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The Ryan budget includes exactly the same Medicare savings that Obama signed into law.

Welcome to VoteFacts.  Yesterday we looked at the facts relating to the new health care law and the $716 billion dollars in spending cuts from Medicare over the next 10 years under the Obama plan. Today, we want to expand that conversation to include the other side and look at Medicare over the next 10 years under the most recent plan by Vice Presidential candidate Paul Ryan.

From an article by the Daily Beast, we read this statement, "...the Ryan budget includes exactly the same [Medicare] savings that Obama signed into law."  We think readers will want to take some time to focus on facts when it comes to the Medicare cuts.

First, let's be clear that we are talking about Paul Ryan's plan - the potential Vice President, but the potential president, Mitt Romney, has his own plan. Unfortunately, the Romney plan has not been processed through the Congressional Budget Office (CBO) for full non-partisan analysis. However, the large pieces that we can see of the Romney plan are the same as the Ryan plan - Both call for nothing to change for current seniors or those retiring soon, both call for changing Medicare for future beneficiaries to a premium support system with the ability to choose traditional Medicare, both call for lower income seniors to receive a higher premium support payment than higher income seniors. Further, both Romney and Ryan have said time and again that they would repeal President Obama's health care law and replace it with what they call "common sense solutions" to our health care cost and access problems. If they do repeal the new law without quickly replacing it with policies to strengthen the Medicare program, the main fund would be exhausted in 2017 instead of the projected 2022-2024, according to the Center for Medicare and Medicaid Services (CMS).   CMS, Page 63

So how closely does the Ryan plan follow the Obama plan when it comes to that $716 billion in Medicare cuts to current generation seniors? Let's go to the CBO and CMS reports for those bullet points:

• The [Ryan] proposal would repeal the provisions that created the Independent Payment Advisory Board (IPAB) and that expanded subsidies for the “coverage gap” in Part D (a range of spending in which many enrollees have to pay all of their drug costs, sometimes called the doughnut hole). Most of the other changes that the Obama health care law made to the Medicare program would be retained.   CBO, Page 10

The Congressional Budget Office noted in their analysis of the Ryan plan that "On the basis of the specifications provided by Chairman Ryan’s staff, CBO’s analysis included no change in the sustainable growth rate mechanism for payments to physicians under Medicare." In other words, the physician rate cuts that are scheduled to happen under current law were not stopped in the Ryan plan.

So in the end, the Ryan plan only repeals the IPAB, and the spending reductions that go along with it. According to the Center for Medicare and Medicaid Services, the spending reductions due to the IPAB were projected to be $24 billion dollars during their original projection period of 2010-2019.   CMS, Page 8

The Congressional Budget Office puts the IPAB savings at a much lower number of $3 billion.   CBO, Page 14

What this tells us is that the Ryan plan includes $3-24 billion dollars less spending reductions between now and 2019-2022 than under the Obama plan.  Where do the savings go with the Ryan plan?  According to the CBO, it goes toward strengthening the federal budget:

"Under the Ryan proposal, the federal budget would show a deficit of about 2 percent of GDP in 2022 and 2030; the federal budget would show a slight surplus in 2040 and growing surpluses in the following decade.  The improvement in the long-term budget outlook under the proposal is attributable to the sharp reduction in spending excluding interest costs, which would be lower than projected spending under the extended-baseline and alternative fiscal scenarios in 2050 by almost 12 percentage points and almost 15 percentage points of GDP, respectively."  CBO, Page 18

Soon, we will also tackle this statement from Yahoo News, "The cuts do not affect Medicare recipients directly, but rather reduce payments to hospitals, health insurance plans and other service providers."  We think that deserves a drive down fact lane as well.  But for today - Fact or Fiction - Paul Ryan himself endorses the same $716 billion dollar Medicare cuts in his signature budget plan.

VoteFacts original post date:  September 5, 2012

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Does the Ryan budget include exactly the same Medicare savings that Obama signed into law?
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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