You might expect the administration’s top health official to be able to launch an accurate attack on her opponent’s health care plans. But in a short speech at last night’s Democratic National Convention, Obama administration Health and Human Services Secretary Kathleen Sebelius attacked the Medicare reforms put forth by President Obama’s GOP — and managed to get just about everything wrong.
Here’s the key paragraph from her speech:
What's missing from the Romney-Ryan plan for Medicare is Medicare. Instead of the Medicare guarantee, Republicans would give seniors a voucher that limits what is covered, costing seniors as much as $6,400 more a year. President Obama extended the program's life by eight years while improving seniors' benefits, and strengthened the Medicare guarantee. (The president agrees with you: no vouchers!)
Let’s take these lines one at a time.
“What's missing from the Romney-Ryan plan for Medicare is Medicare.”
This is wrong, or, at the very least, extremely misleading. Romney’s Medicare reform is frustratingly opaque on many of its specifics. But one thing he’s made clear is that it would leave a traditional, government-run Medicare fee-for-service option in place. The most recent version of Ryan’s plan, which was cosponsored by Democratic Senator Ron Wyden, would also leave a government-run, fee-for-service Medicare option in place.
“Instead of the Medicare guarantee, Republicans would give seniors a voucher that limits what is covered, costing seniors as much as $6,400 more a year.”
Also wrong. As The Washington Post’s Sarah Kliff points out, that figure, touted by numerous Democrats last night, is based on an independent estimate of an older version of the Ryan plan that didn’t retain fee-for-service Medicare as an option. It’s not based on the current incarnation of the Ryan plan, and it’s certainly not based on anything that the Romney campaign has proposed. (Indeed, Romney's plan is evasive enough that it would probably be difficult to make similar estimates reliably.)
“President Obama extended the program's life by eight years while improving seniors' benefits, and strengthened the Medicare guarantee.”
Sebelius has made this claim several times before. But it’s dubious at best. As both the Congressional Budget Office and Medicare’s own chief actuary, Richard Foster, have explained, the only way that ObamaCare’s Medicare payment reductions will extend the life of the trust fund is if the savings produced by those reductions are not used to pay for new insurance subsidies. To say otherwise would be double counting. Yet the administration claims that the law both funds new insurance subsidies and improves the trust fund. As Foster has explained, that essentially amounts to a claim that the administration plans to spend dollars twice.
As a side note, it’s also interesting that Sebelius chose to say that the administration “extended the program’s life by eight years,” which suggests that the program is headed for death by 2024, when the Trust Fund is currently projected to expire. If the life of Medicare is truly set to end in 2024, shouldn’t that be a pretty big deal? Regardless, a program with that short a lease on life doesn’t sound like it provides much of a “guarantee.”
“The president agrees with you: no vouchers!”
Conveniently, so does the Romney-Ryan campaign.
Neither Ryan-Wyden nor the Romney campaign would overhaul Medicare via a voucher system, which would give seniors a fixed voucher to offset health insurance costs. Instead, both the Ryan-Wyden plan and the Romney campaign are proposing premium support systems that use competitive bidding to help set payment levels equal to the second least-expensive plan that above a government-defined floor for coverage. Those payments are made directly to insurers who operate through regulated exchanges — much like both ObamaCare and RomneyCare. There are similarities between vouchers and premium support systems, in other words, but crucial differences as well.
But maybe it's not so surprising that Sebelius would mix up vouchers and premium support. She’s been confused about the difference before. Asked to explain the difference between the two in a congressional hearing last year, she declined to go into much detail, saying she’s “not as familiar” with premium support systems. Apparently not.