PolitiFact | Mitt Romney said Barack Obama robs Medicare of more than $700 billion to pay for Obamacare
$700 billion from Medicare?
The claim that Obama cut $700 billion out of Medicare is relatively new. Not long ago, the oft-cited number was $500 billion. How did he manage to cut another $200 billion when no one was looking?
First things first: Neither Obama nor his health care law literally cut a dollar amount from the Medicare program’s budget.
Rather, the health care law instituted a number of changes to try to bring down future health care costs in the program. At the time the law was passed, those reductions amounted to $500 billion over the next 10 years.
What kind of spending reductions are we talking about? They were mainly aimed at insurance companies and hospitals, not beneficiaries. The law makes significant reductions to Medicare Advantage, a subset of Medicare plans run by private insurers. Medicare Advantage was started under President George W. Bush, and the idea was that competition among the private insurers would reduce costs. But in recent years the plans have actually cost more than traditional Medicare. So the health care law scales back the payments to private insurers.
Hospitals, too, will be paid less if they have too many re-admissions, or if they fail to meet other new benchmarks for patient care.
