On Tuesday, the Huffington Post’s Amanda Terkel reported about a Medicare messaging memo distributed to freshman Republicans in Congress by FreedomWorks, the astroturf tea party group headed by Dick Armey. FreedomWorks urges members to “dispel the myth that if we leave Medicare alone it will stay the same. It won’t. By reforming them we are saving and strengthening these programs for the current and future generations.” “Communicate that Democrats do not have a plan of their own. Hold up a blank piece of paper as a powerful image of their do-nothing approach,” FreedomWorks advised.
This morning during an appearance on Fox News, Sen. Marco Rubio (R-FL) followed the messaging points to a T, fear mongering about Medicare’s imminent demise and claiming that Democrats don’t have a plan to “save” the program:
RUBIO: And unfortunately, Washington is full of people that have no alternative plan. If you’re sincere about saving Medicare, don’t just go around criticizing the Ryan plan, offer your own plan. And right now, nobody in Washington has a plan — it’s the only plan out there that saves Medicare, that doesn’t hurt seniors currently on the plan, and that doesn’t hurt economic growth by raising taxes. If Democrats have a better way to do it, if President Obama has a better way to do it, they should offer it. What are they waiting for?
Stories about Medicare’s impending demise have been greatly exaggerated. As HealthBeat’s Maggie Mahar points out, according to the trustees, by 2024 — the so-called doomsday conservatives are now quoting — the Hospital Insurance (HI) won’t be exhausted. “It will be ‘insolvent’ which simply means that dedicated revenues will not be sufficient to pay all of its bills. But in 2024, as the Trustees make clear, the hospital fund will still be able to meet ’90 percent’ of its commitments. In the years that follow, the Trustees project that the shortfall will slowly widen and then contract, so that in 2085, it will be able to meet 88 percent of its obligations.” As Mahar notes, pundits have long warned of Medicare’s demise:
JULY 2, 1969: “The Medicare hospital trust fund faces bankruptcy by 1976 and taxes must either be raised or benefits reduced the senate finance committee was told today.” [Chicago Tribune]
APRIL 1, 1986: “The Medicare hospital insurance program faces bankruptcy by 1996, two years earlier than projected last year.” [Washington Post]
JANUARY 20, 1985: In the last few years, when it appeared that the Medicare trust fund would run out of money in 1987-89… But the need seemed less urgent after the Congressional Budget Office issued new estimates last September indicating that the Medicare trust fund would not go bankrupt until 1994. [New York Times]
This long history of crying wolf doesn’t mean that we can allow the program to grow at its current rate, however. In fact, the Affordable Care Act — which Rubio voted against — reduced the rate growth of the program. Medicare spending will decline $86.4 billion from previous projections due to reforms and the average annual Medicare spending growth is anticipated to be 1.4 percentage points slower for 2012 to 2019 because of the law. “By 2019, it is projected to grow 7.7 percent—0.9 percentage point more slowly than we projected in February 2010,” a recent Center for Medicare and Medicaid Services (CMS) report concluded.
President Obama, moreover, is now proposing to accelerate those savings by expanding the authority of the Independent Payment Advisory Board (IPAB) — a 15-member commission that would make recommendations for lowering Medicare spending to Congress if costs increase beyond a certain point. Republicans, however, are trying to have it both ways — they’re fear mongering about the growing entailment problem, while opposing any measure that would really slow the programs’ rate of growth.