Dean Baker on Medicare (and pundit amnesia)

(Cross-posted from the blog of the Center for Economic and Policy Research)

By Dean Baker

It is popular among Washington elite types to tut-tut criticisms of the plan put forward by Representative Ryan and the Republicans to replace Medicare with a voucher program by claiming that “at least he has a plan.” This is supposed to be in contrast to President Obama and the Democrats who have no plan to deal with Medicare’s projected shortfall.

It’s possible that these Washington insiders missed it, but President Obama and the Democrats pushed through a piece of legislation called the “Affordable Care Act.” This bill proposes a number of mechanisms for containing costs within the Medicare program. As a result the projected shortfall has fallen by almost two-thirds, from 3.88 percent of taxable payroll in the 2009 Medicare Trustees Report to 1.35 percent of taxable payroll in the 2012 Medicare Trustees Report.

People can criticize the mechanisms the ACA put in place or complain that they did not go far enough, but to claim that President Obama and the Democrats did nothing to address the projected shortfall in Medicare is not true.


  1. Frank Burns

    August 15, 2012 at 2:14 pm

    The Obama plan is take funds from Medicare and use them to fund Obamacare. Is that the plan you were talking about? It sounds like Obama is pushing grandma over the cliff.

  2. frances

    August 15, 2012 at 2:59 pm

    Taking almost $ 716 Billion from Medicare- is that a plan ?

  3. david esmay

    August 15, 2012 at 3:55 pm

    Stop hyping that neo-con lie Frank. The charge that the ACA will cut 700 billion from medicare is a Romney lie that has been proven false over and over, yet like all repubs, he thinks by repeating it, it will magically come true. The savings in the Presidents plan come from cutting payments to drug companies, hospitals, and other providers, not in cutting payments to beneficiaries.
    On the other hand, Mittsy and Ryand want to raise the age for eligibility and hand grandma a voucher, forcing seniors to pay an increase of $6,500 a year.
    Frank and Frances, you are proof that repubs think willful ignorance is a virtue.

  4. Doug

    August 15, 2012 at 7:30 pm

    david,when all of that money is cut from providers, who do you think will end up paying in the end as costs are shifted to the private side. You are very naive if you think they will just eat these shortfalls. Don’t stay up too late trying to figure this out !

  5. Doug

    August 15, 2012 at 7:37 pm


    Good article on the Obamacare cuts to Medicare—-providers will not provide services at those rates

  6. Frank Burns

    August 15, 2012 at 7:45 pm

    David, the fact is with Obamacare it takes over 700 billion from the Medicare fund to pay for Obamacare. You refuse to see the truth, your choice.

  7. Greg Flynn

    August 15, 2012 at 9:35 pm

    30% of the $700 billion is eliminating the subsidy for excess cost to Medicare Advantage, the private alternative that was supposed to reduce cost, not increase it. 35% is a reduction in hospital reimbursement rates which hospitals agreed to because they will see more patients under the ACA. The remaining 35% is a grab bag of smaller cuts. None of the cuts reduce Medicare benefits. It’s taking healthcare savings to pay for healthcare.

  8. Alex

    August 16, 2012 at 8:06 am

    If you believe that fantasy greg, I’ve got some great property to show you !

  9. david esmay

    August 16, 2012 at 9:37 am

    Here are the facts and the difference between the President’s plan and R/R plan.
    The President did take 713 million out of Medicare and put it in the ACA.
    A. He took it from insurance companies mainly, but also from other entities where fraudulent duplicity was gouging medicare to the tune of 713 million.
    B. He put it back in Medicare to extend the solvency of Medicare for an additional 8 years as we deal with the aging baby boomers, who by numbers alone will stress the system until they pass.
    C. The American people have benefited from this by taking fraudulently claimed monies by insurance companies and other providers and gave Medicare much needed infusion.

    Ryan’s highly touted plan, highly touted by insurance companies, takes the same 713 million and-
    A. Gives it right back to insurance companies.
    B. Shortens the life of medicare.
    C. Soaks Romney/Ryan’s hands in the very blood they accuse the President to be guilty of.

    Millions of 54 year olds in this country, people like me, will not tolerate Ryand’s vulture voucher plan for Medicare and will let them know about it in November.

  10. frances

    August 16, 2012 at 9:58 am

    david, the more you post the more I worry !

  11. david esmay

    August 16, 2012 at 10:13 am

    Why don’t you do a little research frances.

  12. frances

    August 16, 2012 at 7:17 pm

    I can definitely recommend some professional resources.

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