GOP Spin: The $716 Billion Lie

From Boomantribune.com

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.