Republican Mitt Romney stumped in Florida on Monday when went on offense to rebut criticisms of his running mate’s proposal that cut Medicare spending.
President Obama he cut Medicare, Romney noted.
“The president's idea, for instance, for Medicare was to cut it by $700 billion. That’s not the right answer,” Romney said. “We want to make sure that we preserve and protect Medicare.”
But Romney’s criticism of the Medicare cuts also boomerangs on his newly chosen running mate, Wisconsin Rep. Paul Ryan, who implicitly voted for the same Medicare cuts as president Obama’s health plan known as ObamaCare.
Under the 2011 Ryan plan bill approved by nearly every House Republican, ObamaCare would have been repealed almost entirely – except when it came to the Medicare reductions in future reimbursement rates to hospitals and drug and insurance companies.
So Medicare’s bottom-line spending would have been about the same under ObamaCare or under what some are now calling RyanCare.
But aside from the similarities in the $700 billion decade’s-worth of cuts between ObamaCare and Ryan’s plan, the two proposals differ greatly.
Ryan’s plan would likely cost future seniors more in out of pocket expenses due to the way it calls for a voucher-like premium-support system. But Ryan’s plan, nicknamed RyanCare, would save taxpayers money and would likely keep Medicare solvent longer than ObamaCare would.
The Medicare trust fund is scheduled to be insolvent in 2024 – eight years later thanks largely to the cuts in ObamaCare.
Obama diverted the money saved from Medicare to boost health subsidies for the poor and uninsured, especially in Medicaid, the state-federal health-insurance program. Also, ObamaCare raised up to $1 trillion in new taxes to help fund these programs.
Romney and Ryan oppose the new government subsidies and the tax increases. Republican supporters say Obama essentially “stole” money from Medicare to boost the other programs.
The Obama-stole-Medicare money could prove to be a political winner for Republicans. After all, it worked in 2010.
Also, voters could get lost in all of the back-and-forth over who cut what, when and why. And if both sides look equally culpable when it comes to cutting Medicare, then Democrats could lose a powerful political tool that often inures to their benefit.
So the Medicare cuts could be a sword Romney wields against Obama. Or it could be a shield that covers his flank.
Under the Ryan plan, the money saved from the Medicare cuts would have been set aside and could have been used to boost Medicare spending or reduce the deficit, which has grown on Obama’s watch, despite his promise to cut the budget in his first term.
Then there’s the plan that Romney’s campaign says he supports: A full repeal of ObamaCare, including the cuts that saved the program money.
So, technically, Romney might be advocating for more spending on Medicare for the next 10 years.
Romney and Ryan’s plans converge in 2022, where they differ sharply from ObamaCare.
Starting in 2022, those people who turn 65 and become Medicare eligible would no longer be enrolled in traditional Medicare. Instead, they’d get the premium support.
Democrats have repeatedly said that Ryan’s plan would “end Medicare,” a comment that earned PolitFact’s “lie of the year” award. Ryan’s plan keeps Medicare, in that it helps older people with medical expenses.
RyanCare, though, would fundamentally restructure Medicare.
At its heart, the Romney-Ryan plan would give health-insurance companies the direct premium support subsidy to help cover the health insurance of each recipient. The subsidy would be larger for sicker and poorer people and it would be lower for richer and healthier people.
That would make Ryan’s plan more of what can be called a “defined-contribution” plan, where the government’s payout is clearly set. The most recent Ryan proposal caps that insurance subsidy – which Democrats somewhat inaccurately call a “voucher” – and it can only increase by .5 percent above the growth rate of GDP.
ObamaCare is more of what’s known as a defined-benefit plan, which would guarantee recipients certain services. It’s unclear, however, how services can be guaranteed when provider rates – especially at hospitals – are being cut.
Aside from the Medicare cost-reductions, Obama has proposed new measures to extend the life of Medicare by two more years – until 2026.
ObamaCare did more than just cut Medicare. It mandated people buy insurance or pay a tax-like penalty. It forced insurance companies to ultimately cover people with pre-existing conditions.
And it closed the so-called “doughnut hole” in order to subsidize up to $3,000 in prescription-drug costs for about 4 million people that went uncovered in the 2003 Medicare expansion under President Bush that Ryan voted for.
Ryan and Romney would repeal all of those aspects of ObamaCare.
But in 2011 and 2012, Ryan’s spending proposals left one ObamaCare vestige intact: The Medicare cuts.
The cuts were estimated at $500 billion over a decade, and only increased to $700 billion last month after a new analysis by the nonpartisan Congressional Budget Office.
Republicans in 2010 used those Medicare cuts as an effective political weapon. Seniors voted in droves against Democrats.
Then, the following year, House Republicans voted to keep those very cuts the party pilloried with great success. The cuts weren't explicitly spelled out in the proposal, which wasn't so much legislation as it was a resolution that outlined spending goals. But by not repealing the cuts, the Ryan plan kept them in.