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Two Harry Reid Medicare Savings Myths

Posted by Stephen on June 7, 2011

By Victor Morawski – Responding recently to the Senate’s rejection of the Paul Ryan Budget Plan, Sen. Harry Reid propounded two myths regarding ObamaCare Medicare savings when he said, “standing up [for] our seniors by keeping the promise to protect and strengthen Medicare as we did with our health care bill which we saved — waste, fraud and abuse — 500 billion dollars, extended the life of Medicare by more than twelve years.”

The first myth is that all (or at least the lion’s share) of the projected Medicare savings from ObamaCare over the next ten years will come from combating waste, fraud and abuse and not in reductions to seniors’ services and benefits.

The reality is that this is so far from the truth that it deserves the title of a myth. According to the actuaries at the Centers for Medicare and Medicaid Services (CMS) who first projected the $575 billion savings for Medicare over the next ten years, only a tiny fraction of these projected savings — $4.9 billion — would be realized under the category “Fight waste, fraud and abuse.” To suggest otherwise is to perpetrate a myth but this seems to be one that Harry Reid and the rest of the Democrats that he speaks for want you to believe.

The second myth is that projected Medicare savings from ObamaCare will be used to shore up the Hospital Insurance trust fund (HI) and keep Medicare solvent for twelve more years. Here Harry Reid is hoping that you won’t remember the double-counting debate of a year ago.

An excellent account of its ebb and flow by Adam Cassandra of CNSNews.com shows that, as in the former myth, it was CMS actuaries that first brought it to light.

What they charged, simply put, is that the same monies from projected ObamaCare Medicare savings were held by the Administration to be doing two completely different and incompatible things at the same time: shoring up the Medicare Trust Fund to protect its solvency until 2029 (twelve years beyond the then-projected 2017 insolvency date) and paying for ObamaCare’s much-touted extension of health care coverage to 30 million uninsured — the same monies were being counted twice.

Democrats seem never to have adequately responded to these charges of accounting trickery. HHS Secretary Kathleen Sebelius was clearly shown to be wrong when she tried to defend the Administration against the double-counting charge by saying that it reflected an accounting slant unique to the CMS but not shared or endorsed by the Congressional Budget Office (CBO).

As noted blogger Philip Klein of the American Spectator, the CBO shared the same sentiment when: “In a March letter to Paul Ryan, the CBO wrote that a majority of the Medicare savings from the health care law “would be used to pay for other spending and therefore would not enhance the ability of the government to pay for future Medicare benefits.”

So if projected ObamaCare Medicare savings are to go for financing health care benefits for 30 million new recipients — And, after all, wasn’t that the main reason for ObamaCare in the first place? — then it is a myth that those monies will also go toward extending Medicare’s solvency, as Harry Reid has claimed.

Victor Morawski, professor at Coppin State University, is a Liberty Features Syndicated writer.

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