Glenn Kessler: Winners, losers of Obamacare

The Washington PostFebruary 27, 2014 

"This Affordable Care Act, I am going to have bureaucrats telling me what kind of services I am going to qualify for. To be honest with you, I'm scared to death."

elderly man at a Town Hall meeting held by Rep. Justin Amash, R-Mich., which appears in an ad by pro-Republican group Americans for Prosperity

An irritated reader who lives in Michigan wrote to me about this ad, which seeks to bolster Amash as a fighter against the Affordable Care Act, a.k.a. Obamacare.

The reader asked how such as an elderly-looking gentleman could be on the Affordable Care Act. Instead, the reader surmised, the man must be on Medicare, which is a single-payer government-run health-care system.

First of all, it's clear that AFP put two unrelated parts of the conversation together. The first part, about bureaucrats, is related to the Affordable Care Act. The second part is about Medicare — because it turns out, the reader was right, the man is on Medicare.

Thus he does not have to worry much about Obamacare bureaucrats. However, he is worried about Medicare. Here's his full quote: "I've got Medicare right now but they took $700 billion out of it to put into the Affordable Care Act and what is that going to do to my coverages? To be honest with you, I am scared to death."

This $700 billion figure comes from the difference over 10 years (2013-2022) between anticipated Medicare spending (what is known as "the baseline") and the changes that the law makes to reduce spending. The savings mostly are wrung from health-care providers, not Medicare beneficiaries — who, as a result of the health-care law, ended up with new benefits for preventive care and prescription drugs. (It is worth noting that, given past practices, the Medicare actuary has doubted whether all of the planned cuts actually will come to pass.)

While it is correct that anticipated savings from Medicare are used to help offset some of the anticipated costs of expanding health care for all Americans, it does not affect the Medicare trust fund. In fact, the Obama health-care law also raised Medicare payroll taxes by $318 billion over the 10-year time frame, further strengthening the program's financial condition.

Indeed, the House Republican budget plan crafted by Rep. Paul Ryan, R-Wis. — and supported by Amash — retains virtually all of the Medicare "cuts" contained in the health-care law, but diverts them instead to his own Medicare overhaul.

Republicans argue that that is a more effective use of the savings.

Another wrinkle is that a good chunk of the spending reductions — $156 billion — would come at the expense of Medicare Advantage programs, used by 28% of Medicare beneficiaries and often favored by Republicans. We have no idea if this gentleman is on Medicare Advantage, but the goal of the reduction is to put payments on a par with traditional fee-for-service Medicare, as Medicare Advantage now costs the government more.

Should Amash have pointed out to the questioner that his worries about Obamacare bureaucrats were misplaced because he was on Medicare? Will Adams, a spokesman for Amash, noted that the man's initial question was about defunding the ACA, and that the disclosure that he was on Medicare came only at the end of the exchange. Moreover, he said, there are "legitimate concerns" about the impact of the ACA on Medicare.

Levi Russell, a spokesman for American for Prosperity, defended the use of the clip in the ad. "We feel the clip of the gentleman is relevant because he expresses concern about the impact of Obamacare," he said. "Since he is currently on Medicare, he has reason to worry about how Obamacare will impact his own coverage, especially if he uses Medicare Advantage."

Russell noted that earlier in February, 19 Senate Democrats joined 21 Republicans in signing a letter warning the administration against cuts to Medicare Advantage. The Washington Post has reported that "thousands of primary-care doctors and specialists across the country have been terminated" from Medicare Advantage as insurance companies try to streamline operations and reduce costs.

As we have often noted, there are winners and losers in the Affordable Care Act. Most people on Medicare appear to be winners, though there clearly will be some impact in Medicare Advantage that will create some losers. But AFP should be wary of using a clip to score political points when the speaker was making an assertion based on misinformation.

This clip might have worked in an ad about Medicare Advantage, but not one that highlights how the Affordable Care Act allegedly will reduce choices and impose bureaucracy in the system.


Glenn Kessler writes the "The Fact Checker" blog for The Washington Post.

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