (originally scored at $449B 2010-2019, and now about $715B 2013-2022). Yesterday, Ryan did a 180 and now totally supports Mitt's position that all the Medicare reductions must be repealed as part of a total and complete repeal of the entire ACA.

And I, for one, say, whew! Glad that's cleared up.

Still, I can't help wondering if Team Romney/Ryan has thought through the implications of this now unshakable position. So in the interest of keeping the clarity train in motion, I would like to pose four questions relating to their newfound unity on Medicare and the ACA:

1. Cong. Ryan's House Budget Plan: As we all know, House Budget Chair Paul Ryan is most known nationally for his federal budget plan to cut taxes, change Medicare in 2023, cut spending, and balance the federal budget by ... 2040. Approved by the U.S. House in 2011 and 2012 with overwhelming Republican support and overwhelming Democratic non-support, his plan achieves the 2040 goal in no small measure by fully implementing the ACA's Medicare spending reductions ($716B between 2013-22 and much more '23-'40).

But ... since Cong. Ryan no longer supports this core plank of his budget plan, what does that deletion do to his and the House's plan to balance the federal budget by ... 2040 (when Ryan will turn 70 years old)? Will Ryan release a new date of budget balancing by ... 2050 ... 2060 ... 2070? Or when?

2. Medicare Benefits to Current Enrollees: Romney/Ryan now affirm that their intention is, given the chance, to repeal every single provision of the ACA, without exception. Every provision of the ACA includes a set of provisions that have already taken effect that expand and improve Medicare benefits for current elderly and disabled enrollees. These benefits include the shrinking of the prescription drug coverage gap known as the "donut hole;" plus coverage of all preventive care services such as mammograms and other cancer screenings with zero co-pays or deductibles; plus coverage of annual wellness visits, and more.

By repealing the entire ACA, Romney/Ryan are proposing the real and immediate elimination of benefits to current Medicare enrollees right away. The ACA reduces or eliminates no benefit to any Medicare enrollee, and neither does any proposal made by President Obama. Do Romney/Ryan understand they are proposing the elimination of benefits to current Medicare enrollees?

3. Medicare Premiums: A big part of the ACA's Medicare spending reductions involves lowering payments to private insurance companies that participate in Medicare Advantage (also known as Medicare Part C) -- $156B between 2013-22. These reductions, decried by Republicans, have caused no noticeable damage to Medicare Advantage -- enrollment in these plans is up, and premiums are down since the ACA took effect.

And there's something more. There is a financial interaction between Medicare Part C and Medicare Part B -- the physician services part of Medicare for regular fee-for-service beneficiaries. Turns out, the more Medicare Advantage costs, the higher premiums rise for Part B enrollees. And the lower Medicare Advantage go, the lower the pressure on Part B premiums affecting about 70% of all Medicare enrollees.

So, when Romney/Ryan propose to give back $156+ billion to private insurance companies participating in Medicare Advantage, they are also putting in motion higher premiums for ALL traditional Medicare enrollees in Part B. Do Romney/Ryan understand that implementing their plan to repeal the Medicare Advantage savings will increase Medicare premiums for fully 70% of Medicare enrollees?

4. Medicare Trust Fund Solvency: Whenever you hear the assertion that "Medicare is going broke," the real reference is only to Part A, the Hospital Insurance Trust Fund, which periodically teeters on the edge of insolvency. The ACA, as affirmed by the Congressional Budget Office and the Chief Actuary for the Centers for Medicare & Medicaid Services (CMS), extends the life of the Hospital Insurance Trust Fund by about ten years because of the law's Medicare reductions.

If the ACA's Medicare savings are repealed, the solvency of the Hospital Trust Fund will be shortened by about ten years. Do Romney/Ryan understand that their plan drastically reduces the financial solvency of the Medicare Hospital Insurance Trust Fund?

Just askin'...  Maybe we'll get lucky and get some more answers.

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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About the author

John E. McDonough is a professor of practice at the Harvard School of Public Health. He is the author of the book “Inside National Health Reform”, published in 2011 by More »


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