It took approximately five minutes after the announcement of Paul Ryan as the Republican running mate for the spin to begin. Anxious to pre-empt a conversation about Ryan’s plan to end the guarantee of Medicare, the Mitt Romney campaign is on the air with some (strikingly dishonest) Medicare ads of their own. They have plenty of money to advance this message, so it’s worth unpacking what’s really going on.
First and foremost, the Ryan plan, in any form, would mark the end of Medicare as we know it—as a guarantee of health coverage for senior citizens. Instead, it would give older people a voucher to go buy their own private insurance. The Ryan budget would also increase the eligibility age, delaying the time when retirees could get Medicare. That’s the proposal the U.S. House voted on and passed in March and it’s the model Ryan has continued to promote even as he’s suggested possible tweaks.
So let’s move on to the claims the Romney campaign is making. The Affordable Care Act is paid for partly through billions in future savings—about $700 billion over 10 years in reduced payments to health insurance companies and providers. A lot of that money stays in the Medicare system, by paying for free preventative care for seniors and closing the prescription drug “doughnut hole.” The attack leveled by Romney, Ryan and their allies—an attack that’s Jonathan Cohn rightly called “astoundingly cynical”—is that this constitutes a massive cut to Medicare.
But here’s the catch: in the Ryan budget that passed, these future savings are included, even as the rest of the ACA is repealed. So the same reductions that the Romney campaign is complaining about were voted on and approved by Ryan and virtually every House Republican.
In the ACA, the cost savings that come out of Medicare go back into the health care system. In the Ryan budget, they’ll be needed to pay for the massive tax cuts proposed in that plan. Cohn notes that not only does this money get pulled out of providing health care entirely, but the attack the Romney campaign is making is a “brazen misrepresentation of reality.” Or, to say it in fewer and shorter words, “a lie.”
The Ryan plan doesn’t replace the guarantee with the vouchers for 10 years, so that major change doesn’t immediately affect today’s retirees. But the repeal of the ACA’s provisions on prescription drugs and preventative care absolutely will. If those provisions are gone, seniors who are on Medicare now will be paying hundreds of dollars more out of pocket. Ryan’s cuts to Medicaid, which many seniors depend on for nursing home care, would also have a big impact—his proposed cuts to Medicaid and the repeal of the ACA Medicaid expansion are a big and under-covered change in his budget. Some 6 million of today’s retirees depend on Medicaid and could lose out under Ryan’s plan. This is what was in the Ryan budget the House passed, and he hasn’t backed off of this at all.
What’s more, if Ryan’s plan kicks in ten years from now, today’s Medicare beneficiaries will get an unpleasant wake-up call as the voucher plan starts to erode the program:
In 2022, when the limited-subsidy program would be introduced, seniors who qualified for traditional Medicare would be allowed to switch to the new program. If healthier or younger beneficiaries make the change to lower their out-of-pocket costs, those still participating in Medicare would be part of an insurance pool that is less healthy and more expensive. To cover those higher per-person costs, Medicare might well be forced to either raise premiums or limit reimbursements to health care providers—which could prompt many to stop taking Medicare patients.
Romney has suggested he may back off of the Medicare savings that Ryan included in his original budget. But in that case, the Ryan budget math gets even more implausible. And by the standards Romney has laid out for how he wants his budget to work, Medicare would have to be slashed either way. That these cuts to programs for vulnerable people would be required in order to pass his huge tax cuts for the rich adds insult to injury. As Derek Thompson notes, Romney’s proposals “have clear and inevitable conclusions: Tax cuts for the richest and spending cuts for the poorest.”
It’s hard to overstate how hypocritical and dishonest the new Romney-Ryan attacks over Medicare are, coming from two people who have pledged changes so radical that they’d leave it unrecognizable.