An Itsy Bitsy $716 Billion Medicare Q&A

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Mitt Romney says that Obamacare cut $716 billion in Medicare spending. Is that true?

Yes it is. This is the most recent estimate from the CBO for the ten-year period from 2013-2022.

So seniors are getting screwed?

No, probably not.

Then who is?

Mostly hospitals and insurance companies.

How so?

About a third of the cuts come from reduced reimbursements to hospitals. About a third comes from reducing overpayments to insurance companies for Medicare Advantage plans, which are private competitors to standard Medicare. The remaining third comes from cuts in reimbursements to various other healthcare providers. More details here.

So there are no cuts to Medicare benefits?

Nope.

So Medicare beneficiaries have nothing to worry about?

Probably not. It’s possible that the cuts to providers could lead to slight cuts in quality or even, via some unintended backdoor mechanism, to some doctors dropping out of Medicare. And the cuts to Medicare Advantage might prompt insurance companies to reduce some of the extra benefits they’ve provided. That’s all speculative, but it’s possible. There’s no way to cut a bunch of money out of anything and guarantee that it will have no effect whatsoever.

However, the basic shape of the river here is pretty simple: Obamacare does indeed reduce Medicare spending by $716 billion (over ten years), but it doesn’t reduce Medicare benefits by a single dime. It’s unlikely that Medicare beneficiaries will see any noticeable effects at all.

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THE TRUTH...

is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

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