Fact Check: Romney’s Plan to ‘Restore’ Medicare Spending Cuts

Aug 16, 2012 1:54pm

Mitt Romney is trying to seize the high ground in the Medicare debate by pledging to “restore” $716 billion in spending cuts imposed by President Obama.

Never mind that the cuts were once backed by his vice presidential running mate, Paul Ryan. Romney argues that it’s Obama who has already “ended Medicare as we know it,” and he will be the guy to fix it.

“The president has taken action in Medicare which significantly impacts the kind of health care opportunities and benefits that will be provided to current seniors,” Romney said today at an impromptu news conference in South Carolina. “Our plan [has] no change for current seniors and those 55 and older.”

In staking out that position — calling for a reversal of the cuts, now directed to help pay for Obamacare — Romney is, however, making something of a gamble.

First, it makes Romney appear willing to restore more favorable conditions for “waste, fraud and abuse” — at least in the short term.

Repealing the entirety of the Affordable Care Act would mean the elimination of new protections that are already recouping record-high sums of wasted Medicare cash.

Of the estimated $70 billion of Medicare waste in 2010, for example, regulators have recovered an unprecedented $4 billion thanks to the new measures, according to the nonpartisan Center for Medicare Advocacy.

A Romney campaign official explains that the former governor would address the issue of “waste, fraud and abuse” separately, but did not offer specific details.

“Once Obamacare has been wiped off the books, America can move forward with patient-centered reforms that improve access and control cost, as well as with entitlement reform that eliminates waste, fraud and abuse while protecting Medicare for current seniors and strengthening it for future generations,” the official said.

A bigger issue with Romney’s plan to “restore” Medicare cuts under Obamacare could be the impact on the solvency of the program, which was extended by 8 years to 2024 under the health care law.

Restoring the original, higher Medicare payout rates to providers could accelerate the program’s path to bankruptcy, experts say — at least until a Romney plan to convert the program into a fixed-benefit, voucher-style system could be put in place.

“Gov. Romney’s plan is to repeal Obamacare and replace it with patient-centered reforms that control cost throughout the health care system and extend the solvency of Medicare,” said Romney spokeswoman Andrea Saul.

“He will then implement real entitlement reform that places Medicare on a sustainable long-term footing so that future generations of Americans will not have to worry whether the program will be there for them,” she said.

Romney has offered broad outlines of his plan, but he has not offered details or predictions of its affect on Medicare spending. The lack of details has also made it impossible for independent analysts to assess its impact on Medicare solvency.

Obama campaign spokeswoman Lis Smith said the entire Medicare debate highlights the lack of substance in Romney’s proposals, even though he promised to provide more.

“He’s criticized the President’s policies that extended the solvency of Medicare by cutting waste, fraud, and abuse, but he’s provided no details about how he’d replace them. All we do know about Mitt Romney’s plan is that he would end Medicare as we know it by turning it into a voucher system, which could increase health care costs by $6,400 a year. This would be nothing short of a disaster,” she said.

For now, Romney appears to be banking on winning the ear of wealthier older folks enrolled in Medicare Advantage programs, which provide extra benefits to traditional Medicare for those who opt in.

One in four Medicare recipients now have Advantage plans. Romney, backed by a report by the Medicare trustees and several independent experts, claims the Obama spending cuts could reduce those benefits, with smaller subsidies to providers, meaning higher premiums or fewer extra benefits.

“The effect of this will be felt directly by beneficiaries, not simply providers and insurers, because that is how the real world works,” wrote Romney economic adviser Oren Cass on the campaign’s blog. ” Costs are passed along, services are curtailed, and the quality of care worsens.”

Bill Galston, a former Clinton adviser and senior fellow at the Brookings Institution, didn’t dispute the claim outright, though he said “it is speculative, at best.”

“Whether the providers will respond by reducing access to services or the quality of those services, or respond the way the administration hopes they will by continuing to deliver the services at a lower profit margin, remains to be seen,” Galston said.

“Health care experts are divided on the question of whether the Obama reductions in Medicare will have negative consequences for beneficiaries,” he concluded.

Get more pure politics at ABC News.com/Politics and a lighter take on the news at OTUSNews.com

This post was updated to include comment from Oren Cass.

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