"Romney Claims Obama Was The ‘Only President’ To Cut Medicare, Ignoring Reagan’s Reductions To The Program"
Mitt Romney defended his signature health care reform law during yesterday’s Palmetto Freedom Forum in South Carolina, insisting that the 2006 legislation requiring everyone to purchase insurance coverage would be “one of my best assets.”
“Our bill dealt with eight percent of our population — the people who were uninsured — and said to them, ‘hey, if you can pay don’t count on the government, take personal responsibility,’” Romney said. He articulated some of the differences between his law and President Obama’s approach and accused Obama of being the first president to make cuts to the Medicare program:
ROMNEY: We didn’t raise taxes, Mr. President. You raised taxed $500 billion dollars. We didn’t cut Medicare — one President in modern history cut Medicare, this President. And I’ll say to him, why didn’t you give me a call, and I would have told you what to do right and what not to do. And the critical thing is this, we dealt with 8 percent, he dealt with 100 percent of the American people.
But many presidents have made changes to Medicare since 1965, including Republican idol Ronald Reagan — who initially opposed the creation of the program, likening it to “socialism” and “communism.” But by the 1980s, Reagan, had come around to supporting the measure and instituted a series of reforms which are strikingly similar to some of the payment changes proposed by the Affordable Care Act (policies Romney now refers to as cuts or price controls.)
Reagan instituted DRGs or Diagnosis Related Groups for paying hospitals under Medicare. As David Henderson explains, “the idea was to get out of cost-based reimbursement, which gave an incentive to have high costs, and replace it with a system of prices,” in which hospitals were paid a pre-determined rate for each Medicare admission. “But what made it a system of price controls was that the government, along with DRGs, made it illegal for hospitals to charge even a penny more than the price the government came up with.” As a result of the changes, Medicare saved $49 billion by 1986, far exceeding what even the Congressional Budget Office had predicted.