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  • Morning Bell: How Obamacare Robs Medicare and Hurts Seniors

    The rhetorical Medicare wars have heated up this week, after President Obama declared in his Saturday radio address that his proposed reforms “won’t touch your guaranteed Medicare benefits. Not by a single dime.”

    This is incorrect. Obamacare cuts $716 billion from Medicare over the next 10 years, according to the Congressional Budget Office (CBO), and uses these “savings” from Medicare to fund other entitlement expansions mandated by Obamacare. Medicare becomes a cash cow for Obamacare, and the Medicare “savings” from payment cuts are not put back into making Medicare solvent. Such massive payment cuts do impact Medicare benefits, as well as seniors’ access to those benefits.

    Heritage’s Alyene Senger explains how this hurts America’s seniors:

    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.

    The President also said on Saturday, “As President, my goal has been to strengthen these programs now, and preserve them for future generations.” But Obamacare imposes new taxes on present and future generations—including a hike in the Medicare “payroll tax” affecting upper-income earners that doesn’t even go toward Medicare. Senger details:

    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.

    The same set of dollars “saved” from Obamacare’s massive across-the-board Medicare payment cuts cannot be used to enhance Medicare solvency, reduce the federal deficit, and fund Obamacare’s entitlement expansions all at the same time. This is only a fraction of the dishonesty and budgeting shell games surrounding Medicare.

    The Heritage Foundation advocates reforming Medicare into a premium support plan. What does that mean? Seniors would be given a choice between the fee-for-service Medicare of today or private plans. “Premium support” simply means that the government funding that goes toward their traditional Medicare plan now would be transferred directly to the plan of a senior’s choice, just as it is today in the Medicare drug program that already serves most senior citizens.

    Not only would this change stimulate intense competition to control costs among private health plans, as well as the traditional Medicare program, but it would widen the scope of seniors’ options and give them greater control over their own health care.

    Two important things to note:

    Under all of the major premium-support proposals unveiled on Capitol Hill, traditional Medicare would remain. Seniors would have the right to stay in traditional Medicare or pick a better plan if they wished to do so. To quote President Obama, “If you like your plan, you can keep it”—truly.

    Shifting to premium support would not take away seniors’ benefits. All major versions of premium support guarantee beneficiaries at least the Medicare benefits or the level of benefits they get today. In addition, they would have access to new plans with even higher levels of coverage at competitive prices tomorrow.

    Some liberal opponents of Medicare reform pretend that reforms would suddenly bring private insurers into the mix. In fact, private health plans have been part of Medicare since the 1970s. The New York Times did a good job of explaining that private insurers are working very well within Medicare today—and they are playing a role in expanding benefit options while controlling costs. On August 25, the Times’s Robert Pear reported:

    Even as President Obama accuses Mitt Romney and Representative Paul D. Ryan of trying to privatize and “voucherize” Medicare, his administration crows about the success of private health plans in delivering prescription drug benefits and other services to Medicare beneficiaries.

    More than a quarter of the 50 million beneficiaries receive coverage through private Medicare Advantage plans, mostly health maintenance organizations, and Medicare’s drug benefits are delivered exclusively by private insurers, subsidized by the government.

    Obama administration officials, lawmakers from both parties and beneficiaries have generally been satisfied with the private plans.

    Medicare must be reformed. President Obama has a very different vision of what “reform” means. Join Heritage in debunking Medicare reform myths as this debate continues.

    Saving the American Dream: Medicare

    Quick Hits:

    • According to the National Hurricane Center, Tropical Storm Isaac is forecast to become a hurricane today and to make landfall today and tomorrow.
    • The Democratic National Convention will host an Islamic prayer event, including leaders who have been tied to radical groups, after turning down a prominent Catholic cardinal’s offer to give a blessing at the convention.
    • Despite its official appearance of shutting down, left-wing activist group ACORN still has more than 170 active affiliates, under different names, reports the Washington Free Beacon.
    • A federal government website encourages Americans to apply for government assistance to help them through “difficult financial times,” reports The Examiner.
    • Heritage has a team in Tampa this week to talk about policy ideas and how we’re shaping the debate in Washington. Check out some of our photos on Instagram.
    Posted in Obamacare [slideshow_deploy]

    38 Responses to Morning Bell: How Obamacare Robs Medicare and Hurts Seniors

    1. sdfultz says:

      Dang, The Foundry was so good yesterday, then today you're back to partisian dribble!
      Just Sad.

    2. Moose says:

      Sorry Obama, you can't have it both ways…

    3. Susan Brown says:

      It seems like the Congress or the Senate or the Social security Administration would pursue shutting down the fraud. That should not be a budget item!

    4. Frank Leitnaker says:

      Not being an economist, I am reluctant to stick my neck out but I read statements that are so egregiously counter-intuitive that I must. There is a fallicy, I believe, in the concept of free-market competition for medical insurance in that the industry cannot really control costs and compete on that basis; rather
      they can only control payment whether that be to the providers of goods/service or patients.
      Only the providers can control costs whereas traditional irrational medical insurance is inherently inflationary and is the root cause of the medical care problem and not the solution.

    5. will says:

      Could somebody take a swing at the Obama administration Mediscare talking point that "Seniors will be paying $6,000 out-of-pocket" under the Ryan plan. It's left dangling as the gospel each time it is spewed on/by the MSM. The answer may well be "So what?" $6,000 compared to what, by when? My wife and I each pay about $4500 out-of-pocket right now, so if that $6,000 is in 10 years… sign me up! Even modestly enlightened folks know that in 10 years people who are well off are going to pay much more than $6,000 and those with lower incomes will be need to be subsidized.

    6. Lloyd Scallan says:

      After three and a half years of Obama, can any American expect one word of truth. He feels nothing when he looks into the cameras and lies to our faces. As Amy states "Obama has a very different vision". But not about what reform means, but what truth and honesty means. He was raised and taught in the ways of Marxism and communism. To Obama's way of reasoning, honesty, truthfulness, and Americanism have to be sacrificed for the sake of the cause, He and his lackeys in the Democrat Party will stop at nothing, use anone and/or anyghing, to complete their ageada. Nothing else matters.

    7. Quartercircle says:

      If you check the HHS Secreatary has put the IG out here in the field and in OKlahoma to audit all the hospitals here and other places to cut the over charges to medicare and medicad and giving this audit company a percentage of the money found over charged and most hospitals here are going to have to shut down or cut back on their offerings for the patients that go to these med centers for help and a reduced amount of care because they can not afford to keep the doctors and the doors open for the costs they want for giving medical treatments. What good is all the places around that we need when time arises? Pretty soon we will not have any good doctors and hospitals when needed unless you are a money bag.

    8. Curt Krehbiel says:

      The President also said on Saturday, "As President, my goal has been to strengthen these programs now, and preserve them for future generations."

      Yes, but, if he is given another term everything he has said during the first term becomes null and void.
      The second term will be used for the transformation of America as we have known it to a Communist order. People over 70-75 will be denied medical care in order to provide care to younger healthy workers. The "death panels" described in Obamacare will be very busy. The 2700 page document also contains governmental authority to have access to our savings and retirement accounts without our consent. The masses will become pawns groveling for the means of existence as the United States of America is reduced to equate with other third world nations on this planet.

      This can be prevented only by denying him a second term.

    9. zygote1331 says:

      As usual the "reliable" Heritage folks don't want to tell you that the Ryan plan will take the same $718billion out of Medicare and give it away to tax relief for the upper 1%. So much for the "think" in think tank…..

    10. DMH says:

      If the Republicans want to win the election all they have to do is bring up this one little tidbit about Obamacare.

      A recent Aon Hewitt study conducted of the top 100 employers,over HALF are now considering dropping traditional healthcare coverage offered to their employees and families.

      Please get this to the Romney camp, I do not know another avenue to get this information to them. This will scare the average American out of their mind if there is a stong possibility that they are going to lose their traditional employer-sponsored healthcare.

      I work for a Fortune 50 company and we are looking to get out by 2018 when the Cadilliac Tax hits.

    11. Lew says:

      TO MR.B.O. I ask HAVE you even looked at this OBAMACARE BILL? I think not!

    12. Casey Carlton says:

      It's tough being a senior these days. With the gutting of Medicare to slightly soften the financial impact of Obama"care", and the creation of the death panels to help shorten our lives, we are in a real dilemma.

    13. John Michaud says:

      The only issue I have with this article is my best friend's Mom, who lives only on social security, said the change in Medicare prescription coverage increased her prescription cost AND added the monthly premium, so her costs went up when the program was implemented. There are always unintended consequences, so bureaucrats and representatives need to look carefully at the reforms they propose. Never easy to reign-in an ever-growing governmental monster.

    14. JohnLeeHooker says:

      In a word: DISASTER…saw 2016 over weekend…if you don't have the time/interest in reading Radical-in-Chief this movie is worth the 1.5 hours instead

    15. Ben C. says:

      As if Medicare is a good thing. The reason we are in this mess is the unintended consequences of Congress meddling in a business. Had hospitals not been granted tax exempt status and health care been treated like any other business, competition would have controlled the market place. If insurance companies could compete across state lines their rates would be far more competitive. Sadly, we have generations of people who assume "government knows best" and cannot look beyond the tip of their nose. If Obamacare stands my surgeon friends plan on discontinuing their practices and doing something else. To the person they plan on working 24/7 until 2014 then it's off to retirement or an alternate career. And I had to search to find a physician that accepts Medicare now that I am over sixty-five. Should be interesting in another two years. Yes, I paid into Social Security for the past forty-nine years so I do not consider it an entitlement – I consider it a really bad investment.

    16. DJGolio says:

      His constant lying is disgrace and few in the press have the nerve to call him out on his lies. He must be voted out.

    17. John Howard says:

      How does one respond to this question: apparently the CBO says Romney'/s plan forces Medicare to run out of money in 2016; whereas Obama's raiding of the $716 billion extends Medicare to 2024. I do not understand such math.

    18. Nealstar says:

      “won’t touch your guaranteed Medicare benefits. Not by a single dime.”

      The last time he mentioned the word "dime" wasn't it about how much our taxes wouldn't go up if we made less than $200K/year?

    19. janet says:

      We need to get rid of Obama and Obamacare.He is going after the younger men and women and they have know idea how deceptive this president is.

    20. Nealstar says:

      "won't touch your guaranteed Medicare benefits. Not by a single dime." The last time he said "dime" it was when he said, "If you make less than $200K your taxes won't go up by a single dime." We see how well that's working out…

    21. @IAMPCBob says:

      President Obama is running an old fashioned shell game, using the Medicare money to start up his other great contribution towards our future bankruptcy, ObamaCare. They call Social Security a Ponzi scheme, and here is yet another one! Obama needs to learn the first tenet of becoming a physician: "Do no harm!"

    22. Rodger Mearse says:

      It is a mystery to me how Obama can take money that has been payed into medicare not by the government but by citizens and just give it to a bunch of illegals that have not even payed in any kind of taxes. I have been paying taxes since I was 16 and now when I am about to start looking for some of it to come back to me it seems he has stolen it. If a bank president used money like that it is a felony , I fail to see the difference one crook is like any other and should be prosocuted as such.


    23. PJVEE says:

      PLEASE, PLEASE, I'm all for Gov. Romney's medicare plan but explain exactly how the voucher system will work. Will it be taken out of Social Security like medicare is taken out? You know seniors like things to be simple as they get to their retirement age and your not explaining how this will work. I know its for those under the age of 55 now if Romney gets elected but I think the younger generation needs to know exactly how it will work for them. PLEASE PLEASE EXPLAIN

    24. Mike, Wichita Falls says:

      "The same set of dollars "saved" from Obamacare's massive across-the-board Medicare payment cuts cannot be used to enhance Medicare solvency, reduce the federal deficit, and fund Obamacare's entitlement expansions all at the same time."

      As a child, I thought writing a check was a way to avoid depleting your bank account. What a revelation it was when my folks explained that writing a check was the same as paying cash. Does that mean our public servants have the same immaturity and ignorance as a child?

    25. RAZOR says:


    26. Linda says:

      Not only are funds being taken away from medicare but there are also lots more regulations that are already going into effect. Example: If you use a C-Pac, there are new regs that keep you from getting a new mask when one wears out. You have to first do a 31 day test to prove you need a c-pac (after you did test when you were originally given a c-pac). After that you have to do another 90-day test and make a
      special trip to your doctor, in person, and tell him that the c-pac is working. Essentially, this is double the trouble.
      That's just one little item. Won't it be wonderful when all of the unknows regs go into effect. That is, if you can find a doctor who will accept medicare.

    27. Blair Franconia, NH says:

      Medicare wasn't always broke. It got that way because Democrats stuck their fingers in their ears and said: "LA! LA! LA! CAN'T HEAR YOU!"

    28. muskegonlibertarian says:

      Considering that doctors and hospitals in Europe, Canada, Japan, "down under" operate with even lower fee rates than what Obama has proposed, the question should be asked why can't Americans do the same thing? In a Libertarian society there would be no government regulation of health care. Doctors would "certified", the same would be done with hospitals. There would be no prescription laws. Computer software would be available so that for most medical conditions you could do your own diagnosis. Without prescription laws the cost of keeping yourself healthy would be far less than it is today. For example, the cost of blood pressure medication using Walmart generics is $10 for a 90 day supply, or $40 a year. My cholesterol medication would be $72 a year. So for blood pressure and cholesterol, my total cost would $112 a year. About a third of what I now have to pay out under our present system. Hospitals under Libertarianism would only be allowed to charge for services actually rendered. The type of cost shifting used today to cover the cost of high technology equipment used by a minority of patients would not be allowed. If the equipment couldn't justify its cost, it wouldn't be used. With tort reform, malpractice insurance would be a small fraction of what it is today. With much lower health care costs, the issue of "insurance" would be quite a bit different than it is now. Remember US health care costs are probably double today of what they'd be if government would out of the picture. Unfortunately neither major political party today is willing to cut back government to its actual Constitutional role…

    29. spindle789 says:

      What a joke. The dates don't even match up. The DNC is Monday, September 3 – Thursday, September 6th.

      The Jumah is Friday August 31st – Saturday September 1st.

      This only works with a TARDIS.

    30. Kevin Trevor says:

      The changes affected me, been on welfare for some time now. Before Obama on the welfare dole, I paid zero for doctor visits and scripts. I now have $5 copay for visits and $3 copay for scripts when needed. Mom and dad are not pleased about it either.

    31. Jeanne Stotler says:

      If everyone went to see the Movie "2016, Obama's story" they would know what He's up to. Already we are reaping results from his (Inborn need) to destroy America. We are now being fed medications from foriegn countries that have NO ACTIVE ingredients. If you don't believe me look up Roger Bate, Phake medicines

      • Bobbie says:

        I totally believe you, Jeanne! I've seen an ugly display of health care in hospitals and clinics since 2008 along with wrongful deaths brought on by the "health care" itself where make work (inefficiencies) overlaps and undermines just for complication and cover so for hope, no one knows how or who the finisher is. I want to share this horrific part of my life some day before my death but it's too soon after and the depression is sporadic and deep for now.

        Thank God for Heritage whom I've come to benefit therapeutically to which Heritage Foundation may never know how grateful I am to and for them. Take care always!!
        God Bless!

    32. Sim Ulate says:

      Truth: Obama didn't make any cuts to Medicare benefits; he made cuts to provider reimbursements, to improve cost efficiency and extend the fiscal security of Medicare by eight years. According to the Medicare Actuary, "[Obama's] Affordable Care Act makes important changes to the Medicare program and substantially improves its financial outlook."1Medicare's Actuaries estimate that Romney/Ryan's policies will shrink the life of the Medicare trust fund from 2024 to 2016. http://populationalert.org/GlobalWarming/Republic

    33. @laibacute says:

      i m tottaly agree with above comment by @janet =. We really need to get rid from this obamacare What the heck is happening ? all the news and blogs are full with obama and obamacare. this is yeakh…

    34. briancrossby says:

      yeah.. that really great..

    35. Vlad Jersian says:

      This article mentions.. correctly.. that the Medicare Tax, starting in 2013, will increase from 2.9% (employees only pay 1.45%) to 3.8%… However, what it fails to mention is that the additional .9% tax will only be applied to employees earning more than 200,000 individual or $250,000 per couple… so, I would think most people and small business need not worry… right?

    36. Donna Neighbors says:

      What page of the Obama bill states that Mediare funds will be used to fund Obama Care?

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