NBC's David Gregory muddied the waters on the Medicare debate, saying that President Obama "claims that he would extend the solvency of Medicare eight years until 2024." However, this is not just a claim put forth by the Obama campaign; the Medicare Board of Trustees has estimated that Medicare will remain solvent until 2024 thanks to the health care law.
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Gregory: Obama Claims "He Would Extend The Solvency Of Medicare Eight Years Until 2024"
David Gregory: Obama "Claims That He Would Extend The Solvency Of Medicare Eight Years Until 2024." Discussing Obama's Medicare plan, Meet the Press host David Gregory said that "there's been so much noise and back and forth on Medicare," adding that he would "try to boil it down." Gregory then stated:
GREGORY: Let me start with the president's approach [to Medicare] and I want to put it up on the screen for our viewers, so we can have a basic understanding of this. The president wants to leave the program in place the way it is. It's a defined benefit program. He does -- already passed under the health care law -- will reduce payments to hospitals, to health care providers, and private insurers to the tune of $716 billion. You've heard that figure a lot this week. And he claims that he would extend the solvency of Medicare eight years until 2024. [NBC, Meet the Press, 8/19/12]
The Affordable Care Act Does Extend The Solvency Of Medicare
Obama Spokesman: "President Obama Extended The Solvency Of Medicare By 8 Years By Passing The Affordable Care Act." As Politico reported, Obama spokesman Ben LaBolt said that Obama "doesn't just talk about Medicare solvency -- he actually did something, and he did it in a way that enhances seniors' benefits." LaBolt added: "President Obama extended the solvency of Medicare by 8 years by passing the Affordable Care Act, and his budget would add another two years to its lifetime." [Politico, 8/15/12]
Centers For Medicare & Medicaid Services: "Without The Affordable Care Act, The HI Trust Fund Would Expire ... In 2016." In a press release announcing its 2012 Medicare Trustees report, the Centers for Medicare & Medicaid Services wrote that "[w]ithout the Affordable Care Act, the HI Trust Fund would expire ... in 2016":
The Medicare Trustees Report released today shows that the Hospital Insurance (HI) Trust Fund is expected to remain solvent until 2024, the same as last year's estimate, but action is needed to secure its long-term future. In 2011, the HI Trust Fund expenditures were lower than expected.
Without the Affordable Care Act, the HI Trust Fund would expire 8 years earlier, in 2016. The law provides important tools to control costs over the long run such as changing the way Medicare pays providers to reward efficient, quality care. These efforts to reform the healthcare delivery system are not factored into the Trustees projections as many of the initiatives are just launching.
"The Trustees Report tells us that while Medicare is stable for now, we have a lot of work ahead of us to guarantee its future," said Acting CMS Administrator Marilyn Tavenner. "The Affordable Care Act is giving CMS the ability to do this work, with tools to lower costs, fight fraud, and change incentives so that Medicare pays for coordinated, quality care and not the number of services." [Centers for Medicare & Medicaid Services, 4/23/12]
NY Times: "Since The Passage Of The Health Care Law ... The Medicare Trustees Have Shifted The Projected Date Of Insolvency To 2024 From 2016." On July 6, The New York Times reported that "[s]ince the passage of the health care law, known as the Affordable Care Act, the Medicare trustees have shifted the projected date of insolvency to 2024 from 2016":
The Congressional Budget Office and the chief actuary for the Medicare and Medicaid programs, Richard S. Foster, have concluded that the $500 billion in savings would extend the solvency of Medicare's hospital insurance trust fund. Since the passage of the health care law, known as the Affordable Care Act, the Medicare trustees have shifted the projected date of insolvency to 2024 from 2016.
Mr. Foster, in this year's report by the trustees, wrote that "the Affordable Care Act makes important changes to the Medicare program and substantially improves its financial outlook." [The New York Times, 7/6/12]
Wash. Post: "Repealing Obamacare Cuts Would Hasten Insolvency." In an August 16 post on The Washington Post's Wonkblog, Sarah Kliff wrote, "The health care law extended the solvency of Medicare's Trust Fund. If the program pays hospitals less, each dollar stretches a little bit further. Earlier this year, the independent Medicare Board of Trustees estimated that with these cuts the trust fund would remain solvent through 2024." She continued:
Without those cuts, however, the budget gets a little tighter. Medicare keeps paying providers at the same rates it does now, but each dollar buys less. And that means, according to these trustees, that the trust fund would no longer be able to cover Medicare's costs as soon as 2016.
"Simply undoing the cuts would restore higher payments to those service providers," Alonso-Zalidvar writes. "And that would cause Medicare to spend money faster."
It's worth pointing out that this wouldn't be exactly the same thing as Medicare going "broke" -- Congress could always allocate additional funds to cover the program. They have pretty reliably done so when previous trustee reports suggested that insolvency might be near.
What it does tell us is this: Medicare would have more trouble covering its bills without the Affordable Care Act's cuts than with them. [The Washington Post, Wonkblog, 8/16/12]
CBPP: "Health Reform Has Improved Program's Financing." In a report titled, "Medicare Is Not 'Bankrupt' Health Reform Has Improved Program's Financing," the Center on Budget and Policy Priorities wrote that "Medicare's financing challenges would be significantly greater without the health reform law (the Affordable Care Act, or ACA), which substantially improved the program's financial outlook." CBPP continued:
Repealing the Affordable Care Act, a course of action promoted by some who simultaneously claim that the program is approaching "bankruptcy," would make Medicare's financial situation much worse.
The 2012 report of Medicare's trustees finds that Medicare's Hospital Insurance (HI) trust fund will remain solvent -- that is, able to pay 100 percent of the costs of the hospital insurance coverage that Medicare provides -- through 2024; at that point, the payroll taxes and other revenue deposited in the trust fund will still be sufficient to pay 87 percent of Medicare hospital insurance costs. (The Medicare hospital insurance program is considered insolvent when revenues and trust fund balances will not cover 100 percent of projected costs.) Over the next 75 years, revenue will cover an average of 74 percent of Medicare's hospital insurance costs. This shortfall will need to be closed through the provision of additional revenues, program changes that slow the growth in costs, or most likely both. But the Medicare hospital insurance will not run out of all financial resources and cease to operate after 2024, as the "bankruptcy" term may suggest. [Center on Budget and Policy Priorities, 4/24/12, emphasis original]