On the day of Mitt Romney’s 65th birthday, making him eligible for Medicare — though he’s not signing up for it — his campaign has released five questions about Medicare for President Obama, ranging from why the president is “ending medicare as we know it” to why he’s “creating an unaccountable board to ration care.”

The only problem? None of the issues Romney’s questions point out are true. Here’s why:

QUESTION: Why Is President Obama Ending Medicare As We Know It By Allowing It To Go Bankrupt In Less Than 15 Years?

FACT: Medicare is not going bankrupt. The Congressional Budget Office reports that one portion — Medicare Part A or hospital insurance — will become “insolvent.” As Igor Volsky has reported, “Dedicated revenues will not be sufficient to pay all of its bills and the hospital fund will meet about 90 percent of its commitments, rather than the full 100 percent. In the succeeding years that shortfall will slowly widen and then contract, so that in 2085, Medicare could pay out 88 percent of its obligations.” By lowering annual payment updates to providers, savings from the Affordable Care Act will extend the life of the trust fund by nine years.

QUESTION: Why Is President Obama Ending Medicare As We Know It By Funding Obamacare Through $500 Billion In Medicare Cuts For Today’s Seniors?

FACT: The health law does not cut Medicare’s current budget. As ThinkProgress has previously explained, it slows the growth in the program by removing $500 billion from future spending over the next 10 years — not cutting from current senior’s benefits. The cuts help stabilize Medicare by eliminating overpayments and slowly phasing in payment adjustments that encourage greater efficiency. As a result, the law extends the life of the Medicare trust fund by nine years and allows seniors to retain all of their guaranteed Medicare benefits.

QUESTION: Why Is President Obama Ending Medicare As We Know It By Creating An Unaccountable Board To Ration Care For Today’s Seniors?

FACT: The proposal is statutorily prohibited from rationing benefits or increasing co-pays and will go into effect unless Congress acts to alter the proposal or discontinue automatic implementation. And the board will be composed of doctors, economists, and consumer representatives who will be confirmed by the Senate and will be tasked with designing a savings plan if health care spending increases beyond a certain threshold.

QUESTION: Why Is President Obama Ending Medicare As We Know It By Destroying Medicare Advantage For Today’s Seniors?

FACT: Far from destroying Medicare Advantage, the choices available through the program are “stronger than ever,” the White House reported in February. Nancy-Ann DeParle, White House deputy chief of staff for domestic policy, explained that premiums for Medicare Advantage are lower and enrollment has been higher since the Affordable Care Act made the changes to Medicare Advantage, which Republicans derided. “As reported last year, 99.7 percent of people with Medicare still have access to Medicare Advantage plans,” DeParle said.

QUESTION: Why Is President Obama Ending Medicare As We Know It By Ending Access To Care For Today’s Seniors?

FACT: As has been explained, the Afforable Care Act does not cut current benefits, is not disappearing, and has actually expanded options for seniors enrolled in Medicare Advantage. And many presidents have made changes to Medicare since 1965, including Republican idol Ronald Reagan, without ending care for seniors or destroying Medicare. Reagan even instituted a series of reforms that are strikingly similar to some of the payment changes included in the Affordable Care Act (policies Romney now refers to as cuts or price controls).

Republicans routinely claim that shrinking the government’s involvement in health care would eliminate waste, inefficiency and significantly lower health care costs. But during the debate over the Affordable Care Act, these same politicians lambasted Democrats for cutting $500 billion from Medicare and Medicaid, and specifically argued that the government’s overpayments to private health insurance plans participating in Medicare Advantage (MA) were essential for preserving seniors’ access to services — particularly in rural areas. “The fact of the matter is, the bottom line, is that these are 10 million people that are going to lose benefits. And that’s what it boils down to,” Sen. Orrin Hatch (R-UT) warned during the mark-up process in the Senate Finance Committee.

Since President Obama signed reform into law, however, the GOP’s doomsday predictions have gone unrealized, and today a new report from the Government Accountability Office (GAO) shows that some private plans are still abusing the system and reporting higher patient severity than is actually supported by medical records. As a result, the government is paying private insurers substantially more than it spends on traditional fee-for-service Medicare:

GAO found that diagnostic coding differences exist between MA plans and Medicare FFS. Using data on beneficiary characteristics and regression analysis, GAO estimated that before CMS’s adjustment, 2010 MA beneficiary risk scores were at least 4.8 percent, and perhaps as much as 7.1 percent, higher than they likely would have been if the same beneficiaries had been continuously enrolled in FFS. The higher risk scores were equivalent to $3.9 billion to $5.8 billion in payments to MA plans. Both GAO and CMS found that the impact of coding differences increased over time. This trend suggests that the cumulative impact of coding differences in 2011 and 2012 could be larger than in 2010.

In contrast to GAO, CMS estimated that 3.4 percent of 2010 MA beneficiary risk scores were attributable to coding differences between MA plans and Medicare FFS. CMS’s adjustment for this difference avoided $2.7 billion in excess payments to MA plans. CMS’s 2010 estimate differs from GAO’s in that CMS’s methodology did not include more current data, did not incorporate the trend of the impact of coding differences over time, and did not account for beneficiary characteristics other than age and mortality, such as sex, health status, Medicaid enrollment status, beneficiary residential location, and whether the original reason for Medicare entitlement was disability. [...]

GAO’s findings underscore the importance of both CMS continuing to adjust risk scores to account for coding differences and ensuring that those adjustments are as complete and accurate as possible.

In other words, Republicans were wrong in trying to preserve the government’s subsidies for private insurers during the health care battle and they’d be foolish to stand in the way of more reforms now. Medicare Advantage can only be a viable option for seniors if it can help control health care spending. Eliminating waste, fraud and abuse from the program is crucial to improving Medicare’s sustainability and bending the cost curve.

Politico’s Jonathan Allen recalls Newt Gingrich’s role in urging conservative Republicans to approve the 2003 Medicare Modernization Act, an unfunded expansion of Medicare that provided a drug benefit to American seniors through Medicare Part D. The Congressional Budget Office (CBO) initially estimated that the MMA would add to the deficit by $395 billion between 2004 and 2013 and the actuaries at the Center for Medicare and Medicaid Services (CMS) now project that the program will cost the government $16.1 trillion “through the infinite horizon.”

But ironically, Gingrich convinced Republicans to support the measure by appealing to their sense of fiscal responsibility:

If you are a fiscal conservative who cares about balancing the federal budget, there may be no more important vote in your career than one in support of this bill. Since health expenditures comprise almost 14 percent of the U.S. GDP, a shifting away from the failed bureaucratic third-party payer model and back to a market-mediated binary payer model, where the customer controls his own first health dollars, is the single most significant reform that can be made in saving the country from skyrocketing health costs and steadily increasing calls for taxpayers to finance more and more of the healthcare system through higher taxes.

Gingrich also argued the the measure — which subsidized Medicare Advantage and introduced Health Savings Accounts — would begin to shift more seniors into private programs, noting that “it is a major step toward giving the baby boomers a multi-choice Medicare system for the 21st century.”

That “choice” has come at a cost, however. Private plans that participate in the program receive a 9 percent or $8.9 billion subsidy from the federal government and have so far produced few savings. Over the years, a number of government reports and independent estimates have found that some plans use the taxpayer subsidies to pad their bottom lines and expose beneficiaries to serious financial risks. A recent report from the Government Accountability Office (GAO) concluded that some MA plans used lower premiums to attract healthier enrollees, but then hit them “with high and unexpected out-of-pocket costs.”

Average Medicare Advantage premiums will decrease by 4 percent in 2012 and enrollment in the program will grow by 10 percent, the Department of Health and Human Services (HHS) announced today, undermining Republican claims that reductions in government payments to private insurers will devastate the program. Plan enrollment is “the highest overall enrollment of beneficiaries as a percent,” CMS Deputy Administrator and Director Jonathan Blum said, predicting continued growth into the future. Just one percent of beneficiaries will have to enroll in a new plan because their existing policies are no longer available.

Throughout the health reform debate, however, Republicans argued that lowering the subsidy to private insurers participating in Medicare Advantage — the Affordable Care Act eliminates $145 million over 10 years from the program — would force companies to stop offering coverage, causing 10 million seniors to lose their Medicare benefits. Republicans introduced numerous amendments instructing Congress to remove the cuts to the Medicare Advantage program and Sen. John McCain (R-AZ) even urged seniors to rip up their AARP cards in protest of the organization’s support for the reductions.

Executives from firms that participate in Advantage recently told the Kaiser Family Foundation that even with the cuts, “the amount of money that flows to Medicare plans is significant. A single Medicare enrollee draws about $910 a month for private plans, according to Barlcays Capital analyst Joshua Raskin. Plans expect to earn about $41 a month per member, after paying medical expenses. That’s more than double the average earnings from commercially insured members, according to Raskin’s analysis.” The analyst said “he expects plans to continue to remain profitable and grow, despite the cuts, albeit more slowly than they would have without the health law.”

The enrollment figures also exceed projections by the Congressional Budget Office and the Medicare Trustees, both of which predicted that 2012 enrollment would only increase to 10.2 million and 12.1 million respectively.

One of the most common Republican narratives during the health care reform debate argued that lowering the subsidy to private insurers participating in Medicare Advantage would force companies to stop offering coverage, causing 10 million seniors to lose their Medicare benefits. Republicans introduced numerous amendments instructing Congress to remove the cuts to the Medicare Advantage program and Sen. John McCain (R-AZ) even urged seniors to rip up their AARP cards in protest of the organization’s support for the reductions.

But on Friday, a new report from the Kaiser Family Foundation found that the GOP’s dire predictions are not coming true. In fact, “enrollment in Medicare Advantage continued to rise despite changes in the law that froze Medicare Advantage payment rates to 2010 levels”:

Despite concerns about the effects of the 2010 health reform payment reductions on Medicare Advantage plans, enrollment has continued to rise, average premiums have declined, and many large national firms are keeping a strong foothold in this marketplace. As in past years, Medicare Advantage enrollees appear to be attracted to plans as a source of relatively affordable supplemental coverage, with lower premiums than beneficiaries typically pay for Medigap supplemental policies.

The Affordable Care Act — which cut $145 million over 10 years from Medicare Advantage– froze the 2011 reimbursements to health plans at 2010 levels, meaning that insurers were paid 10 percent more than rates to health care providers in traditional Medicare, compared with 13 percent more in 2009. Beginning in 2012, the growth in payments will continue to decrease by different amounts in different parts of the country. But ultimately, offering benefits will still be profitable, Democrats argued, and will encourage inefficient Medicare Advantage plans to follow the model of the efficient plans without undermining access to guaranteed benefits. The law also introduced a system of bonus payments to reward plans with superior performance.

Executives from firms that participate in Advantage told Kaiser that even with the cuts, “the amount of money that flows to Medicare plans is significant. A single Medicare enrollee draws about $910 a month for private plans, according to Barlcays Capital analyst Joshua Raskin. Plans expect to earn about $41 a month per member, after paying medical expenses. That’s more than double the average earnings from commercially insured members, according to Raskin’s analysis.” The analyst said “he expects plans to continue to remain profitable and grow, despite the cuts, albeit more slowly than they would have without the health law.”

Republicans like to tout the miracle of competition in lowering health care costs and have even proposed a budget in the House that would completely dismantle the traditional government-sponsored Medicare program and force seniors to buy insurance from an exchange of private insurers. But seniors already have the option of purchasing private coverage through Medicare Advantage and that system — which receives a 9 percent or $8.9 billion subsidy from the federal government — has produced little savings.

The Incidental Economist’s Austin Frakt links to this chart and argues that if he were a proponent of so-called “market driven” health care, “I’d be infuriated or embarrassed by this abysmal performance of MA plans. As a taxpayer, I’m none too happy“:

Clearly this figure shows us very little about what happened between 1997 and 2004. Feel free to presume that the program saved Medicare so much money in those years that it offset the documented massive costs in other years, but I doubt you’d find many serious scholars agreeing with you. No, on the whole, the program has cost us and cost us dearly.

Look:

Over the years, a number of government reports and independent estimates have found that some plans use the taxpayer subsidies to pad their bottom lines and expose beneficiaries to serious financial risks. A recent report from the Government Accountability Office (GAO) concluded that some MA plans used lower premiums to attract healthier enrollees, but then hit them “with high and unexpected out-of-pocket costs.” It’s an embarrassing record indeed and one that Republicans seek to build on.

Rick Santorum kicked off his campaign today by misrepresenting Rep. Paul Ryan’s Medicare plan and then lying about the effects of his own proposal. Santorum, who actually wants to accelerate the cuts in the GOP’s Medicare proposal, appeared on ABC’s Good Morning America to make the big announcement, but when pressed by host George Stephanopuolous on why he would want to change Medicare for current seniors, Santorum argued that seniors are already familiar with the changes he’s proposing:

STEPHANOPOULOS:You mentioned Congressman Ryan’s budget plan. It appears that you want to go farther than Congressman Ryan. You have criticized him for not applying his changes to Medicare, which Democrats say would end medicare as we know it. You would say to people 55 and older, yes, your Medicare will be changed as well?

SANTORUM: Well, remember, George, almost 25% of seniors right now have what the Ryan plan is. It’s called Medicare Advantage. And in fact that number was growing up until Barack Obama slashed the program.

STEPHANOPOULOS: But that’s an option.

SANTORUM: Well, the point is, Seniors were able to take money and go out and purchase insurance. And by the way, the seniors most likely to do it were lower income, less educated consumers. Why? because they thought it was a better deal. And the drug program, Medicare Part “D” is exactly the Ryan program. In other words, seniors get resources from the federal government, the seniors go out and make choices. No senior believes they’re being thrown off a cliff. It’s working wonderfully. Seniors love it.

Watch it:

But one can’t compare Medicare Advantage and the Ryan plan. Currently, the 25 percent of seniors who are enrolled in Medicare advantage have a choice of various private plans and traditional free-for-service Medicare. Ryan, would end the traditional Medicare option and force future seniors to purchase private insurance with “premium support” vouchers that depreciate over time. That’s the exact opposite of the Advantage program in which government payments to Medicare Advantage plans per enrollee actually averaged 109 percent of fee-for-service costs in 2010! A similar distinction applies to Medicare Part D. As Austin Frakt explains:

All Part D plans (PDPs and the drug portion of MA plans) submit bids for the cost of standard coverage. From these bids a nationwide average is computed and a statutorily determined fraction of this average cost is set as the “base premium.” Finally, a plan’s premium (charged to each enrolled beneficiary) is the base premium plus the difference between that plan’s bid and the national average bid. Thus, ignoring adjustments for beneficiary risk and other details (found here) a plan is paid by Medicare a fixed monthly per-beneficiary rate equal to the national average bid less the base premium. Because the payment is tied to national average bids (a market signal) this is a form of competitive bidding.

No such system exists in the Ryan plan or under Santorum’s expansion proposal. Under those plans, seniors would be receiving less support every year, regardless of increasing health care costs.

One of the most common Republican narratives about the new health care reform law argued that eliminating the subsidy to private insurers participating in Medicare Advantage would force insurers to stop offering coverage, causing 10 million seniors to lose their Medicare benefits. Throughout the debate, Republicans introduced numerous amendments and motions instructing Congress to remove the $136 billion in cuts to the Medicare Advantage program. Sen. John McCain (R-AZ) even urged seniors to rip up their AARP cards to protest the organization’s support for the bill. But yesterday, the Washington Post’s Amy Goldstein has yet another article pointing out that the GOP’s fear were overstated — “Premiums have not jumped substantially, and benefits have not tended to erode”:

Insurers’ premiums for Medicare customers are, on average, rising by a smaller amount for 2011 than for this year and in 2009, according to Kaiser. And widespread reductions in medical benefits have not occurred, federal health officials said.

“What we are seeing is a very strong commitment to the program” by health plans, said Jonathan Blum, director of the CMS’s Center for Medicare. Blum said that insurance executives with whom he has met have told him they expect to enroll more Medicare patients for the coming year – despite recent predictions by the Congressional Budget Office that enrollment would dip.

Outside the Obama administration, many fear that the smooth experience will not continue for long. “It may be a little early,” said David Certner, legislative director for AARP, the influential lobby for Americans 50 and older, which sells coverage to its eligible members under Medicare Advantage. “A lot of these changes . . . don’t kick in until next time around. We’ll see what the impact is.”

A main reason lies in the federal payments. For 2011, the reimbursements to health plans will be frozen at the same level as this year, meaning that the typical plan will be paid 10 percent more than rates to health-care providers in traditional Medicare in the same community – compared with13 percent higher in 2009.

The law’s deeper financial impact on insurers is scheduled to begin taking effect in 2012. That is when the law starts to ratchet down the increases in payments- by different amounts in different parts of the country – over several years. “It’s not going to be possible to keep current benefit levels and premiums where they are today when these massive cuts go into effect,” predicted Robert Zirkelbach, spokesman for America’s Health Insurance Plans, the industry’s main trade group. Congressional budget analysts predict that 3 million fewer people will be in Medicare Advantage by 2019.

It is, in fact, unclear is how insurers will respond to the cuts in 2012 and what effect the government’s decision to expand the system of bonuses has had on present plan participation.

I’ve neglected this story on the blog — Austin Frakt however, has been covering it very well over at the Incidental Economist. Basically, the health care law awards bonuses to Medicare Advantage plans rated four or five stars for quality (approximately 1 in 6 plans). CMS recently unveiled a 3-year expansion of the bonus payments program to include three-star rated plans (approximately three-quarters of the plans in Medicare). The problem is that expanding the bonus program discourages plans from improving quality and establishes the precedent and expectation of rewarding poor plans. That could cost the government much more than the estimated $1.3 billion 3-year expansion and keep plans in the program for all the wrong reasons.

Center for Medicare and Medicaid Services (CMS) Chief actuary Rick Foster has sent a letter to Sen. Chuck Grassley (R-IA) arguing that the health law’s reduction in subsidies to private Medicare Advantage plans will eliminate some benefits in the Medicare Advantage program and increase co-payments:

The new provisions are expected to reduce MA rebates to plans and thereby result in less generous benefit packages….Prior to this legislation, the average annual MA rebate was estimated to grow from $1,093 in 2010 to $1,580 in 2019. Under the new provisions, the average MA rebate is expected to decline from its current level to $43 in 2019.

As indicated in the table, the reduction in MA rebates will cause a large increase in the out- of-pocket costs incurred by MA enrollees. This impact will be partially offset, however, by the effect on such costs from the Medicare fee-for-service provisions in the Affordable Care Act, which include reduced cost sharing for Medicare Parts A and B, lower Part B premiums, and the filling in of the Part D coverage gap…. The overall results are a decrease in beneficiary out-of-pocket spending of $30 for 2010 and then significant increases in such costs beginning in 2011 and reaching an estimated $873 in 2019.

To be clear, the government is lowering rebates to Medicare Advantage plans (which receive payments that are on average 19% higher than traditional Medicare) because the extra dollars don’t always lead to improved care. In fact, over the years, a number of government reports and independent estimates have found that some plans use the extra dollars to, pad their bottom lines and expose beneficiaries to serious financial risks. For instance, a recent report from the Government Accountability Office (GAO) concluded that some MA plans used lower premiums to attract healthier enrollees, but then hit them “with high and unexpected out-of-pocket costs.”

The expectation is that by phasing out the subsidy, reform will force inefficient MA plans to become more efficient. Those that do, will receive a 5 percent bonus on top of their competitive bid to pay for the extra benefits.

Regulators will certainly monitor the changes to the system to ensure minimum disruption, but as HHS Secretary Kathleen Sebelius writes in her own letter to Grassley, some of the fears surrounding MA are already unfounded. In fact, despite Foster’s predictions, the actual MA premium bids for 2011 show that “99.7 percent of Medicare beneficiaries who have access to a Medicare Advantage plan today will have access to a a Medicare Advantage plan in 2011.” Premiums will decline by 1 percent in 2011 compared to 2010 and “Medicare Advantage enrollment is projected to rise in 2011 by 5 percent,” Sebelius wrote, noting that “these are not my projections or those of the CMS Chief Actuary; the come from the health plans themselves, which predict that Medicare Advantage plans will offer numerous affordable options with improved benefits often at a lower premium.” (H/T: Politico Pulse)