Sen. Tom Coburn (R-OK) inadvertently referred to prominent Republicans like Paul Ryan, Mitt Romney, and Eric Cantor as liars during an interview with Oklahoma’s News on 6 Thusday night. “Any politicians that stands up and says, ‘We’re not going to touch your Medicare’ is a liar,” Coburn said, apparently forgetting that the GOP has used the talking point as a center piece in their campaign to sell Medicare premium support to the public. Watch Coburn’s remarks:

The GOP has repeatedly argued that it would preserve benefits for existing seniors:

– PAUL RYAN: “If you take a look at our reforms…[they] don’t change any Medicare benefits for a person 55 or above.” [Fox News, 1/29/2012]

– MITT ROMNEY: “We will never go after Medicare or Social Security. We will protect those programs.” [TPM, 1/31/2012]

– ERIC CANTOR: “To today’s seniors, those 55 and older, we’re not going to touch those programs. For the rest of us, we realize these programs won’t be around in their current state and we have to change the nature of those programs for the rest of us.” [CNBC, 4/13/2011]

It’s very very likely that beneficiaries 55 and older would see changes in their Medicare benefits under Ryan’s plan. In 2022, newly-eligible seniors would have to enroll in a private plan, but existing beneficiaries (those who are over 55 today) would also have the option of leaving traditional Medicare. That opens up the possibilities of private plans trying to lure away the healthiest beneficiaries (as is currently the case in Medicare Advantage) and of health care providers abandoning traditional Medicare patients for the higher reimbursement rates of private insurers. For chronically ill seniors who are more likely to remain in fee-for-service Medicare this means two things: higher costs (as the healthier beneficiaries exit the risk pool) and fewer doctors.

The Affordable Care Act has produced $2.1 billion in prescription drug savings for nearly 4 million seniors and people with disabilities who were enrolled in Medicare Part D in 2011, a new Obama administration report finds. The savings are the result of a provision in the health care law that provides a 50 percent discount for brand-name drugs and 14 percent discount for generic brands to Medicare beneficiaries in the so-called “doughnut hole.” Seniors can expect greater savings as the law completely closes the coverage gap over time.

The average Medicare enrollee will save approximately $4,181 from 2011 to 2021, while those with high prescription drug costs could save as much as $15,710 over the same period. Those with low drug costs should save roughly $2,964:

The report identifies three other sources of savings for Medicare recipients: 1) premiums for Part B physician and certain other services are expected to increase at a slower rate, 2) beneficiary copayments and coinsurance under Part A and B will increase more slowly because the Affordable Care Act slows the rate of growth in payments to hospitals and other providers, and 3) offer seniors preventive services at no additional cost.

Yesterday, the administration announced that a growing number of seniors are enrolling in Medicare Advantage plans and are paying lower premiums as compared to last year.

– Fatima Najiy

Outlays for Medicare, Medicaid and “other mandatory federal programs related to health care accounted for just under 40 percent of mandatory spending in 2011,” the Congressional Budget Office reported today and will continue to grow into the future. For instance, a boost in the number of beneficiaries will increase Medicare spending to more than $1 trillion by 2022, reflecting 4.2 percent of the Gross Domestic Product, (GDP) and raise Medicaid spending to $605 billion:

Interestingly, the growth in Medicare spending per beneficiary over the 2012–2022 period will only average “1 percent a year more than the rate of inflation” — compared to a 5 percent a year growth between 1985 and 2007 — as a result of “the anticipated influx of younger, healthier beneficiaries” and the constraining effects of the SGR formula and the limits on updates to payment rates for other services,” the CBO projects. Per-beneficiary spending will increase thereafter as a result of “rising drug costs” and “more generous benefits enacted in the Affordable Care Act.” Outlays will increase if Congress patches the Sustainable Growth Rate (SGR) and prevents a scheduled 27 percent fee reduction for Medicare doctors in March 2012, as lawmakers have pledged to do. “If payment rates stay as they are now through 2022, outlays for Medicare (net of premiums) would be $9 billion higher in 2012 and about $316 billion (or about 5 percent) higher between 2013 and 2022,” CBO concludes.

Expenditures on Medicaid, on the other hand, will decrease in 2012 “as states become responsible for a higher share of total costs than had been the case in recent years.” The program grow steadily between 2014 an 2016, when more lower-income Americans become eligible for Medicaid under health care reform. By 2022, about “95 million people will be enrolled in Medicaid at some point in the year, CBO estimates.”

MSNBC’s Joe Scarborough tore into Mitt Romney this morning for falsely claiming that President Obama is the only president “in history that’s cut Medicare by $500 billion” and scaring senior citizens about the future of the program. “It’s pathetic!” Scarborough exclaimed, before pointing out that Romney himself supports large reductions to the program and has endorsed Paul Ryan’s Medicare reforms:

SCARBOROUGH: That is the most shameful demagoguery that I have heard on the campaign trail yet this year. To tell senior citizens that the program that is going to bankrupt America unless we figure out a way to bend the cost curve, is going to be protected forever and can you believe that Barack Obama cut $500 billion from it? It’s just unspeakable…it is unspeakable, because this country is going bankrupt and Mitt Romney is trying to scare senior citizens — you know what? It’s what we called Mediscare in ’95 and ’96. It was pathetic when Bill Clinton did it it’s pathetic when Mitt Romney does it, it’s pathetic when he does it because of Medicare Advantage. Pathetic.

Watch it:

“And Mitt Romney’s on record as supporting Paul Ryan’s plan, which as far as I remember it, actually takes huge, makes huge savings/cuts to Medicare,” New York Magazine’s John Heilemann added. Indeed, the Ryan plan fundamentally transforms Medicare’s structure into a guaranteed contribution program, significantly reduces its growth rate, and actually maintains many of the savings included in the Affordable Care Act. Romney himself has introduced very similar reductions as part of his own Medicare proposal.

During an appearance on Fox News Sunday, Rep. Paul Ryan (R-WI) pledged to reintroduce his plan to privatize Medicare as part of the GOP’s budget plan in March. “I would simply say, there’s an emerging bipartisan consensus that we’re on the right track,” Ryan told host Chris Wallace. “And the point is, we should be offering solutions to our problems in our country. We shouldn’t just be demagoguing other people and offering no solution.”

Ryan would do well to follow his own advise, as the indignant House Budget Committee chairman grossly misrepresented the Affordable Care Act and the details of his own Medicare premium support solution. Below is a brief fact check:

CLAIM — MEDICARE WILL GO BANKRUPT: “The Congressional Budget Office also says Medicare is going bankrupt in 2021. The trustees at Medicare say that there’s $37 trillion unfunded liability.”

FACT: The CBO says that one part of Medicare — Part A or hospital insurance — will become “insolvent,” not bankrupt. 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, the program’s trustees conclude. The savings in the ACA — lowering annual payment updates to providers — has actually extended the life of the trust fund by nine years.

CLAIM — NOTHING CHANGES FOR CURRENT SENIORS: “If you take a look at our reforms, which don’t change any Medicare benefits for a person 55 or above, and says for people 54 and below, when they’ll retire, they’ll have a list of guaranteed coverage options over by Medicare just like we do it in Congress and federal employees have, and we’re not going to subsidize the wealthy as much as everybody else.”

FACT: It’s likely that beneficiaries 55 and older would see changes in their Medicare benefits. In 2022, newly-eligible seniors would have to enroll in a private plan, but existing beneficiaries (those who are over 55 today) would also have the option of leaving traditional Medicare. That opens up the possibilities of private plans trying to lure away the healthiest beneficiaries (as is currently the case in Medicare Advantage) and of health care providers abandoning traditional Medicare patients for the higher reimbursement rates of private insurers. For chronically ill seniors who are more likely to remain in fee-for-service Medicare this means two things: higher costs (as the healthier beneficiaries exit the risk pool) and fewer doctors. Ryan’s proposal also does not resemble the “coverage options” of federal employees, because his “premium support” payments do not keep up with health care costs. The FEHBP’s do.

CLAIM — ACA WILL RATION CARE: “Put that in comparison to the president’s health care law. This year, he appoints 15 unelected, unaccountable bureaucrats to a board called the IPAD, Independent Payment Advisory Board, and their job is to put price controls and therefore rationing on Medicare for current seniors. So, the president’s law takes half a trillion dollars out of Medicare to spend on Obamacare and now he’s putting this new rationing board in place, which will lead to denied care to current seniors.”

FACT: The 15 members of the IPAB are appointed by the President, but confirmed by the Senate. The group is tasked with making binding recommendations to reduce expenditures in the Medicare system, unless Congress acts to alter the proposal or discontinue automatic implementation. Significantly, their proposal to reduce spending cannot “include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums…increase Medicare beneficiary cost- sharing (including deductibles, coinsurance, and co- payments), or otherwise restrict benefits or modify eligibility criteria” (Section 3403 (page 409) of the Affordable Care Act stipulates.)

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

Politico’s Jonathan Allen and Manu Raju have an interesting report detailing Democrats’ frustrations over Sen. Ron Wyden’s (D-OR) decision to join hands with Rep. Paul Ryan (R-WI) and offer a bipartisan Medicare premium support plan that, while certainly not as radical as the original GOP blueprint, would likely increase costs for seniors and put the program on the road towards greater privatization.

You can read the full policy analysis of Wyden’s proposal here and here, but Democrats are worried that Wyden is also undermining the politics of Medicare reform by providing Republicans with “bipartisan” cover for their ultimate goal — complete privatization of the Medicare program:

“It neutralizes the weapon,” Sen. John Cornyn, chairman of the National Republican Senatorial Committee, said in an interview. [...]

Asked if there was frustration among Senate Democrats with Wyden over Medicare, Senate Majority Whip Dick Durbin (D-Ill.) told POLITICO: “I’ve heard that sentiment expressed.” But he quickly added that he’s also heard “some say that initiating a bipartisan conversation that will preserve Medicare is worthwhile. So let’s see if the Ryan-Wyden approach meets that test.”

Privately, the criticism is more biting. “Democrats believe in Medicare and, rather than bolster it, Wyden undermined a great issue for us all so he could grab a couple of headlines,” one furious Democratic source said. “Just embarrassing.”

Wyden stresses that his plan preserves traditional fee-for-service Medicare as an option for seniors — and it does, while also shrinking its impact and market power and undermining its effectiveness. What’s even more troubling, however, is that Wyden is cashing in one of the Democrats’ most important chips in this debate: Medicare’s large market power and success in containing health care costs. He is accepting the GOP’s alarmism about Medicare’s future — which isn’t nearly as dire as they suggest — and laying Medicare on the table as a legitimate target for further cuts. That kind of approach not only muddles the Democrats’ political message (we will strengthen this efficient government-sponsored program, while Republicans aim farm it out to private insurers), but also greatly increases the likelihood of greater privatization and coverage erosion in the future.

Gov. Mitch Daniels’ (R-IN) Republican response to the State of the Union address faulted President Obama for failing to admit the “grave” state of the nation and urged lawmakers to “trust Americans enough to tell them the plain truth about the fix we are in, and to lay before them a specific, credible program of change big enough to meet the emergency we are facing.” Daniels highlighted the sorry state of America’s safety-net programs — Medicare and Social Security — and warned that unless “we…save” these initiatives, “these proud programs” will “implode”:

“There is a second item on our national must-do list: we must unite to save the safety net. Medicare and Social Security have served us well, and that must continue. But after half and three quarters of a century respectively, it’s not surprising that they need some repairs. We can preserve them unchanged and untouched for those now in or near retirement, but we must fashion a new, affordable safety net so future Americans are protected, too. [...]

“The mortal enemies of Social Security and Medicare are those who, in contempt of the plain arithmetic, continue to mislead Americans that we should change nothing Listening to them much longer will mean that these proud programs implode, and take the American economy with them. It will mean that coming generations are denied the jobs they need in their youth and the protection they deserve in their later years.

Watch the speech:

The comments were meant to lay the groundwork for the GOP’s renewed push for Medicare privatization, a rebranded effort — hinted at last week by House Speaker John Boehner (R-OH) — to cloak Rep. Paul Ryan’s (R-WI) “premium support” plans in bipartisan colors and tout more moderate initiatives that would add more legitimacy to the GOP approach. In reality, Daniels’ rhetoric about Medicare’s impending demise is greatly exaggerated.

As Maggie Mahar has points out, according to the program’s trustees, by 2024 Medicare’s Hospital Insurance (HI) won’t be exhausted, but rather “insolvent” — which simply means that dedicated revenues will not be sufficient to pay all of its bills. The hospital fund will meet 90 percent of its commitments and 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.

That’s hardly an implosion, but it also doesn’t mean that we can allow the program to grow at its current rate. Fortunately, the Affordable Care Act will reduce Medicare spending by $86.4 billion from previous projections and lower the average annual Medicare spending growth by 1.4 percentage points between 2012 and 2019. “By 2019, it is projected to grow 7.7 percent—0.9 percentage point more slowly than we projected in February 2010,” a Center for Medicare and Medicaid Services (CMS) report has concluded.

In fact, far from misleading Americans that “we should change nothing,” Obama has proposed to accelerating 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 — and finding more savings in the Medicare program.

Republicans, however, reject these measures or other reforms that would actually slow Medicare’s growth rate. After all, the success of any of these changes would undermine the political argument for privatization.