• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Obamacare Robs Medicare of $716 Billion to Fund Itself

    Last week, a new Congressional Budget Office (CBO) report updated the amount of money Obamacare robs out of Medicare from $500 billion to a whopping $716 billion between 2013 and 2022.

    According to the CBO, the payment cuts in Medicare include:

    • A $260 billion payment cut for hospital services.
    • A $39 billion payment cut for skilled nursing services.
    • A $17 billion payment cut for hospice services.
    • A $66 billion payment cut for home health services.
    • A $33 billion payment cut for all other services.
    • A $156 billion cut in payment rates in Medicare Advantage (MA); $156 billion is before considering interactions with other provisions. The House Ways and Means Committee was able to include interactions with other provisions, estimating the cuts to MA to be even higher, coming in at $308 billion.
    • $56 billion in cuts for disproportionate share hospital (DSH) payments.* DSH payments go to hospitals that serve a large number of low-income patients.
    • $114 billion in other provisions pertaining to Medicare, Medicaid, and CHIP* (does not include coverage-related provisions).

    *Subtract $25 billion total between DSH payments and other provisions for spending that was cut from Medicaid and CHIP.

    In total, Obamacare raids Medicare by $716 billion from 2013 to 2022. Despite Medicare facing a 75-year unfunded obligation of $37 trillion, Obamacare uses the savings from the cuts to pay for other provisions in Obamacare, not to help shore up Medicare’s finances.

    The impact of these cuts will be detrimental to seniors’ access to care. The Medicare trustees 2012 report concludes that these lower Medicare payment rates will cause an estimated 15 percent of hospitals, skilled nursing facilities, and home health agencies to operate at a loss by 2019, 25 percent to operate at a loss in 2030, and 40 percent by 2050. Operating at a loss means these facilities are likely to cut back their services to Medicare patients or close their doors, making it more difficult for seniors to access these services.

    In addition, as MA deteriorates under Obamacare’s cuts, many of those who are enrolled in MA (27 percent of total Medicare beneficiaries) will lose their current health coverage and be forced back into traditional Medicare, where Medicare providers will be subject to further cuts. The Centers for Medicare and Medicaid Services chief actuary predicted in 2010 that enrollment in MA would decrease 50 percent by 2017, when Obamacare’s cuts were estimated at only $145 billion. Now that the cuts have been increased to $156 billion (or possibly $308 billion, as the Ways and Means Committee estimates), MA enrollment will surely decrease even further.

    But Obamacare’s raid of Medicare doesn’t stop with cuts; it includes a redirection of tax revenue from the Medicare payroll tax hike in Obamacare. The payroll tax funds Medicare Part A, the trust fund that is projected to become insolvent as soon as 2024. Obamacare increases the tax from 2.9 percent to 3.8 percent, which is projected to cost taxpayers $318 billion from 2013 to 2022. However, for the very first time, Obamacare does not use the tax revenue from the increased Medicare payroll tax to pay for Medicare; the money is used to fund other parts of Obamacare, much like the $716 billion in cuts are.

    With a raid on Medicare of this magnitude, President Obama’s assertion that his new law is protecting seniors and Medicare is astonishing. The truth is that Obamacare does the opposite.

    Posted in Obamacare [slideshow_deploy]

    25 Responses to Obamacare Robs Medicare of $716 Billion to Fund Itself

    1. Terry in GA says:

      This article should be reprinted and sent to each and every senior citizen and medicare recipient to make certain they are aware of the magnitude of ObamaCare. Taking from retired and disabled Americans to redistribute to free birth control and abortion services of welfare and illegal population should be criminal. Nothing spells SCAM more accurately than this report.

    2. inthewoods says:

      This is a very misleading post. These are not "cuts" – these are reductions in spend on those areas based on the ACA being implemented. Meaning, the CBO projects that as a result of the ACA, we will spend less on Medicare.

      • Dave Juncer says:

        Respectfully, BS. This is a transfer of funding from the elderly to the welfare population- a population which is younger, but not necessarily more productive.

        • inthewoods says:

          Respectfully, you're just wrong – this is an analysis of the costs of Medicare and what would have to be spent going forward, not a statement from the CBO about what funds would disappear from Medicare. Thus, these are not cuts – these are funds that will not be needed as the ACA gets adopted.

          • zeke440 says:

            "respectfully"… wow… When Funds that are collected from my paycheck to pay for "medicare" … are "transrerred to ObamaCare"… that is a CUT in any man's terms to the Medicare reciepient… Robbrey would be a better term… But then Liberals have been Transferring SSA and Medicare moneys all along… the Moneys are in the General Fund for Congress to spend for anything since the 60's… Today we can see the theft at the stroke of a few keys… we dont have to wonder why the MSM didn't tell us after the system goes broke…

      • reducing of something: the decreasing of something in size, number, extent, degree, or intensity…….Synonyms: discount, decrease, lessening, drop, saving, bargain, fall, decline, diminution, cutback, cut….. inthewoods, you must be a democrat!! guess you really wanted to know the definition of sex as well, eh? enjoy your dinner at Chick fil a

        • peaceman says:

          Are you really…goodenough??? To understand what is basic and clear??? ACA has afforded Medicare $716B in SPENDING CUTS, not in benefits. The CBO estimated this amount in a 'reduction in projected spending.' This article is completely bogus for suggesting that Medicare is being gutted by this amount…TOTAL BS!!

          Zeke…get a grip! The taxes coming from your check go directly to Medicare; the ACA is a system that supports the functioning of the program and is holding providers, suppliers and insurers to be more accountable.

    3. philjourdan says:

      Doctors are not going to work for free. Obamacare is merely the first step in the complete nationalization of health care. First you create the problem, then you nationalize it as the solution. LIberals have been doing that since the beginning.

    4. BudH says:

      I wouldn't care about this at all if the Medicare law didn't make it illegal for me to continue with my Health Savings Account. My insurance company was forced to switch me to a spending account after I turned 65. I'm four years older now, and still refuse to use Medicare.

      • Guest says:

        I'd be interested in hearing how you're *avoiding* using Medicare. If you're retired, then Medicare is your primary insurer EVEN IF you have retiree medical benefits from your former employer. About the only way around that is to be covered under a spouse's or family member's insurance, and even then, Medicare is your secondary.

        Tell you what. Call up your health insurer, explain your situation to them and tell them you refuse to use Medicare, even when it's supposed to be the primary. Then report back to us on how they respond. IMO, they'll drop you, because as a Medicare enrollee, you'd still have coverage and therefore would be eligible for the droppin'.

    5. ichthusthree says:

      sorry to say folks, but the PPACA does little if anything to help the senior population in the long run — and because of this "law" my MA has already started rationing coverage for what med's i can & cannot have through them — i was on a certain medication for over 20 years and last year they have decided that it is "not medically necessary" — so now instead of being able to take Zomig (extremely expensive) for my migraines i have to just go to bed for days & be totally unproductive anymore — that's not the only one either but too long a story for here — PPACA ia a bad law with only a few good ideas in it — but that's how they pass all these bad laws, they put in a few good thing & only talk about that & sway the public that way to get behind the bills to get passed — way too few people even know what goes on in DC on Capitol Hill anymore & some that do don't even care

    6. to everyone that thinks Obamacare is a good policy … quit BSing us Obama. so it’s ok to rob money from the senior citizen’s medicare as long as it funds your dumb Obamacare? just because they (senior citizens) don’t have that much longer to live, it’s ok to take their medicare money. the money that they’ve worked hard for. I don’t even respect you as a president of the USA…

    7. The hypocrisy of the pot calling the kettle black. Claiming that the Ryan plan would cut medicare. When in reality the Democrats in Congress and President is responsible for the largest withdrawal of funds from medicare in history

    8. tyler says:

      By quick scan on the numbers, it apparently "looks" for most of the cuts are coming from close-to-end care, which the IPAB will probably play a big role in determine these proposed reductions. Pres. Obama and the Dems have no plan on how to reform the system. This is the only way for them to sustain it for a short-term goal with no long-term objectives. It is kind of ironic that he and his followers are claiming to champion the sick, the poor, and vulnerable, which is most of our seniors. In doing this, they are "shortening" their lives in the name of saving the system. I hope they have a plan to help these people to have a dignify way to die. This is the way of rationing care like the NHS in Great Britain. However true it is that most of the medical costs occurred in the latter end for most of the seniors. That being said, we need to find a way to improve the system and not playing god by a few "intellectualizers" to decide who will live and who will die.

    9. If your a senior or have friends or relatives that are seniors you need to read this and share it with them.

    10. Cathy Anderson says:

      Medicare needs to be reformed and compared to the Ryan reforms once again President Obama’s way exudes common sense and intelligence. The APA will save trillions of dollars due to preventative care allowing illnesses to be caught early before they become chronic & expensive. This is not just for seniors but for all. We will have a healthier nation and a cost effective health care system once it is all in effect. The Ryan budget just says here’s a voucher when you use that up you’re just fat out of luck. Oh and when you do need care sorry we had to fire all the nurses(not to mention all the fireman,policemen,and teachers).

    11. I wish this report would be sent to every person receiving Social Security and Medicare.

    12. Bryant says:

      From the comments that I have read on this site I have one question? Have any of you actually done any research on the Medicare debate or do you just regurgitate what you are told. It is true that the Affordable Care Act made some cuts to growth in Medicare spending, but none of the cuts were to benefits for seniors. In fact, the law gives seniors more help paying for subscription drugs and eliminates co-payments for a number of preventive health services. Neither Obama's or Romney's plan affect seniors. Did you also know that Romney/Ryan are trying to get a fast one by you. If you are 55 or younger you are pretty much screwed under their plan because it turns it into a voucher plan. You guys honestly need to do your homework!!!!

      • Perfectlyaged says:

        Google IPAB and see how the senior citizens will be on the end of the line in receiving treatment . The IPAB fifteen member board will make the decision who gets treatment and who doesn't. My own doctor is retiring from his medical practice because he says the IPAB takes away the doctor/patient relationship and tells the doctor what he can/can not do for his patient.

    13. Henry says:

      Hospice and Home Health aren't for seniors? Who knew? Also, the vouchers are OPTIONAL. (Optional means that you have an option)

    14. Mike Cascketta says:

      I find this article very humorous…we rob it to fund it? If I take money from anywhere and put it back? Please tell me what I am missing in this article? Does the Ryan plan take the same funds and use them the same way…I'll vote for that! C'mon I'm indepentdent so I will take it for fact!

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.