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Does ObamaCare cut Medicare?

Welcome to   Our friends over at took a look at this statement on your behalf:

"Obama is the only president to ever cut $500 billion from Medicare".

They rated that statement False, and said, "It wasn't a cut, rather a reduction in future growth".

Like we do here at VoteFacts, we prefer not to take things at immediate face value, and instead dig a bit deeper to learn as many facts as we can before deciding what we believe (something we encourage with our readers).

Here is what we found with their report. 

Although they point out that it can be argued that other presidents have cut Medicare in the past, they also say, "That's a historical footnote, however, that doesn't affect our ruling".

In other words, their False ruling has nothing to do with the fact that President Obama is not the only president to cut Medicare.  Interestingly, their False ruling also does not rest on anything related to the assertion of $500 billion dollars in the statement.  Instead, the "facts" supporting their False rating appear to rest solely upon their belief that it was not a "cut", but was instead a "reduction in future growth".

We have seen this before with our friends at Politifact, where their true/false rating rests solely upon their researchers feelings or opinions about things like a word, and they seem to forget to focus on the important facts of the matter.

So let's dig a little deeper into the word cut, since their False rating is so heavily weighted toward the use of that word.  Here are some dictionary definitions of the word "cut".

From   Education.Yahoo.Com

Cut - To reduce the size, extent, or duration of; curtail or shorten: cut a payroll; cut a budget; cut the cooking time in half.

From The Free Dictionary

Cut - To reduce or decrease;  To reduce the amount taken or used


So Politifact says that it, "wasn't a cut, rather a reduction in future growth."  Meanwhile, the dictionaries say that a cut is a reduction in amount taken or used. 

You can decide for yourself if a reduction in future growth constitutes a cut, but while we are at this dictionary thing, let's take a closer look at some of the other words used to describe what will happen with Medicare dollars due to ObamaCare.  

Here are words used to describe the Medicare reductions by the government analysts over at the Center for Medicare and Medicaid Services (CMS), the Congressional Budget Office (CBO), and the Congressional Research Service (CRS) and some dictionary definitions of frequently used terms. 


Reduction - The amount by which something is reduced or diminished.

From The Free Dictionary

Savings - A reduction in expenditure or cost.

Words from the government reports.

The Congressional Budget Office (CBO)

On the basis of the cuts in payment rates under the new health care law (PPACA and the Reconciliation Act), along with the effects of the sustainable growth rate mechanism, CBO projects that Medicare spending per beneficiary will increase at an average annual rate of less than 2 percent during the next two decades—compared with the rate of roughly 4 percent under prior law.  CBO, Page 29, Paragraph 3

The legislation will have a number of effects on the federal budget—including added spending to subsidize the purchase of health insurance and increased outlays for Medicaid, as well as reductions in outlays for Medicare and added revenues from taxes, fees, and penalties.  CBO, Page 2

Medicare's payment rates for physicians' services are slated to drop by 27 percent in January 2013 and by additional amounts in later years.  CBO, Page 14

The PPACA created the Independent Payment Advisory Board (IPAB) to “reduce the per capita rate of growth in Medicare spending."  CRS, Page 1

The Center for Medicare and Medicaid Services (CMS)

The new health care law includes a number of provisions that are intended, in part, to help control health care costs and to change the overall trend in health spending growth.   Many of these are specific to the Medicare program.  CMS, Page 12

The reduction in Part B benefits shown for 2013 reflects the estimated physician payment update of -30.9 percent under the sustainable growth rate system (SGR).  CMS, Page 101

The PPACA introduces permanent annual productivity adjustments to price updates for most providers (such as hospitals, skilled nursing facilities, and home health agencies).   CMS, Page 9

...the legislation contains various provisions that will substantially reduce spending on Medicare relative to what would have occurred under prior law.  CMS, Page 8

PPACA incorporates numerous Medicare payment provisions to slow the rate of growth in federal health care costs, including reductions in Medicare Advantage (MA) plan payments and a lowering of the annual payment update for hospitals and certain other providers.  PPACA also establishes an Independent Payment Advisory Board (IPAB) to make recommendations for achieving specific Medicare spending reductions if costs exceed a target growth rate.   CRS, Page 3

Cuts, drop, reductions, control, adjustments...  That is a lot of different terms to express Medicare "reductions".  But are they all really so different?  Or are they just different ways to describe the same thing - less Medicare spending per beneficiary.

Interestingly, President Obama nodded and said "right" to the word cut when discussing the Medicare reductions in an interview with Jake Tapper of ABC News back in November of 2009.  You can watch the video in the upper right.

Potatoe, Potato, Tomatoe, Tomato...Let's call the whole thing off!   But before we leave this particular Politifact post and have you vote on the word cut, we also noticed Politifact reported to you that, "The law does not take money out of the current Medicare budget..."   That is certainly a fact that warrants investigating.  So we did.

While using the word "current" may make that statement accurate since many provisions of the law don't begin until 2014, we think it has the potential to mislead readers into believing that no funds are taken from the Medicare trust fund impacting current beneficiaries.   But here is what researchers at the Congressional Research Service (CRS) reported:  

"A fund created by the PPACA will support comparative effectiveness research through FY2019 with a mix of appropriations and transfers from the Medicare trust funds.  Several other provisions require the HHS Secretary to transfer amounts from the Medicare Part A and Part B trust funds for specified purposes."   CRS, Page 1  

"The new health care law (PPACA) appropriates and transfers from the Medicare trust funds billions of dollars over the coming years to support many of the law’s provisions.  They include providing funding for states to plan and establish exchanges (once established, exchanges must become self-sustaining), and support for a center to test innovative payment and service delivery models."  CRS, Page 4

So really, we want to hear from our readers.  Whether or not you love the new health care law or hate it, is there such a big difference between a spending cut and a spending reduction, when either way it means spending less Medicare dollars for current and future beneficiaries?  Go up there and cast your vote.

Politifact is a registered trademark of the Tampa Bay Times and the Times Publishing Company, St. Petersburg, FL.


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ObamaCare cuts Medicare. Fact or Fiction?
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Voting Key

Fact = 100% - 92% True
Mostly Fact = 91% - 75% True
Slightly Fact = 74% - 60% True
Split = 59% - 50% True
Slightly Fiction = 49% - 30% True
Mostly Fiction = 29% - 10% True
Fiction = 9% - 0% True