What is this $716 billion cut that Romney claims Obama “raided” from Medicare and Paul Ryan included in his budget? One of the most misleading things about Romney’s accusation is the implication that cutting $716 billion from Medicare will change the coverage of current or future Medicare recipients. It won’t.
The “$716b cut” refers to the Medicare cuts in the Affordable Care Act. The bulk of those cuts come in two areas. First, private insurance plans in the Medicare Advantage program have been getting paid about 20 percent more than traditional Medicare. Those overpayments are ratcheted back. Second, in negotiations with the White House, hospitals agreed to take a cut in reimbursements with the understanding that they’ll make more money from the 30 million previously uninsured people who will have insurance as a result of the law. The cuts to insurers and hospitals were sufficiently obvious that Paul Ryan included them in his budget.
From
Romney’s Medicare Chart Comes Up Blank, by Ezra Klein on Bloomberg
Klein goes on to explain what it means when Romney says under his presidency there will be “no change” to Medicare, even when he promises to repeal Obamacare:
“No change” is clear enough. But in case you were confused, Romney emphasized that there will be “no changes, no adjustments, no savings” to Medicare for the next decade. So Romney plans to keep paying Medicare Advantage plans about 20 percent more than traditional Medicare, and he intends to give hospitals payments that they have already agreed to give up.
Medicare Advantage refers to health plans that Medicare recipients can select and usually pay extra for. They are offered by private health insurance companies who contract with Medicare.