Brian Beutler advances the story about the manufactured Medicare crisis Mitt Romney has planned, and gets a curious response from one of Romney’s health care advisors.
The story so far: Romney has stated that he would roll back the savings that extended the life of the Medicare trust fund. By doing this, he would ensure that the trust fund would become insolvent by 2016, the final year of a Romney first term. At that point, Romney would have to cut the program for current beneficiaries, or find savings or revenues elsewhere. The program could not remain exactly the same for current seniors, as the Romney campaign has claimed. To this point, the only policies Romney’s campaign has proposed to deal with this problem include cuts to beneficiaries, in the form of increasing the Medicare eligibility age or means-testing for wealthier seniors. In addition, restoring the “Medicare cuts” from the Affordable Care Act, which mostly means increasing subsidies to insurance companies and health care providers, also means that co-pays and premiums for current seniors likely go up, because they share costs that will now increase.
So here’s Avik Roy’s response:
Avik Roy — an outside health care adviser to the Romney campaign — says Romney’s best move would be a fifth option: to cut spending elsewhere in the budget, and use the savings to finance Medicare.
“I think the Tom Coburn document is a great place to look for offsets,” Roy said in a Tuesday telephone interview, referring to the Oklahoma senator’s plan to reduce deficits by $9 trillion. “There is a pretty large menu in there. … The GAO came out with a report where they found $100 billion in savings from redundant and duplicative programs.” […]
“The campaign has been very consistent, and I confirmed this today, that they will not change the program for current beneficiaries or anyone over the age of 55,” Roy said. “That includes means testing and [raising the] retirement age.”
So Roy, who granted is an outside advisor, suggests putting general budget savings into the Medicare program. This is exactly the nightmare that Republicans have been warning about exploding health care costs – that they would eat up more and more of the federal budget. Furthermore, I don’t even think this would work – you’re talking about budgetary savings in the Coburn document. To apply those to the Medicare trust fund, you would have to designate a portion of general revenues over. You cannot say “we saved in this pot, so we can spend more in that pot.” That’s not how trust fund accounting works. So what Roy really calls for is the dissolution of the Medicare trust fund as an outside, dedicated revenue source for Medicare. This is exactly what Republicans fear, in other contexts.
Paul Van de Water of the Center on Budget and Policy Priorities told Beutler that “Devoting general revenues to hospital insurance would be a major change.” Yes, it would. And it would pit the powerful senior voting bloc against all the other stakeholders in the budget, very directly, by opening up Medicare to general revenues. This is how you’ll get to the crushing of Medicaid, food stamps, and other social insurance programs for the poor – the “savings” there will flow into Medicare, so that insurance companies and medical providers get bigger subsidies and higher reimbursement rates.
And of course, Roy is silent about the increases to co-pays and premiums for current seniors – not to mention the return of the Medicare Part D “doughnut hole” by repealing the Affordable Care Act. Those constitute increased costs for current seniors as well, unless Roy wants to plug that with general revenue too. The Medicare monster grows!
Far too little is being made out of these issues.