ObamaCare and Medicare


The Obama administration has consistently taken the position that the new health care law won't cause individuals to change their health care plans and doesn't cut Medicare benefits. In fact, administration officials say, the law actually extends the solvency of Medicare. But the only way they can make that claim is by relying on accounting practices that both the Congressional Budget Office and the Centers for Medicare and Medicaid Services say amount to double counting. Meanwhile, millions of seniors are expected to be shifted off their current Medicare advantage plans by 2019. 

As Michael Ramlet and former CBO director Douglas Holtz-Eakin pointed out in a recent briefing, the new health care law took hundreds of millions of dollars out of Medicare and, rather than using it to shore up the program, plowed it into a new entitlement. The law's authors also failed to produce a genuinely sustainable solution to the "doc fix" problem—which is why the current-law scenario for the federal budget assumes that we'll soon see a large cut to physician reimbursements. And because the authors nabbed Medicare funding to pay for their new program, trimming the entitlement—arguably the single biggest long-term problem for the federal budget—probably won't be part of the deficit-reduction package.

Republicans, with a few exceptions, aren't much more savvy about fixing the program. The GOP has responded to the PPACA's cuts largely by circling the wagons around Medicare and promising not to touch it, which obviously isn't a viable long-term policy either.

No, the takeaway from all of this isn't, as some Republican politicians seem to think, that changes to Medicare and its benefits ought to be avoided at all costs. Indeed, significant changes will be required to put the program on a sustainable, manageable fiscal footing. Instead, it's that the president and his allies tried to sell the public on the new health care law by insisting, over and over again, that current health plans and Medicare benefits wouldn't be affected. Did the administration know how the law would play out in advance? Maybe, maybe not. But no matter what, many of the promises the president and his allies made about the law just ain't true.