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Health Care / HEALTH CARE

Ryan Budget Plan Adopted Medicare Cuts From Democrats' Affordable Care Act

Republican vice presidential candidate Rep. Paul Ryan R-Wis., greets his supporters during a campaign event at Palo Verde High School on Tuesday, Aug. 14, 2012 in Las Vegas.   (AP Photo/David Becker)

photo of Meghan McCarthy
August 15, 2012

As House Budget Committee chairman, Rep. Paul Ryan, R-Wis., didn’t just propose to overhaul how Medicare would work. In both of his budget blueprints, Ryan included the same cuts to Medicare that Democrats used to pay for their health care law.

Yes, that’s right. Paul Ryan—champion of the tea party movement, crusader to repeal the 2010 Affordable Care Act, and now GOP presidential candidate Mitt Romney’s running mate—chose to keep a piece of "Obamacare" alive in his conservative manifesto. And it was one of the pieces Republicans hit the hardest in blistering campaign critiques of the law.

When Democrats pushed through the Affordable Care Act, they cut $716 billion from Medicare providers, mostly by decreasing the rate at which hospital payment rates would increase. Those future cuts are used to pay for the cost of insuring an additional 30 million people. Democrats argue the cuts to Medicare providers will be offset by the increased business hospitals, doctors, and pharmaceutical companies will see, thanks to all of the newly insured people.

 

Despite Republicans’ repeated pledges to repeal the law, Ryan’s budget plan repealed the pieces of the health care law that expanded health insurance, but kept the Medicare cuts in place. One reason Ryan needs the Affordable Care Act’s Medicare cuts is because he delays his big changes to the Medicare program—which would give seniors a choice between traditional Medicare and a commercial plan—for 11 years, a move that makes the plan far more politically palatable. But the delay also means Ryan had to find another way to achieve hundreds of billions of dollars in Medicare savings.

Another reason is that on paper, Medicare’s financial health would be worse off without the health care law’s cuts, even though the money will eventually be used to help lower-income Americans obtain health insurance coverage. That’s a point that has irked a budget wonk like Ryan since the law was being debated.

Before the reform law passed, Medicare’s trust fund was set to expire in 2016. After the law passed, the life of the trust fund was extended to 2024, because the program would be paying providers less money. If Ryan reversed those cuts, he would be making the Medicare program worse off in terms of financial accounting, even though the cuts are ultimately not being used for Medicare.

Romney has long toed the party line on repealing all of Obamacare, but naming Ryan as his running mate forced him to clarify that he would not keep the health care law’s Medicare cuts. Romney policy director Lanhee Chen put out a statement on Tuesday saying that a Romney-Ryan administration would “restore the funding to Medicare.”

In the past, Ryan has defended keeping the health care law’s Medicare cuts by promising to use the funds to “shore up” Medicare by putting the money back into the program’s trust fund, instead of using it to eventually expand health insurance coverage to lower-income Americans.

In fact, that argument has become a new line of attack for the GOP presidential campaign. A television ad released on Tuesday aimed at seniors accuses Obama of gutting Medicare.

“You paid into Medicare for years … now when you need it, Obama has cut $716 billion from Medicare. Why? To pay for Obamacare,” the ad says. “The Romney-Ryan plan protects Medicare benefits for today’s seniors.”

But when it came to putting off the nearly $500 billion in automatic defense cuts that will start taking effect in 2013, Ryan was fine with using some Medicare funds to avoid that hit. His fiscal 2013 budget directed committees with jurisdiction over Medicare to find nearly $150 billion in savings over 10 years, and suggests using “means-testing entitlements”—in other words, charging wealthier seniors more for their Medicare coverage.

Ryan’s recommendations in his budget plan are not binding, and the health committees ultimately didn’t touch Medicare. But they directly contradict his position that Medicare cuts should be used for one thing, and one thing alone: shoring up the Medicare program.

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