Romney and Obama: Both Wrong on Medicare

Let's try to put the ongoing debate over the future of Medicare into a little bit of context. Last year, Americans paid $274 billion in Medicare taxes and premiums. At the same time, the program paid out $564 billion in benefits. That amounts to a shortfall of roughly $290 billion. Looking into the future, even the most optimistic estimate by the program's trustees puts Medicare's future unfunded liabilities at more than $38.6 trillion. More realistic projections suggest the shortfall could easily top $90 trillion.

Faced with this ocean of red ink, the Obama and Romney campaigns are busy claiming that the other guy wants to cut Medicare. They, on the other hand, would never think for a moment about cutting anyone's Medicare benefits. Hello. Can anyone out there do math?
Start with Mitt Romney, who claims that President Obama "stole" $716 billion from Medicare. Yes, Romney is correct that the new health care law would reduce Medicare spending by $716 billion the next 10 years. Primarily, the president would cut payments for Medicare Advantage insurance plans, a private insurance option currently used by roughly one in five seniors, and by reducing payments to providers—that is, doctors and hospitals. The health care law also includes several pilot projects, such as Accountable Care Organizations (ACOs) and medical homes, designed to reduce the long term growth in health care costs.
It is important to point out that the president's "cuts" are cuts only in the Washington sense of a reduction in the rate of increase. Republicans have long protested when their similar proposed slowdowns in growth were demagogued as cuts by Democrats. That would seem to make Romney and Ryan's complaint a little hypocritical.

Read more: http://www.cato.org/publications/commentary/romney-obama-both-wrong-medicare