GOPAC Chief Misrepresents Medicare Savings In The Affordable Care Act

With the Supreme Court poised to rule on the constitutionality of the health care law this summer, the debate continues over what exactly the law does, with varying degrees of factual accuracy. For example, Frank Donatelli, the chairman of GOPAC, is out with an opinion piece this morning on the “evils” of the health care law:

Start with Medicare. The trustees who run the program have been telling us for some time that the current benefit and financing system is unsustainable. Indeed, its 2010 report notes that the Medicare “trust fund” will be exhausted five years sooner than previous estimates.

The passage of “Obamacare” has made this deplorable situation worse. This law does increase various Medicare taxes and includes some cost-containment features. However, as Medicare’s own actuary has pointed out, “Obamacare” uses the savings not to strengthen Medicare but to start another unfunded entitlement. The changes — a $500 billion cut in the program — do nothing to shore up the existing Medicare trust fund.

The $500 billion in cuts Donatelli is touting is not coming out of the current Medicare budget. Rather, the law slows the program’s growth by reducing spending over the next 10 years,” phasing out overpayments to private insurers in Medicare Advantage, eliminating waste, and lowering annual payment updates to encourage more efficient care.

As a result of these savings, reform improves the sustainability of Medicare — precisely what Donatelli is so concerned about! The latest Medicare trustees report concludes that if Congress had failed to pass the ACA, the Health Insurance Fund would have started to run out out of money in 2016. But because of the law, the trust fund won’t face a shortfall until 2024.

– Zachary Bernstein