Obama’s Medicare Reforms Expanded Benefits For Seniors

August 14, 2012 11:57 a.m.

The Romney campaign’s new ad blitz reinforces its latest attack — that President Obama cut Medicare spending by $716 billion — with an ominous warning to seniors. But the Affordable Care Act’s cuts and other Medicare reforms don’t touch benefits, they target waste in provider payments.

In fact, the totality of Obama’s Medicare reforms expand benefits for seniors and lower out-of-pocket costs. The Affordable Care Act actually enhances Medicare benefits by closing the prescription drug coverage gap known as the “doughnut hole” and expanding free preventive services, including an annual wellness visit.The Romney ad misleadingly implies that seniors will take a hit. “You paid in to Medicare for years. Every paycheck,” a narrator says. “Now, when you need it, Obama has cut $716 billion from Medicare.” The ad also ignores the bipartisan nature of the cuts: Congressional Republicans voted overwhelmingly in 2011 and 2012 to sustain them in the budget written by Rep. Paul Ryan (R-WI), now Romney’s running mate. In 2008, John McCain proposed similar cuts during his presidential campaign, a move Obama ironically criticized at the time.

The Obama campaign immediately fired back, calling the ad “dishonest and hypocritical.”

The Romney ad is an effort to deflect criticism of Ryan’s Medicare plan, which would replace the coverage guarantee with a voucher for seniors to buy their own private or government insurance plan. Republican strategists privately worry the plan will be a major liability.

Obama’s cuts add eight years on the life of Medicare, according to the Congressional Budget Office, largely by reducing reimbursement rates to hospitals, prescription drugs under Medicaid and private insurance plans in Medicare Advantage. The AARP, as well as hospital and drug industries, endorsed the Affordable Care Act despite the cuts.

The cuts to Medicare Advantage plans have resulted in higher enrollment and lower average premiums in 2011 and 2012, according to official figures. Reforms closing the “doughnut hole,” which were partly funded by the cuts, have also saved seniors money on prescription drugs.

In addition, the Affordable Care Act’s Medicaid expansion offers seniors greater access to long-term care and other services that Medicare does not provide.

The Department of Health and Human Services projects that beneficiaries of traditional Medicare will save roughly $4,200 over 10 years as a result of the Affordable Care Act. HHS expects that the law will also save seniors between $3,000 and $16,000 on average on prescription drugs, depending on their costs.

“The savings his ad attacks do not cut a single guaranteed Medicare benefit, and Mitt Romney embraced the very same savings when he promised he’d sign Paul Ryan’s budget,” said Obama campaign spokeswoman Lis Smith in a statement. “Because the president is eliminating subsidies to insurance companies and cutting waste and fraud, we’ve extended the life of Medicare by eight years. The truth is that the Romney-Ryan budget would end Medicare as we know it: People with Medicare would be left with nothing but a voucher in place of the guaranteed benefits they rely on today.”

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