By: John Presta September 15, 2012
The leading non-partisan health care think tank, The Henry Kaiser Foundation, released a detailed policy data note on the impact of repealing The Patient Protection and Affordable Care Act (PACA), or better known as Obamacare.
Mitt Romney and Paul Ryan promised to repeal all of Obamacare if they are elected President and Vice-President. In addition, they also promised to roll back the $716 billion in Medicare cuts that is part of Obamacare. The Kaiser Foundation addresses that vow by Mitt Romney and Paul Ryan to roll back President Obama's plan to cut $716 billion dollars from Medicare over a ten-year period.
Paul Ryan has said that “The president raids $716 billion from the Medicare program to pay for the Obamacare program. Here is what Mitt Romney and I will do: We will end the raid of Medicare.”
Is it a raid? Is it necessary? Does the cuts in Medicare pay for Obamcare?
Former President Bill Clinton addressed this exact issue as he told the Democratic National Convention (DNC). "First, both Governor Romney and Congressman Ryan attacked the president for allegedly “robbing Medicare” of $716 billion. That’s the same attack they leveled against the Congress in 2010, and they got a lot of votes on it. But it’s not true."
Clinton essentially explains the action by Obama for Obamacare, "What the president did was to save money by taking the recommendations of a commission of professionals to cut unwarranted subsidies to providers and insurance companies that were not making people healthier and were not necessary to get the providers to provide the service."
"And instead of raiding Medicare, he used the savings to close the donut hole in the Medicare drug program," said Clinton. "And - you all got to listen carefully to this. This is really important -- and to add eight years to the life of the Medicare trust fund so it is solvent until 2024. So President Obama and the Democrats didn’t weaken Medicare. They strengthened Medicare."
Clinton then called out Paul Ryan "because that $716 billion is exactly to the dollar the same amount of Medicare savings that he has in his own budget!"
The Kaiser Foundation makes the same arguments as Clinton that the cuts were made necessary by the Obama Administration in the passage of The Patient Protection and Affordable Care Act (PPACA) in order to extend the life of Medicare.
The conclusion of the Kaiser Foundation is that Medicare will be insolvent by the year 2016 if Mitt Romney goes through with the plan, not very far into the future.
Mitt Romney has vowed over and over again that he will repeal The Patient Protection and Affordable Care Act (PPACA), or known as Obamacare.
On that fateful day that the United States Supreme Court ruled on the constitutionality of Obamacare, Mitt Romney repeatedly promised to repeal Obamacare. A frustrated Mitt Romney said that June day that "If we want to get rid of Obamacare, we're going to have to replace President Obama."
"What the court did not do on its last day in session, I will do on my first day if elected president of the United States, and that is I will act to repeal Obamacare," he said. "Let's make sure we understand what the court did and did not do. What the court did today was say that Obamacare does not violate the Constitution.
What they did not do was say that Obamacare is good law or good policy. "Obamacare was bad policy yesterday, it's bad policy today. Obamacare was bad law yesterday, it's bad law today."
What the Kaiser Foundation is saying that the repeal of Obamacare, couple with restoring the cuts in Medicare will in fact make bad policy.
How does Obamacare affect the Medicare program?
There is a savings provisions. Obamacare will reduce the growth in Medicare spending with a phasing down of payments to Medicare Advantage plans. Also, reducing updates in payment levels to hospitals and other providers, and increasing premiums to be paid by higher-income beneficiaries.
Another impact is benefit improvements. Obamacare has provisions that improve benefits, providing free coverage for some preventive benefits, and closing the coverage gap in the Part D prescription drug “doughnut hole” by 2020.
There is also "delivery system reform." Some provisions will reduce costs and improve the quality of patient care for elderly and disabled beneficiaries. Two examples are reducing preventable hospital re-admissions and establish accountable care organizations (ACO).
New revenues are also included dedicated to the Medicare program. There is an additional payroll tax on earnings of higher-income workers and a fee on the manufacturers and importers of branded drugs.
There is also a revision by the Congressional Budget Office (CBO). Originally, the Medicare provisions of Obamacare were estimated to reduce net Medicare spending by $428 billion between 2010 and 2019.2 The CBO now estimates that the Medicare provisions would reduce Medicare spending by $716 billion from 2013 to 2022. The increase reflects a new ten-year budget window and changes in the CBO baseline.
The Kaiser Foundation drew many detailed conclusions, but the main one is this: Meidcare will be insolvent by 2016. If Mitt Romney gets elected President and follows through on his promise to repeal Obamacare and restore the cuts to Medicare.
Repealing Obamacare would accelerate the projected year of insolvency for the Part A Hospital Insurance (HI) Trust Fund by eight years, from 2024 (current projection) to 2016 (if Romney repeals Obamacare). This is because spending for services under Part A would increase, and revenues dedicated to Part A would decrease. As a result, within four years, Medicare would not be able to fulfill its obligation to pay for all Part A covered services. Medicare spending by $716 billion over ten years relative to the current baseline.
In summary, the Kaiser Foundation concludes that "Medicare provisions of the ACA (Obamacare) played an important role in putting Medicare on stronger financial footing."
Obamacare also offset some of the cost of the coverage expansions of Obamacare and provides additional benefits to people on Medicare. These Obamacare cost savings were achieved primarily by reducing payments to providers (such as hospitals and skilled nursing facilities) and Medicare Advantage plans.
Repeal of Obamacare, the Kaiser Foundation concludes, would undo these changes. It would raise costs for beneficiaries, and increase federal spending at a time when the nation is struggling to address the deficit and debt.
As President Bill Clinton said in his speech to the DNC and his conclusions about Paul Ryan's proposal to 'restore' the Medicare cuts. The same cuts that Paul Ryan proposed.
"You got to give one thing: It takes some brass to attack a guy for doing what you did."
Some brass indeed.
John is the author of an award-winning book, the 2010 Winner of the USA National Best Book award for African-American studies, published by The Elevator Group Mr. and Mrs. Grassroots: How Barack Obama, Two Bookstore Owners, and 300 Volunteers did it. Also available an eBook on Amazon. John is also a member of the Society of Midland Authors and is a book reviewer of political books for the New York Journal of Books