Rep. Boehner's AEI Speech Perpetuates Health Care Lies

September 30, 2010 6:18 pm ET

While addressing The American Enterprise Institute, House Minority Leader John Boehner didn't even flinch as he claimed that the health care reform bill cuts from Medicare $550 billion "that it doesn't have" and "start[s] a brand new entitlement program." In fact, the only place new entitlement programs are being created is in Rep. Boehner's imagination: The Affordable Care Act leaves in place the private health care system. Furthermore, "cuts" to Medicare are actually savings created by eliminating excess in what the federal government will pay to private Medicare Advantage administrators, and the bill results in additional benefits for seniors.

Boehner Invents New Entitlement Program

REP JOHN BOEHNER: Secondly, you know, there were $550 billion worth of Medicare cuts in the health care bill. Let me tell you, if there were $550 billion to save in Medicare, why wouldn't we use it to save Medicare instead of taking it from Medicare that doesn't have it and starting a brand new entitlement program. And so I would repeal the $550 billion worth of Medicare cuts. And let's see how many votes that bill gets in the House and Senate. [Boehner speech at the American Enterprise Institute, 9/30/10]

The Affordable Care Act Doesn't Replace Private Health Care System With "Brand New Entitlement Program"

Politifact: "Obama's Plan Leaves In Place The Private Health Care System." Analyzing Sen. Tom Coburn's claim that President Obama's health care reform plan amounted to a government takeover of health care, wrote:

[H]e's wrong that Obama's plan offers government-run health care.

In fact, Obama's plan leaves in place the private health care system, but seeks to expand it to the uninsured. It increases eligibility for the poor and children to enroll in initiatives like Medicaid and the State Children's Health Insurance Program, and creates pools for individuals to buy their own cheaper insurance. It also outlines strategies to rein in costs for everyone, such as electronic medical records and preventive care.  


That may be Sen. Coburn's opinion on what could happen, but it's definitely not part of Obama's plan. And Coburn was very specific in saying that "under the Obama plan, all the health care in this country is eventually going to be run by the government." That gives the incorrect impression that Obama is promoting a government-run health care system. He's not. We rate Coburn's statement False.

[, 3/4/10, emphasis added]

Health Care Reform Does Not Cut Medicare Benefits

Health Care Reform "Will Keep Paying Medical Bills For Seniors."  According to "The government-run Medicare program will keep paying medical bills for seniors, but it will begin implementing cost controls on health care providers, mostly through penalties and incentives. The legislation would reduce payments for hospital-acquired infections or preventable hospital admissions. For Medicare Advantage, the federal government intends to reduce extra payments, taking away subsidies to private insurance companies. Insurers will likely cut benefits in order to not lose profits. The bill does not address the 'doctor's fix,' an expected proposal that Congress usually passes to prevent doctors' Medicare payments from severe cuts." [, 3/18/10; emphasis in original]

Reuters: "There Are No Cuts To The Traditional Medicare Benefit." As reported by Reuters:

There are no cuts to the traditional Medicare benefit. The lion's share of spending cuts are in Medicare Advantage -- a program that uses private firms such as Humana and UnitedHealth Group to deliver Medicare benefits. Many of these providers offer extra coverage and some of those extras could be dropped as Medicare Advantage subsidies are bought more in line with the cost of traditional Medicare benefits. Medicare Advantage payment rates will be frozen in 2011 and then gradually reduced giving companies time to adjust to the changes. [Reuters3/22/10]

No Traditional Medicare Beneficiaries Would Be Affected. From Kaiser Health News:

The three-quarters of beneficiaries who receive traditional Medicare benefits would not be affected by the change. However, for those in Advantage plans, they may have fewer to choose from. "You are going to start seeing companies dropping out," said Robert Moffit, a policy analyst at the Heritage Foundation. [Kaiser Health News, 4/6/10]

Let's Get It Straight: Medicare "Cuts" Are Actually Savings From Phasing Out "Substantial Overpayment" To Medicare Advantage

CBO: Cost Changes To Medicare Made From Savings. According to the CBO: "Changes to the Medicare program and changes to Medicaid and CHIP other than those associated directly with expanded insurance coverage:  Savings from those provisions are estimated to total $93 billion in 2019, and CBO projects that, in combination, they will increase by 10 percent to 15 percent per year in the next decade." [, 10/7/09]

NEJM: HCR Phases Out "Substantial Overpayments" To Medicare Advantage Plans. From the New England Journal of Medicine:

A phased elimination of the substantial overpayments to Medicare Advantage plans, which now enroll nearly 25% of Medicare beneficiaries, will produce an estimated $132 billion in savings over 10 years.


The ACA also produces nearly $200 billion in savings by assuming that providers can improve their productivity as firms in other industries have done. On the basis of this presumed improvement, the law reduces Medicare's annual "market basket" updates for most types of providers - a provision that has generated controversy. [New England Journal of Medicine7/8/10]

Cuts Would Only Affect Medicare Advantage Plans. As reported by Kaiser Health News:

The new health law will cut $136 billion in spending on the Advantage program by 2019, which currently pays private plans to administer Medicare benefits and pays them about 14 percent more than the per-patient cost of the traditional Medicare program. Plans use that subsidy to lure members with lower premium costs or extra benefits not normally paid for by Medicare, such as vision care or better prescription drug coverage. Some Democrats and analysts have argued the higher rates are wasteful. 

Even experts who support the change concede that the impact of the cuts could be evident. Robert Berenson, a scholar at the Urban Institute and former Medicare official, said some Advantage plan members will notice skimpier benefits, "but the Republicans have really exaggerated that this will wipe out the Advantage plans." 

Marsha Gold, a health policy analyst for the private research group Mathematica, said, "Over time, there will be less rich benefits or higher premiums, but it's going to be gradual," noting that the largest cuts do not begin until 2015. 

[Kaiser Health News, 4/6/10]

Medicare Advantage Costs Taxpayers 14% More Than Traditional Medicare.  As reported by

Let's back-up for a minute and explain Medicare Advantage: There are two basic ways most people get Medicare coverage. They enroll in traditional Medicare and a prescription drug plan through the government and maybe buy a supplemental policy to cover most out-of-pocket costs. Or they enroll in Medicare Advantage programs (they include drug plans), which are run by private insurers. Medicare Advantage programs typically have more generous benefits such as dental and vision coverage. Some plans even pay the patient's monthly Medicare premium, which can amount to about $100.

The Medicare Advantage program was intended to bring more efficiency from the private sector to the Medicare program, but it hasn't worked as planned. A June 2009 analysis from the Medicare Payment Advisory Commission said that the Advantage programs costs taxpayers on average of 14 percent more than the traditional Medicare plan. President Barack Obama has said repeatedly that the Medicare Advantage plan wastes public money that could be put to better use. [, 9/20/10]

In Fact, Health Care Reform Does Improve Medicare Coverage

Health Care Reform Fills The "Doughnut Hole."  According to the Kaiser Family Foundation: "In 2010, Part D enrollees with any spending in the coverage gap will receive a $250 rebate. Beginning in 2011, enrollees with spending in the coverage gap will receive a 50 percent discount on brand-name drugs, provided by the pharmaceutical industry. The law phases in Medicare coverage in the gap for generic drugs beginning in 2011, and for brand-name drugs beginning in 2013. By 2020, Part D enrollees will be responsible for 25 percent of the cost of both brands and generics in the gap, down from 100 percent in 2010." [Kaiser Family Foundation, accessed 8/25/10]

Health Care Reform Improves Medicare's Coverage Of Preventative Benefits.  According to the Kaiser Family Foundation: "Beginning in 2011, no coinsurance or deductibles will be charged in traditional Medicare for preventive services that are rated A or B by the U.S. Preventive Services Task Force (USPSTF). Medicare will cover a free annual comprehensive wellness visit and personalized prevention plan." [Kaiser Family Foundation, accessed 8/25/10]

Instead Of A New Entitlement, The Affordable Care Act Makes The Following Reforms

Health Care Reform Prevents Insurance Companies From Rescinding Coverage Over Unintentional Errors. According to the Congressional Research Service: "Effective for plan years beginning on or after six months after enactment, the law generally prohibits rescissions for a group health plan, a grandfathered plan, and a health insurance issuer offering group or individual health insurance coverage. Rescissions will still be permitted in cases where the covered individual committed fraud or made an intentional misrepresentation of material fact as prohibited by the terms of the plan or coverage." [Congressional Research Service, 4/15/10, internal citation deleted for clarity]

  • Prior To Health Care Reform, Rescission Was Allowed In 43 States. According to the Kaiser Family Foundation, prior to the passage of the health care reform law, 43 U.S. states and the District of Columbia allowed insurance companies to revoke an enrollee's coverage during a "contestability period ... if any, even unintentional, material misstatement or omission is discovered." [Kaiser Family Foundation, accessed 9/21/10]

Health Care Reform Provides Access To Insurance For Americans With Pre-Existing Conditions.  According to the Kaiser Family Foundation, the health care reform law "[c]reates a temporary program to provide health coverage to individuals with pre-existing medical conditions who have been uninsured for at least six months. The plan will be operated by the states or the federal government." [Kaiser Family Foundation, accessed 9/21/10]

Health Care Reform Restricts Insurance Policies' Annual And Lifetime Limits. According to the AARP:

Q. Does the new health care reform law eliminate annual and lifetime limits on health care coverage in insurance policies?

Yes. On Sept. 23, lifetime limits are effectively banned for all plans that begin or are renewed after that date. Insurance companies can no longer cut off policy holders when their medical expenses reach a lifetime limit. Annual limits on coverage will be phased out over the next few years, beginning this year...

The law phases out these annual limits over a period of three years: in the first year, insurers must cover medical expenses up to at least $750,000. That coverage rises to $1.45 million after Sept. 23, 2011 and increases to $2 million after Sept. 23, 2012. Limits will be completely banned starting Jan. 1, 2014. [, 8/23/10, emphasis original]

Health Care Reform Gives Americans The Right To Appeal When Insurance Companies Refuse To Pay. According to Commerce Clearing House, the health care reform law requires insurance companies to "implement an effective process for appeals of coverage determinations and claims. This appeals process must include, at a minimum, the following: an established internal claims appeal process; a notice to participants...of available internal and external appeals processes, including the availability of assistance with the appeals processes; and a provision allowing an enrollee to review his or her file, to present evidence and testimony as part of the appeals process, and to receive continued coverage during the appeals process." [Commerce Clearing House, 6/8/10]

Health Care Reform Requires Insurers To Provide Free Preventive Care Services. The new health care reform law "[r]equires new private plans to cover preventive services with no co-payments and with preventive services being exempt from deductibles." By 2018, all private health insurance plans must provide preventive services. [CBS News, 3/21/10]

Health Care Reform Reduces Premiums For Most Americans. According to "The CBO reported that, for most people, premiums would stay about the same, or slightly decrease. This was especially true for people who get their insurance through work. (Health policy wonks call these the large group and small group markets.) People who have to go out and buy insurance on their own (the individual market) would see rates increase by 10 to 13 percent. But more than half of those people — 57 percent, in fact — would be eligible for subsidies to help them pay for the insurance. People who get subsidies would see their premiums drop by more than half, according to the CBO. So most people would see their premiums stay the same or potentially drop." [, 1/27/10, emphasis added]

Health Care Reform Insures 34 Million New People With 1% Health Care Spending Increase. According to the Washington Post's Ezra Klein: "First, be clear about what's being estimated. The Congressional Budget Office's estimates look at the deficit. CMS is looking at total national health expenditures. This often confuses people into thinking that there's conflict between the two sets of numbers when there isn't: CBO says that federal spending is going to go up to pay for the coverage expansion, but that savings and revenue will go up by even more, leading to a net reduction in the federal deficit. CMS is looking only at the spending side. And here's what it finds: In 2019, implementation of the Affordable Care Act will reduce the ranks of the uninsured by 34 million people and increase nation health expenditures by 1 percent. One percent... So that's the bottom line of the report: We're covering 34 million people and come 2019, spending is expected to be one percentage point — and falling — above what it would've been if we'd done nothing." [Washington Post4/23/10, emphasis added]

Here are some of the ways the Patient Protection and Affordable Care Act benefits health care providers...

Health Care Reform Funds Scholarships And Loan Repayments For Doctors And Nurses In Underserved Areas. The Kaiser Family Foundation reports that the health care reform law "[p]ermanently authorizes the federally qualified health centers and NHSC [National Health Service Corps] programs and increases funding for FQHCs and for the NHSC for fiscal years 2010-2015." [Kaiser Family Foundation, accessed 9/21/10, emphasis added]

  • The NHSC Is A Scholarship And Loan Repayment Program For Providers In Underserved Areas. According to the Congressional Research Service, "The National Health Service Corps (NHSC) program ... provides scholarships and student loan repayments for medical students, nurse practitioners, physician assistants, and others who agree to a period of service as a primary care provider in full-time clinical practice in a federally designated Health Professional Shortage Area (HPSA)." [Congressional Research Service, 3/1/10]

Health Care Reform Funds Mid-Career Training For Health Professionals. According to a report by the University of Iowa's Rural Policy Research Institute, "Grants will be awarded to entities to award scholarships to mid-career public health and allied health professionals for additional training.... Scholarships may create opportunities for mid-career training among rural public and allied health professionals who otherwise may not have had such opportunities because of the cost of programs and displacement." [Rural Policy Research Institute, 6/10]

Health Care Reform Increases Pay For Some Primary Care Providers In Underserved Areas. According to a report by the University of Iowa's Rural Policy Research Institute, "An additional 10% payment will be made to qualifying primary care providers for cognitive care services as defined by specific codes, and for surgical procedures furnished by general surgeons in health professional shortage areas. Primary care providers include physicians, nurse practitioners, clinical nurse specialists, or physician assistants for whom primary care services are at least 60% of allowed charges." [Rural Policy Research Institute, 6/10]

Health Care Reform Ensures Higher Medicaid Payments For Rural Doctors. According to a report by the University of Iowa's Rural Policy Research Institute, "Primary care physicians will be paid Medicare rates when treating persons this legislation makes newly eligible for Medicaid. This provision will apply to 2013 and 2014, with a federal match of 100% of the cost.... This will provide higher marginal payment for rural primary care physicians than would be true if Medicaid rates were used." [Rural Policy Research Institute, 6/10]

Health Care Reform Allows Physicians To Keep Some Money Saved By Providing Cost-Effective Treatment. According to a report by the University of Iowa's Rural Policy Research Institute, the health care reform bill sets up "groups of providers such as hospitals and physicians, operating under a shared governance arrangement, accountable for the patients assigned to them, and eligible to share in savings to the Medicare program that result from more cost-effective treatment." [Rural Policy Research Institute, 6/10]