August 15, 2012

Hey John Sununu, Soledad O'Brien is Right!

CNN’s Soledad O’Brien went toe-to-toe with John Sununu on whether the Affordable Care Act (ACA) cuts Medicare spending by some $700 billion, which is what former Olympic organizer Mitt Romney, his running mate Rep. Paul Ryan (R-WI) and a host of surrogates are claiming.

 In her discussion with Sununu, O’Brien pushes back quite hard that the ACA reduces the growth in Medicare spending; it does not reduce Medicare benefits. You can watch the exchange here, courtesy of the folks at, (including the part where Sununu tells her to put an Obama bumper sticker on her forehead) and where he mentions pages 13 and 14 of the Congressional Budget Office’s letter to House Speaker John Boehner. Sununu insists the CBO letter states there is a reduction in benefits.

Here’s what the report says about Medicare on pages 13 and 14:
Effects on Spending for Medicare, Medicaid and Other Programs
 Many of the other provisions that would be repealed by enacting HR 6079 affect spending for Medicare, Medicaid and other federal programs.  The ACA made numerous changes to payment rates and payment rules in those programs, established a voluntary federal program for long-term care insurance through the Community Living Assistance Services and Support (CLASS) provisions,  and made certain other change to federal health programs. In total , CBO estimates that repealing those provisions would increase net federal spending by $711 billion over the 2013- 2022 period. 

Spending for Medicare would increase by an estimated $716 billion over that 2013-2022 period. Federal spending for Medicaid and CHP by about $25 billion from repealing the non-coverage provisions of the ACA, and direct spending for other programs would decrease by about $30 billion, CBO estimates.

 Within Medicare, net increases in spending for the services covered by Part A (hospital insurance) and Part B (Medical insurance) would total $517 billion and $247 billion, respectively. Those increases would be partially offset by a $48 billion reduction in net spending on for Part D.  The provisions whose repeal would result in the largest increase in federal deficits include the following (all estimates are for the 2013-2022 period)
  • Repeal of the reduction in the annual updates to Medicare’ payment rates for most services in the fee-for-service sector (other than physcians’ services) would increase Medicare outlays by $415 billion (that figure excludes interaction between those provisions and others – namely the effects of those changes on payments to Medicare Advantage plans and collections of Part B premiums) Of that amount, higher payments for hospital services account for $260 billion; for skilled nursing services, $39 billion; for hospice services, $17 billion, for home health services, $66 billion, and for all other services, $33 billion.
  • Repeal of the new mechanism for setting payment rates in the Medicare Advantage program would increase Medicare outlays by $155 billion (before considering interactions with other provisions).
  • Repeal of the reduction in Medicaid and Medicare payments to hospitals that serve a large number of low-income patients, known as disproportionate share hospitals (DSH) would increase federal spending by $56 billion.
  • Repeal of other provisions pertaining to Medicare,  Medicaid, and CHIP (other than coverage-related provisions discussed earlier) would increase federal spending by $114 billion. That includes a $3 billion increase in spending from elimination the Independent Payment Advisory Board (IPAB). Under current law the IPAB would be required, under certain circumstances, to recommend changes in the Medicare program to reduce that program’s spending; such changes would to in automatically.
I see lots of statements regarding reductions in payments or changes in payment methodologies, but I’m hard-pressed to find the smoking gun referencing the benefit reductions we keep hearing so much about. Maybe I missed that, the same way the Republicans are missing that if they repeal the ACA, the deficit will increase.  Which means they’ll have to cut something else to make up for it.  

Duck, middle class America. Duck.

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