Op-Eds From Reps. Ryan And Pitts Filled With Health Care Lies

August 02, 2011 10:30 am ET

As a deal on the debt crisis was being reached, Reps. Paul Ryan (R-WI) and Joe Pitts (R-PA) refocused their energy on lying about the Affordable Care Act (ACA) and distorting its impact on job creators, seniors and economy. In Politico op-eds, the congressmen attacked the health care waivers granted, cited the debunked McKinsey study as proof of the ACA's supposed negative impact on hiring, and condemned the Independent Payment Advisory Board (IPAB) for harming seniors by denying care. Rep. Ryan also rehashed the tired claim that the ACA cut $500 billion from Medicare and falsely asserted the ACA has "weakened our economy and accelerated out-of-control government spending" while touting his "Path to Prosperity" budget plan that would end Medicare as we know it.

CLAIM: Rep. Pitts Claimed Employers "Were Forced To Receive Waivers" To Avoid Dropping Health Coverage For Employees

REP. JOE PITTS: Throughout the health care debate, President Barack Obama promised that Americans could keep their current health care plan if they liked it. More than 1,400 waivers later, we have found out that simply is not the case. Because of the law's onerous mandates, job creators and other groups were forced to receive waivers to ensure Americans could keep their health coverage. [Politico, 7/31/11]

FACT: Health Care Law Bans Bare Bones Mini-Med Plans But Creates More Comprehensive Health Care Options With Exchanges

Mini-Med Plans Are Low-Cost Health Care Coverage Options For People With Part-Time Or Hourly Employment. According to the BLR Human Resource Network: "'A mini-med plan is a low-cost healthcare plan for somebody who cannot afford traditional insurance or who is not eligible for major medical insurance, like a part-time or hourly employee,' explains Jonathan S. Edelheit, vice president at OptiMed/United Group Programs, Inc. (www.ugpinc.com). 'It's not meant to replace a traditional major medical plan; rather it's more of a basic policy. It provides access to day-to-day health care such as going to the doctor or getting a prescription drug. It does provide benefits for hospitalization and surgical, but they're limited. It is not meant to be there for catastrophic events.'" [HR.BLR.com, 05/09/07, parentheses original]

Mini-Med Policies Enforce An Annual Limit On Care And Are Banned Under PPACA Due To Their Inability To Provide Comprehensive Health Coverage. According to a December 9, 2010, Health and Human Services fact sheet: "The Affordable Care Act will end 'mini-med' plans in 2014 and provide Americans with affordable, high-quality coverage options. Unfortunately, today, mini-med plans are often the only type of private insurance offered to some workers. In order to protect coverage for these workers, HHS has issued temporary waivers from rules restricting the size of annual limits to some group health plans and health insurance issuers. Waivers only last for one year and are only available if the plan certifies that a waiver is necessary to prevent either a large increase in premiums or a significant decrease in access to coverage." [Healthcare.gov, Fact Sheet, 12/09/10, emphasis added]

Mini-Meds — The Reason Waivers Are Necessary — Will Be Eliminated By 2014, And Have Already Begun To Be 'Phased Out.' According to the December 10, 2010, White House Blog post: "The good news is that mini-meds will be eliminated in 2014, thanks to provisions that phase out insurance companies' use of annual limits between now and 2014. The 'phase out' has already begun to kick in, and in 2014 when annual limits are completely eliminated, consumers be able to purchase health insurance in state-based Exchanges — new competitive marketplaces — where consumers and small businesses can shop for private coverage and will have the market power similar to large employers." [WhiteHouse.gov, 12/10/10]

FACT: Waivers Are Temporary And Act As A Stop-gap Until The Health Care Law Is Fully Implemented

The Waiver Program Will Allow Companies To Keep Their Current Insurance Without Incurring A Penalty Or Having To Drop Coverage. According a White House Blog post: "Because mini-meds are built around annual limits, estimates from employers and insurers indicate that beginning the phase out of annual limits this year would cause mini-med premiums to rise by more than 200 percent, forcing employers to drop coverage and sending many low-wage workers to purchase insurance on the more expensive individual insurance market, where they would get an even worse deal than what they have today." [WhiteHouse.gov, 12/10/2010]

FactCheck.org: Waivers "Merely Give Companies A Temporary Delay Before Being Required To Improve The Coverage Of Cheap, Bare-Bones Plans They Currently Offer." From FactCheck.org:

The government has granted more than 200 waivers, but these merely give companies a temporary delay before being required to improve the coverage of cheap, bare-bones plans they currently offer. [...]

The companies haven't been granted permission to ignore the entire law, as the Facebook post quoted by our reader might suggest — but many have been given one-year waivers to delay compliance with a key insurance mandate that was put into place this fall. The White House says it instituted the waiver process to enable those companies to continue to provide limited-benefits plans  — cheap, bare-bones policies called mini-med plans  — until the law is fully implemented in 2014. [...]

The new health care law aims to eliminate low annual coverage caps like those over time, and this is where the waiver issue has come in. The law says that annual coverage limits can't be set lower than $750,000 for new policy years starting between Sept. 23, 2010 and Sept. 23, 2011. That cap will be raised each year until 2014, when the law will require companies to have no annual spending limits on most benefits in health care plans. [...]

The companies that have been approved for the waivers must reapply for them next year. Waivers are available until 2014. [FactCheck.org, 12/7/10]

National Retail Federation VP: Waivers Are Temporary And "Safeguard Existing Coverage" Until 2014. According to Kaiser Health News, Neil Trautwein, vice president of the National Retail Federation, stated:

What we're dealing with is an imperfect world between 2010 and 2014, and how you best safeguard existing coverage in this transition. For this limited-benefits coverage, also known as "mini-meds," nobody is going to pretend that this is the best coverage around, but having that coverage beats not having any coverage. And for a lot of people, if that coverage disappears, they'll have no other affordable alternative to turn to. So our point, which I think the administration shares, is that for the 1.4 million covered by these policies today, you want to make sure that you don't disrupt that before 2014, when there will be more and more affordable alternatives available.

The administration has been very careful to, on the waivers from the restrictions on annual benefit limits, make them year-by-year waivers. So these are not blanket waivers, these are not eternal waivers. [Kaiser Health News, 10/8/10]

CLAIM: Rep. Ryan Suggested "Political Considerations" May Have "Played A Roll" In Granting Health Care Waivers

REP. PAUL RYAN: Already, more than 1,400 businesses and organizations have asked for waivers from these new mandates on the grounds that the new top-down, one-size-fits-all rules would profoundly disrupt the health care arrangements of the millions of Americans they cover. Most of these waivers were granted, but some were not. And while it's unclear whether political considerations played a role in which waivers were denied, it's crystal clear that with power increasingly centralized in Washington bureaucracies, businesses will seek to employ good lobbyists at the expense of good workers. [Politico, 7/31/11]

FACT: There Is No Evidence Of Partisan Bias In Granting Waivers

Many Different Types Of Employers Received Waivers.  According to HHS.gov, various types of employers received the waivers, including small and large businesses, city, county and state governments, unions, and health insurance companies. [HHS.gov, accessed 5/19/11]

HHS Granted 1372 Waivers, Denied Less Than 100 Applications. White House press secretary Jay Carney told ABCNews.com, "There have been 1,372 waivers granted, and fewer than 100 waiver applications have been denied." [ABCNews.com, 5/17/11]

Groups That Did Not Support Health Care Reform Have Used The Waiver System To Their Benefit. FactCheck.org noted: "As of Dec. 3, the federal government had approved a total of 222 one-year waivers that allow the insurance plans at companies like McDonald's, Jack in the Box and Ruby Tuesday, and unions, to ignore the requirement on annual limits. Far from being 'Obama's buddies,' as the Internet post claimed, the restaurant industry, through the National Restaurant Association, opposed the legislation." [FactCheck.org, 12/7/10]

Even Groups With Republican Party Ties Are Able To Get Waivers. A. Duda & Sons, Inc.'s Senior Vice President of Real Estate and General Counsel, Tracy Duda Chapman, was on the transition team of Adam Putnam, a former chairman of the House Republican Conference now serving as Florida's agriculture commissioner. A. Duda & Sons, Inc. was granted a waiver. [Duda.com, accessed 1/19/10; SunshineStateNews.com, 11/5/10; AdamPutnam.com, accessed 1/21/11; HHS.gov, Waiver List, 12/03/10]

Standards For Acquiring A Waiver Are Published Online. The U.S. Department of Health & Human Services published guidance on their "annual limit waivers" and the established standards they use to review waiver applications. [HHS.gov, accessed 3/21/11]

HHS: Waiver Applicants Must Certify That Waiver Is Necessary To Prevent Reduced Access To Coverage Or Large Premium Increases. From the Department of Health and Human Services website:

The Affordable Care Act is designed to provide Americans with affordable, high-quality coverage options — while ensuring that those who like their current coverage can keep it. Unfortunately, today, limited benefit plans, or "mini-med" plans are often the only type of insurance offered to some workers. In 2014, the Affordable Care Act will end mini-med plans when Americans will have better access to affordable, comprehensive health insurance plans that cannot use high deductibles or annual limits to limit benefits. In the meantime, the law requires insurers to phase out the use of annual dollar limits on benefits. In 2011, most plans can impose an annual limit of no less than $750,000.

Mini-med plans have lower limits than allowed under the Affordable Care Act. While mini-med plans do not provide security in the event of serious illness or accident, they are unfortunately the only option that some employers offer. In order to protect coverage for these workers, the Affordable Care Act allows these plans to apply for temporary waivers from rules restricting the size of annual limits to some group health plans and health insurance issuers.

Waivers only last for one year and are only available if the plan certifies that a waiver is necessary to prevent either a large increase in premiums or a significant decrease in access to coverage. In addition, enrollees must be informed that their plan does not meet the requirements of the Affordable Care Act. No other provision of the Affordable Care Act is affected by these waivers: they only apply to the annual limit policy. [HHS.gov, accessed 3/21/11]

Administration Says The Waiver Process Is "Administered Fairly Without Regard To The Type Of Applicant Or Size Of Business." At a House Oversight subcommittee hearing, Steve Larsen, the Deputy Administrator and Director of the Centers for Medicare and Medicaid Services' Center for Consumer Information and Insurance Oversight, said of the administration of waiver requests:

LARSEN: All employers and insurers that offer limited benefit plans may apply for a waiver if they demonstrate that there will be a significant increase in premiums or a significant decrease in access to coverage without a waiver. Applying for a waiver is simple, basic, with only five elements that CCIO has clearly published on our Web site. It's important to note that more than 30 percent of applicants have fewer than 100 enrollees. Small businesses are able to take advantage of this as well as large ones.

We administer the process fairly, without regard to the type of applicant or size of business. We published our standards for reviewing the applications in the regulations implementing the law, and again in the bulletins implementing the regulations. [Hearing of the Health Care, District of Columbia, Census and the National Archives Subcommittee of the House Oversight and Government Reform Committee, 3/15/11, via Nexis]

CLAIM: Reps. Ryan And Pitts Cited McKinsey Study As Proof The ACA Will Create "Uncertainty" And Negatively Impact Hiring

REP. JOE PITTS: A recent study by McKinsey & Co. reveals the level of unease felt by employers.

Thirty percent of those polled reported they will definitely or probably stop offering health insurance in the coming years. The study further showed the more aware employers were of the law, the more likely they were to think they would drop coverage for their employees. [Politico, 7/31/11]

REP. PAUL RYAN:  Combined with more than $800 billion in new taxes, the uncertainty created by the new law is having a chilling effect on hiring. The small-business owners I speak to in southern Wisconsin are concerned that they have no way to plan for hundreds of new rules that have yet to be written. Will more waivers be granted next year? How will bureaucratic decisions change from year to year? It's anyone's guess.

No wonder a team of analysts at McKinsey & Co. recently found that as many as a third of employers are planning on terminating the coverage their employees currently enjoy. [Politico, 7/31/11]

FACT: McKinsey Admitted That The Survey Was Not A "Predictive Economic Analysis"

McKinsey & Co.: "The Survey Was Not Intended As A Predictive Economic Analysis." Following pressure to release its methodology, McKinsey & Company released a statement saying:

The survey was not intended as a predictive economic analysis of the impact of the Affordable Care Act. Rather, it captured the attitudes of employers and provided an understanding of the factors that could influence decision making related to employee health benefits.

As such, our survey results are not comparable to the healthcare research and analysis conducted by others such as the Congressional Budget Office, RAND and the Urban Institute. Each of those studies employed economic modeling, not opinion surveys, and focused on the impact of healthcare reform on individuals, not employer attitudes.

Comparing the McKinsey survey to economic estimates, such as the CBO's, is comparing apples to oranges. While the McKinsey Quarterly article about the survey cited CBO estimates, any comparison is not apt. We understand how the language in the article could lead the reader to think the research was a prediction, but it is not. [...]

As noted, the survey only captured current attitudes. Employers' future actions will be determined by many considerations. Among them: Medical cost inflation, the details of new state health insurance exchanges, employee attitudes toward compensation and benefits, a company's ability to attract and retain talent, actions taken by competitors and the state of the economy. These are just some of the many factors likely to influence employer behavior in the future.

To reiterate, the survey reported in the McKinsey Quarterly was not an economic forecast, but rather a measure of attitudes intended to understand the factors involved in employer decision making regarding employee benefits. [McKinsey & Company, 6/20/11]

Krugman: "Nobody Should Be Quoting This Study" As Policy Analysis. In a June 21 post on his New York Times blog, Nobel Prize-winning economist Paul Krugman wrote:

McKinsey has now released some (not all) of the details from its mystery study. True to form, the company now claims that a study touted as evidence that companies "will" drop coverage was "not predictive." Uh-huh.

So what do we learn? It was basically a poll — which is a really bad way to assess how firms will make decisions about whether or not to maintain health coverage. Such a decision is, after all, a big issue, one that won't be taken without careful study of the numbers and consequences. A relatively casual answer to a poll probably isn't a very good predictor of that decision. [...]

It's pretty clear that McKinsey was trying to drum up/scout out business, and someone had the bright idea of weighing in on policy debate on the Republican side. Bad idea, and nobody should be quoting this study for that purpose. [New York Times, 6/21/11]

White House: "Flawed Study From McKinsey Is Truly An Outlier." Following McKinsey & Company's statement, the White House responded:

Today, McKinsey acknowledged that this report is at odds with these independent analyses and said the report was not intended to predict whether or not employers would offer health insurance. Here's what McKinsey said today:

The survey was not intended as a predictive economic analysis of the impact of the Affordable Care Act... We understand how the language in the article could lead the reader to think the research was a prediction, but it is not.  

And the new information makes clear that the survey is flawed and raises new questions. [...]

The Affordable Care Act will make health insurance more affordable and make it easier for employers to offer coverage to their workers. In fact, a new study released today from Avalere Health, a respected consulting firm, looked at the validity of the various analyses published on the subject and found that the employer-sponsored health insurance market will be stable after 2014 and that "large employers are unlikely to stop offering coverage ..." And as we learn more, it's become clear that this one flawed study from McKinsey is truly an outlier. [WhiteHouse.gov, 6/20/11, emphasis added] 

FACT: Economists, Businesses Blame Weak Demand — Not Government Policies — For Weak Hiring

WSJ: "The Main Reason" For Hiring Reluctance Is "Scant Demand, Rather Than Uncertainty Over Government Policies." According to the Wall Street Journal:

The main reason U.S. companies are reluctant to step up hiring is scant demand, rather than uncertainty over government policies, according to a majority of economists in a new Wall Street Journal survey.

"There is no demand," said Paul Ashworth of Capital Economics. "Businesses aren't confident enough, and the longer this goes on the harder it is to convince them that they should be."

In the survey, conducted July 8-13 and released Monday, 53 economists-not all of whom answer every question-were asked the main reason employers aren't hiring more readily. Of the 51 who responded to the question, 31 cited lack of demand (65%) and 14 (27%) cited uncertainty about government policy. The others said hiring overseas was more appealing. [Wall Street Journal, 7/18/11, emphasis added]

Washington Post: Executives Can't Draw Specific Link Between Government Actions And Hiring Decisions. According to the Washington Post: "Fundamentally, executives objected to Obama's policies on the grounds they would make the United States a less competitive place to operate in the long run. But when [manufacturing CEO Jason] Speer and other executives were pressed on the role that tax and regulatory policies play in hiring, they drew only vague connections. Speer said his decision whether to hire is driven primarily by demand for his products. Orders are coming in strong enough that he is running about 20 hours a week of overtime. So he is weighing whether to hire two or three additional manufacturing workers. None of the executives interviewed linked a specific new government initiative with a specific decision to refrain from hiring." [Washington Post, 8/21/10, emphasis added]

CLAIM: Reps. Ryan And Pitts Claimed IPAB Will Harm Seniors By Denying Care

REP. JOE PITTS: Job creators aren't the only ones left with uncertainty. Also buried in the 2,700-page law is a newly created board of 15 unelected bureaucrats who will have the power to severely limit services available to our nation's seniors. [...]

HHS Secretary Kathleen Sebelius continuously defended the board by claiming that it's prohibited from rationing care. But this explanation has failed to convince hundreds of medical experts who object to the board on the grounds that it will have the power to slash or completely eliminate coverage for certain treatments. [Politico, 7/31/11]

REP. PAUL RYAN: Unless it's fully repealed, this law will also harm seniors. It raids $500 billion from Medicare and sets up a board of 15 unelected bureaucrats to make decisions that will result in denied care to seniors, without taking any credible steps to control the underlying health care costs that are speeding Medicare toward bankruptcy. [Politico, 7/31/11]

FACT: IPAB Is Prohibited From Rationing Care, Increasing Taxes, Or Changing Medicare Benefits Or Eligibility

IPAB Cannot Ration Care, Increase Taxes, Change Benefits Or Eligibility, Or Increase Premiums And Cost-Sharing Requirements. According to the Kaiser Family Foundation: "The Board is prohibited from submitting proposals that would ration care, increase taxes, change Medicare benefits or eligibility, increase beneficiary premiums and cost-sharing requirements, or reduce low-income subsidies under Part D. Prior to 2019, the Board is also prohibited from recommending changes in payments to providers and suppliers that are scheduled to receive a reduction in their payment updates in excess of a reduction due to productivity adjustments, as specified in the health reform law." [Kaiser Family Foundation, May 2010]  

FactCheck.org: "It's Wrong To Say That The Advisory Board Will Ration Care." FactCheck.org addressed Rep. Paul Ryan's (R-WI) claim that IPAB rations care:

Ryan twice warns of Obama's plan to "ration" health care for the elderly. He also says, "The greatest threat to the health security of America's seniors is the President's plan to deeply and systematically ration Medicare."

Ryan spokesman Conor Sweeney told us in an e-mail that the claim of rationing refers to funding for the Independent Payment Advisory Board created by the federal health care law. But it's wrong to say that the advisory board will ration care or that it will be run by bureaucrats, as we wrote when Sarah Palin made a similar claim.

The Patient Protection and Affordable Care Act says the advisory board "shall not include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums." Also, the board isn't made up of Washington bureaucrats. The 15 voting members will be appointed by the president in consultation with congressional leaders; they must include doctors and other health care professionals, economists and health care finance experts, and representatives of consumers and seniors, as the American Medical Association explains. There will also be three non-voting members: the Health and Human Services secretary, and the administrators of the Centers for Medicare and Medicaid Services and the Health Resources and Services Administration. [FactCheck.org, 5/6/11, emphasis added]

For more on IPAB, read our complete primer.

CLAIM: Ryan Claimed The ACA "Raids" Medicare

REP. PAUL RYAN: Unless it's fully repealed, this law will also harm seniors. It raids $500 billion from Medicare. [Politico, 7/31/11]

FACT: The ACA Gets Rid Of "Substantial Overpayments," Is Not A "Raid" On Medicare

New England Journal Of Medicine: The Affordable Care Act 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]

FactCheck.org: Cost Saving Provisions "Not A Slashing Of The Current Medicare Budget Or Benefits." According to FactCheck.org: "Whatever you want to call them, it's a $500 billion reduction in the growth of future spending over 10 years, not a slashing of the current Medicare budget or benefits. It's true that those who get their coverage through Medicare Advantage's private plans (about 22 percent of Medicare enrollees) would see fewer add-on benefits; the bill aims to reduce the heftier payments made by the government to Medicare Advantage plans, compared with regular fee-for-service Medicare. The Democrats' bill also boosts certain benefits: It makes preventive care free and closes the 'doughnut hole,' a current gap in prescription drug coverage for seniors." [FactCheck.org, 3/19/10]

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]

CLAIM: Rep. Ryan Claimed The Health Care Law "Weakened Our Economy And Accelerated Out-Of-Control Government Spending"

REP. PAUL RYAN: One approach has been enshrined into law by President Barack Obama's new health care overhaul, a 2,700-page mistake that has compounded the worst problems in American health care, weakened our economy and accelerated out-of-control government spending. [...]

The debt crisis is, above all, a health care spending crisis. About one-quarter of all federal government spending goes to health care - a percentage that would rise dramatically under the president's new health care law. For taxpayers, employers and families alike, health care costs rose about 8 percent in 2011 and are projected to rise by 8.5 percent in 2012. [Politico, 7/31/11]

FACT: Two Wars, Bush Tax Cuts And A Recession - Not The Health Care law - Are The Major Drivers Of Current And Long-Term Deficits

CBPP: Present "Huge Deficits" Due To Bush Tax Cuts, Wars, And Recession. As the Center for Budget and Policy Priorities explains: "If not for the Bush tax cuts, the deficit-financed wars in Iraq and Afghanistan, and the effects of the worst recession since the Great Depression (including the cost of policymakers' actions to combat it), we would not be facing these huge deficits in the near term." [CBPP.org, 5/10/11]

The Center for Budget and Policy Priorities prepared the following graphic showing that the Bush tax cuts and wars in Iraq and Afghanistan will account for nearly half of public debt by 2019:

[CPBB.org, 5/20/11]

The Bush Tax Cuts Are The Primary Driver Of Federal Budget Deficits Over The Next Decade. Below is a chart from Center on Budget and Policy Priorities showing the deficit impacts of war spending, financial recovery spending, the recession itself, and the Bush tax cuts:

[CBPP.org, 5/10/11]

Continuing Bush Tax Cuts Doom The Long-Term Fiscal Picture. As the Tax Policy Center's William Gale has explained: "The deficits we face over the next decade reflect a fundamental imbalance between spending and revenue, one that goes beyond entitlements. Based on projections by the CBO, Alan Auerbach of the University of California at Berkeley and myself, among others, even if the economy returns to full employment by 2014 and stays there for the rest of the decade, the continuation of current fiscal policies, including the Bush tax cuts, would lead to a national debt in the range of 90 percent of GDP by 2020. That's already the highest rate since just after World War II — and Medicare, Medicaid and Social Security aren't expected to hit their steepest spending increases until after 2020." [Washington Post8/1/10]

FACT: The Health Care Law Reduces The Deficit

CBO: Health Care Reform Repeal Would Increase The Deficit By $230 Billion. In a letter to Speaker John Boehner (R-OH), CBO Director Doug Elmendorf writes:

Because CBO and JCT estimated that the March 2010 health care legislation would reduce budget deficits over the 2010-2019 period and in subsequent years, we expect that repealing that legislation would increase budget deficits. The resulting increase in deficits projected for fiscal years 2012 through 2019 is likely to be similar in size to-but not exactly the same as-the reduction in deficits that was originally estimated to result from the enacted legislation. [...]

As a result of changes in direct spending and revenues, CBO expects that enacting H.R. 2 would probably increase federal budget deficits over the 2012-2019 period by a total of roughly $145 billion (on the basis of the original estimate), plus or minus the effects of technical and economic changes that CBO and JCT will include in the forthcoming estimate. Adding two more years (through 2021) brings the projected increase in deficits to something in the vicinity of $230 billion, plus or minus the effects of technical and economic changes. [CBO, 1/6/11, emphasis added]

CBO: Health Care Reform Package Would Reduce The Deficit By $138 Billion By 2019. According to the Congressional Budget Office: "The reconciliation proposal includes provisions related to health care and revenues, many of which would amend H.R. 3590. It also includes amendments to the Higher Education Act of 1965, which authorizes most federal programs involving postsecondary education. CBO and JCT estimate that enacting both pieces of legislation — H.R. 3590 and the reconciliation proposal — would produce a net reduction in federal deficits of $138 billion over the 2010-2019 period as result of changes in direct spending and revenue." [CBO, 3/18/10]

CLAIM: Rep. Ryan Claimed The "Path To Prosperity" Strengthens Medicare And Medicaid And Is "Like The System That Members Of Congress Enjoy"

REP. PAUL RYAN: There's a better path forward on health care in America: a patient-centered approach that would strengthen critical programs such as Medicare and Medicaid, contain health care costs and improve access and quality. The House-passed budget, "The Path to Prosperity," outlined the beginnings of such an approach by repealing the president's health care law and proposing reforms that would make Medicare and Medicaid stronger and solvent for current and future generations. [...]

In Medicare, this means giving seniors the financial means to choose from a list of Medicare-approved coverage options, like the system that members of Congress enjoy. In Medicaid, it means returning authority over the program to the states and giving them the flexibility to tailor their programs to the diverse needs of their unique populations. And for all Americans, it means making health insurance more portable and more affordable by personalizing the tax credit for health insurance. [Politico, 7/31/11]

FACT: Ryan's "Path To Prosperity" Replaces Medicare Program With Vouchers, Doubling Out-Of-Pocket Expenses For Future Seniors

CBO: Under The GOP Budget, "Most Elderly People Would Pay More For Their Health Care Than They Would Pay Under The Current Medicare System." According to the Congressional Budget Office: "Under the proposal, most elderly people would pay more for their health care than they would pay under the current Medicare system. For a typical 65-year-old with average health spending enrolled in a plan with benefits similar to those currently provided by Medicare, CBO estimated the beneficiary's spending on premiums and out-of-pocket expenditures as a share of a benchmark: what total health care spending would be if a private insurer covered the beneficiary. By 2030, the beneficiary's spending would be 68 percent of that benchmark under the proposal, 25 percent under the extended-baseline scenario, and 30 percent under the alternative fiscal scenario." [CBO.gov, 4/5/11]

Wall Street Journal: GOP Plan "Essentially End[s] Medicare" For Americans Under 55 Years Old. As reported by the Wall Street Journal: "The plan would essentially end Medicare, which now pays most of the health-care bills for 48 million elderly and disabled Americans, as a program that directly pays those bills. Mr. Ryan and other conservatives say this is necessary because of the program's soaring costs. Medicare cost $396.5 billion in 2010 and is projected to rise to $502.8 billion in 2016. At that pace, spending on the program would have doubled between 2002 and 2016. Mr. Ryan's proposal would apply to those currently under the age of 55, and for those Americans would convert Medicare into a 'premium support' system." [Wall Street Journal, 4/4/11]

In 2022, A Typical 65-Year-Old Would Be Paying Approximately Double Compared To Current Levels. The Center on Budget and Policy Priorities prepared a graphic comparing health care spending for a typical 65-year-old under the current system to the same spending under the Republican budget:

[CBPP.org, 4/7/11]

For more on the impact of the Republican Medicare plan on seniors, click HERE.

FACT: While Federal Employees' Health Benefits Increase To Meet Rising Health Care Costs, Republican Medicare Scheme Would Not Be Flexible

Value Of Federal Benefits Adjusts According To Health Care Market But Ryan Plan For Medicare Uses Fixed Voucher Amounts. From Wonk Room: "It's the same rhetoric that Democrats used to sell the health care exchanges that are part of the Affordable Care Act, but in Ryan's case the comparison doesn't hold up. Ryan is constraining the rate of growth in Medicare by offering seniors a defined contribution, regardless of the rate of growth in health care costs. The federal government's contribution in the FEHBP program, by contrast, reflects actual increases in premium levels. As the Office of Personnel Management describes it, the FEHBP formula 'is known as the 'Fair Share' formula because it will maintain a consistent level of Government contributions, as a percentage of total program costs, regardless of which health plan enrollees elect.' The difference is that Ryan's proposal provides seniors with a set amount of money that, in order to reach the kind of savings he's advertising, would have to depreciates every successive year - even as health care costs increase." [Wonk Room, 4/5/11, emphasis added]

PolitiFact: There Are More Differences Than Similarities Between Medicare Proposal And Federal Health Care Benefit. According to a PolitiFact analysis of a similar claim from Rep. Mike Pence (R-IN):

Now let's look at how whether proposal looks like what members of Congress can buy.

  • How the planislike what members of Congress get. We contacted Pence's office to ask about how the Ryan proposal is like what members of Congress get, and they pointed us to the fact that Medicare plans from private insurers will be required to comply with a benefits standard set by the U.S. Office of Personnel Management, as do plans that cover members of Congress.

We should also note that seniors would be able to compare different plans and select from different insurance options, as members of Congress do. The government would pay part of premiums, as it does for members of Congress.

  • How the plan isnotlike what members of Congress get. First, the plans would be created specifically for Medicare beneficiaries on newly created Medicare health insurance exchanges. (Exchanges are virtual marketplaces where people can shop for insurance.)

Second, as Van Hollen pointed out, members of Congress are protected somewhat when health insurance companies raise their rates, through a formula he mentioned known as "Fair Share." Generally speaking, the government pays for 75 percent of the average of the health insurance plans it offers. If the overall plans increase in price, the government still pays 75 percent.

Federal support for premiums in Ryan's plan, though, would not keep pace with medical inflation. Premium support instead would be pegged to the consumer price index, which historically lags health care costs.

Our final point on how the plans differ may seem obvious to some, but we feel it's important to mention: Members of Congress receive employer-based insurance. By definition, that means they receive a salary to help pay for their insurance. The base pay for members of Congress is currently $174,000.

Medicare beneficiaries, on the other hand, tend to make a lot less money, because most of them are retired. The median income for Medicare beneficiaries was $20,644 in 2010. And only 5 percent had incomes exceeding $82,695, according to an analysis by the Kaiser Family Foundation. [PolitiFact.com, 4/13/11, emphasis original]

FACT: "Path To Prosperity" Block Grants For Medicaid Would Kick Poor Families Off Support

"The Path To Prosperity" Creates A Block Grant Program For Medicaid. From "The Path to Prosperity":

Secure the Medicaid benefit by converting the federal share of Medicaid spending into a block grant tailored to meet each state's needs, indexed for inflation and population growth. This reform ends the misguided one-size-fits-all approach that has tied the hands of so many state governments. States will no longer be shackled by federally determined program requirements and enrollment criteria. Instead, they will have the freedom and flexibility to tailor a Medicaid program that fits the needs of their unique populations. [The Path To Prosperity, 4/5/11]

"The Path To Prosperity" Repeals The Affordable Care Act. From "The Path to Prosperity":

The country needs to move away from this centralized system, not towards it. This budget starts by repealing the costly new government-run health care law, saving roughly $725 billion over ten years by repealing the new exchange subsidies and making sure that not a penny goes toward implementing the new law [PPACA]. [The Path To Prosperity, 4/5/11]

Repealing Affordable Care Act And Implementing Block Grants "Would Push Tens Of Millions Of Americans Into The Ranks For The Uninsured." According to the Center on Budget and Policy Priorities:

In health care, the Ryan plan's changes would push tens of millions of Americans into the ranks for the uninsured and underinsured - and create more of a two-tier health care system in which health care is increasingly rationed by income. The plan repeals the provisions of health reform that CBO expects will extend coverage to 34 million Americans who otherwise would be uninsured. It then cuts another $771 billion out of Medicaid over the coming decade for a total of $1.4 trillion in Medicaid cuts.

Ryan claims that converting Medicaid to a block grant will enable states to do more with fewer resources, but the claim does not withstand scrutiny. Medicaid costs significantly less per beneficiary than private-sector care, and its costs per beneficiary have been rising more slowly than private-sector health costs. Most states already make heavy use of managed care in their Medicaid programs and already enjoy considerable flexibility under federal law. The notion that policymakers can cut $771 billion from the program without sharply reducing both the number of low-income Americans who are insured and the coverage that Medicaid beneficiaries receive is at odds with reality. Low-income children, seniors, and people with disabilities would be hit the hardest, since they constitute the bulk of the program's beneficiaries. [CBPP.org, 4/6/11, emphasis added]

Cutting Federal Medicaid Funding Forces States To Come Up With The Money Elsewhere - Or Cut Medicaid Spending, Reduce Eligibility, Or Cut Benefits. In its analysis of "The Path To Prosperity," the Congressional Budget Office wrote: "If the costs of medical services for Medicaid enrollees continued to rise faster than the growth in the block grant amounts, states would have to decide how to respond. Under the proposal, states would have additional flexibility to design and manage their programs to achieve greater efficiencies in the delivery of care. Because of the magnitude of the reduction in federal Medicaid spending under the proposal, however, states would face significant challenges in achieving sufficient cost savings through efficiencies to mitigate the loss of federal funding. To maintain current service levels in the Medicaid program, states would probably need to consider additional changes, such as reducing their spending on other programs or raising additional revenues. Alternatively, states could reduce the size of their Medicaid programs by cutting payment rates for doctors, hospitals, or nursing homes; reducing the scope of benefits covered; or limiting eligibility. To some extent, under CBO's long-run projections, the rise in health care costs under current law would cause states to implement such changes anyway. However, given the size of the reduction in federal spending under the proposal, the magnitude of the changes would probably have to be greater." [CBO, 4/5/11, emphasis added]

For more information on the Republican plan for Medicaid, click HERE.

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