Fact Checker: Cuts to Medicare

Introduction

'Congressman Braley is the only candidate in this race who voted to cut Medicare by $700 billion. That is a fact.'

Source of claim

Joni Ernst, Republican U.S. Senate candidate

Analysis

Ernst released an op-ed piece in the Des Moines Register this week repeating a claim made by the Republican Party of Iowa and the National Republican Senatorial Committee. Ernst claims the Affordable Care Act, which Rep. Bruce Braley approved, slashed Medicare by $700 billion. Medicare is the federal health insurance program for seniors and some younger people with disabilities.

This isn't a new claim. The National Republican Congressional Committee used it in an anti-Braley T.V. ad in September 2012. The Gazette checked this claim then, but since candidates and surrogates are using it again in the 2014 Senate race, we decided to refresh our check.

The $700 billion figure comes from a July 24, 2012, letter from the Congressional Budget Office (CBO) to Speaker of the House John Boehner. The letter said reversing the ACA would increase spending by $716 billion from 2013 through 2022, which means the law would cut spending by that amount.

So the question is whether cutting spending translates into a reduction in benefits for seniors.

First, we want to clarify that Medicare spending will continue to grow under the ACA, but at a much slower rate than if the changes hadn't been approved, according to the Kaiser Family Foundation, a nonpartisan health policy research group.

An August CBO report shows that unlike Medicaid, which is expected to see 15 percent more spending in 2014, and Social Security, pegged for a 5 percent spending hike, Medicare spending is expected to rise just 2 percent this year.

The law will cut costs by reducing reimbursement to hospitals that have less uncompensated care as more Americans sign up for private insurance through exchanges established by the law, said Peter Damiano, director of the Public Policy Center at the University of Iowa.

The federal government subsidizes those insurance policies for low-income Americans, but the cost of those subsidies so far has been less than expected.

The CBO predicted in April the ACA's coverage provisions would cost $5 billion less in 2014 than previously predicted and $104 billion less for 2015-2024. The cut comes from insurance plans having lower payment rates for providers, narrower networks and tighter management of subscribers' use of health care.

Some people worry the spending cuts — including lower reimbursements for hospitals, home health services and hospices — will end up affecting senior care. But the ACA has a provision protecting guaranteed benefits under Medicare.

Conclusion

Cutting Medicare spending isn't the same thing as cutting Medicare. If the government can be more efficient, reduce the number of uninsured Americans or increase preventive care that saves on costly ER visits, the United States could reduce health spending without Medicare recipients seeing any loss of benefits or services.

'There's nothing there that will hurt Medicare enrollees in terms of the cuts,' Damiano said of the ACA.

It's too soon to tell how the ACA will pan out, but 2014 reports by the CBO don't show any drastic deviations from what was predicted in 2012.

We score Ernst's claim as mostly false.

l Comments: Fact Checker was researched and reported by Erin Jordan, (319) 339-3157; erin.jordan@thegazette.com

Sources

Ernst op-ed: http://www.desmoinesregister.com/story/opinion/columnists/2014/09/03/raising-retirement-age-s-security-solution/14999677/

Republican Party of Iowa statement: http://www.iowagop.org/2014/08/29/bruce-braley-is-the-only-candidate-that-has-cut-medicare/

July 2012 CBO letter to John Boehner: http://www.cbo.gov/sites/default/files/cbofiles/attachments/43471-hr6079.pdf

April CBO report: http://www.cbo.gov/sites/default/files/cbofiles/attachments/45231-ACA_Estimates.pdf

August CBO report: http://cbo.gov/sites/default/files/cbofiles/attachments/45653-OutlookUpdate_2014_Aug.pdf