Obama, Biden Now Sing Different Tune on Medicare ‘Cuts’

Nov 1, 2012 11:35am
gty barack obama joe biden ll 120907 wblog Obama, Biden Now Sing Different Tune on Medicare Cuts

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Democrats have defended the $716 billion in Medicare savings in the health care law by arguing that seniors would not be affected because  the only spending cuts would be in future payments made to Medicare providers — there would be no cuts whatsoever to actual Medicare benefits.

But in 2005, then Sens. Joe Biden and Barack Obama had an entirely different view of spending reductions to Medicare providers.

First, some context: The $716 billion in Medicare cost savings in the health care law includes $415 billion in reduced future payments to providers (primarily hospitals, Medicare Advantage, home care, and about $20 billion in fraud prevention). These are only “cuts” in the way Washington defines “cuts” — the payments to providers continue to rise, but at a slower rate.

Now flashback to 2005. To help pay for the new Medicare prescription drug benefit, the Bush administration proposed essentially the same thing: reducing future payments to Medicare providers.

The only real difference: The Bush Medicare cost savings end up being only about $16 billion over five years — a trifling sum when compared with the $415 billion in reduced payments included in the Obama administration’s health care law.

How did Sens. Joe Biden and Barack Obama react to President Bush’s proposed cost savings? Well, they sounded like Mitt Romney does today when he talks about “Obamacare.”

Obama and Biden joined their fellow Democratic senators in signing a letter to President Bush warning that the reduced planned payments to Medicare providers could limit seniors’ access to quality care.

“Medicare provides vital insurance to millions of Americans,” said the letter, dated Jan. 31, 2005. “The program does face long-term cost pressures as a result of the rising cost of health care, which is affecting all types of health insurance. However, cutting reimbursement to providers who serve our seniors could limit their access to services.”

The letter argued that Medicare providers would likely be forced to reduce health benefits available to seniors if providers’ Medicare payments were reduced. (Read the 2005 Medicare letter here.)

“Overall Medicare profit margins for hospitals are projected to be minus 1.5 percent this year, meaning hospitals are already losing money by treating Medicare patients,” said the letter.

The letter concluded with an impassioned plea for President Bush to avoid any spending cuts to government health care programs.

“Our nation needs your commitment to stand firm against direct cuts to Medicare, Medicaid and veterans’ health care.”

Fast forward a few years, and both Biden and Obama have a different view of reduced future payments to Medicare providers. And, of course, so do Republicans, who are now harshly criticizing what they defended when a Republican president proposed it.

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