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The Republican Medicare Scam and How to Nail Them On It

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By Bob Cesca: Here's the biggest flimflam the Republican Party will try to get away with this year.

Wait. Let's qualify that statement. There are quite a few scams in the works right now from the Romney/Ryan/Republican cabal. Some of the more egregious ones include the one in which Romney pretends he didn't pass healthcare reform that's similar to Obamacare; there's also the one about welfare reform; the one about Ohio early voting and military personnel; the one about the president doubling the deficit, and so forth etc, etc, etc.

But these don't carry the same colossal Orwellian heft as the biggest load of hooey the Romney/Ryan ticket will foist upon us between now and election day. And that's the idea that the Republicans are the true protectors of Medicare, while the Democrats have tried to kill it.

Yes, the Republicans. The party that's been trying to destroy Medicare since before it was even signed into law. The party of Ronald Reagan, who famously recorded a screed about how Medicare was a path to a communist dictatorship, and the party that thinks socialized medicine is worse than no medicine at all. They're the true protectors and defenders of Medicare? That's rich. Meanwhile, they'll attempt to convince voters that the Obama administration has gutted the program, and the Democrats, who created Medicare and have defended it for the last 40-plus years, are the villains. Of course none of this is true.

What's the truth here?

The centerpiece of the Paul Ryan plan, which will likely be adopted by a would-be Romney administration, is as follows. For everyone younger than 54, the Medicare system as we know it will be replaced by vouchers. Retirees will pick their favorite private health insurance plan and the government will pay the private insurer for the premiums and other costs. There aren't any mechanisms to control costs, there aren't any caps on out-of-pocket expenses, and there's nothing in the plan to increase voucher amounts to match rising costs. Oh, and this Medicare boondoggle is part of Ryan's overall budget plan, which would increase the deficit to $6 trillion in ten years. He's quite a fiscal hawk, isn't he?

Paul Ryan thinks this will strengthen the system, but it will only serve as a cash grab for private corporations, with retirees stuck in the middle covering all of the expenses that fall through the cracks. And the objective is clear: continuously sabotage the system until it can no longer function. Slow death.

It's no wonder the National Republican Congressional Committee issued a memo suggesting that candidates use Orwell/Luntz-style words to describe the party's approach to Medicare.

“Do not say: ‘entitlement reform,’ ‘privatization,’ ‘every option is on the table,’” the National Republican Congressional Committee said in an email memo. “Do say: ‘strengthen,’ ‘secure,’ ‘save,’ ‘preserve, ‘protect.’”

At the same time, the Republicans have been telling the press and voters that President Obama's healthcare reform law, the Affordable Care Act, cuts $700 billion from Medicare. They don't usually get into details or evidence of their claims because they're entirely untrue. In fact, the ACA cuts just over $400 billion in "waste, fraud and abuse" in ten years, along with cuts to the private Medicare Advantage program for wealthier retirees. In other words:

The Affordable Care Act achieves savings in the Medicare program through a series of payment reforms, service delivery innovations, and increased efforts to reduce fraud, waste, and abuse. The actual projected reduction in Medicare spending is $428 billion over 10 years, after $105 billion in new Medicare spending is taken into consideration. These projections actually extend the life of the Medicare trust fund by about a decade. It is important to stress that none of the payment reforms affect Medicare's guaranteed benefit packages. The law specifically states that the guaranteed benefits in Medicare Part A and Part B will not be reduced or eliminated as a result of changes to the Medicare program.


Under the funding mechanism in effect before enactment of the Affordable Care Act, MA plans were paid, on average, 9 – 13% more than the traditional Medicare program to provide the same coverage. These extra payments resulted in Medicare Part B premiums being $3.35 higher per month for all beneficiaries in 2009, and resulted in the federal government (and taxpayers) spending $14 billion more than it would have had Medicare Advantage plan enrollees remained in the traditional Medicare program.

By the way, a Romney/Ryan would also repeal "Obamacare," which would re-open the dreaded Medicare Part-D "donut hole." Every year under the Bush prescription drug plan that Paul Ryan voted for, if seniors spend $2800 on prescriptions, they have to pay out of pocket for every dollar over and above that amount until they reach $4700 in costs, at which time the government resumes payments. Obamacare has already begun to close the gap, and retirees have saved billions of dollars.

In the first two years after “Obamacare” was signed, Medicare reforms in the law saved seniors a total of $3.4 billion in prescription drug costs by bridging a coverage gap, according to official figures.

Over 220,000 beneficiaries have saved an average of $837 in the first three months of 2012, the Medicare agency said Monday. That’s on top of $3.2 billion in savings enjoyed by some 5.1 million seniors in 2010 and 2011 thanks to the Affordable Care Act, according to the advisory on the new figures.

The savings were wrung through a combination of discounts on Medicare prescription drugs — 50 percent on brand names, 7 percent on generics — and rebates for seniors who fell under a coverage gap known as the “doughnut hole.”

That's huge, and hardly amounts to "cuts" in the system, unless of course we're talking about making seniors pay less for life-saving healthcare.

President Obama is preserving the current system, while increasing its longevity by another decade simply by catching Medicare cheaters and over-payments. Everything is intact and all the advantages of a government-run system remain. For example, Medicare's overhead is around 3% -- a fraction of private insurance companies -- and that translates to lower premiums for retirees. The Ryan plan sells out future retirees to private corporations. (You might've noticed that Ryan's plan is similar to the ACA's insurance exchange program, but there's a big difference: it's all about trajectory. Bear in mind that the ACA is a step towards a universal single-payer system, while Ryan's plan is a huge step away from government-run insurance.)

So when you hear a Republican screeching about the president's "cuts" to Medicare, nail them on this one. Nail them to the wall. The ACA didn't cut Medicare by $700 billion. It didn't cut Medicare at all. The president didn't cut benefits or hand the system over to behemoth corporations. And why are the Republicans against tackling waste, fraud and abuse?

Democrats need to push these guys on Medicare -- and hard. Otherwise, the GOP Medicare matchstick men will win the debate.

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