Friday, August 17, 2012

GOP Spin: The $716 Billion Lie


As the Washington Post helpfully points out, the origin of the $716 billion number the Republicans are throwing around is from a letter the nonpartisan Congressional Budget Office sent to John Boehner explaining how expensive it would be to repeal Obama's health care law. Among the costs of repeal would be an additional $716 billion in Medicare spending over the next ten years.

The Post also supplies a helpful chart that demonstrates that the Medicare savings in ObamaCare come in three roughly-equal parts. About 35% of the savings comes from paying lower reimbursements to hospitals, which accepted this deal because they know they will have a lot more insured customers who will make up for any loss in profits. About 30% of the savings came from tightening up the private insurance known as Medicare Advantage.
The whole idea of Medicare Advantage was to drive down the cost of health insurance for the elderly as private insurance companies competing for seniors’ business.That’s not what happened. By 2010, the average Medicare Advantage per-patient cost was 117 percent of regular fee-for-service. The Affordable Care Act gives those private plans a haircut and tethers reimbursement levels to the quality of care administered, and patient satisfaction.
And the remaining 35% of savings comes from an assortment of changes, including less compensatory money for hospitals who treat a high level of the uninsured (because there will be a lot fewer uninsured people soon).  In other words, the Affordable Care and Patient Protection Act made Medicare a lot more efficient, but it didn't do anything to reduce anyone's Medicare benefits.


  1. How do you figure the Posts' Information is correct?

  2. Did you not research before you posted? Was wondering where i could read more about it.

  3. It's a $716B savings that is being touted as a "cut" by the GOP. It's part of Obamacare that is cutting back on payments maid to private insurance companies that could not keep their costs down (such as medicare advantage). So it is a "cut" of sorts but not to the patients but rather to some of the private providers. I read variuous articles on this development and heard a bunch of arguments from all sides of the issue. Did you not think I researched it? I get your point. Thanks for reading.


  4. I hope you don't expect a meaningful response. You just bamboozled the blogger with your comments. Haha