Medicare Panic-peddlers are Bad at Math

A report out today from the Center for Medicare and Medicaid Studies points out that the Affordable Care Act is going to save taxpayers $200 billion through 2016 in Medicare spending alone - by ending private insurance giveaways, reforming payment incentives, and other provisions. The 2012 Medicare trustees' report, also released today, points out that the ACA is responsible for extending the life of the Medicare trust fund by at least 8 years.

Of course, conservatives are angry. Not because Medicare might become insolvent, but because President Obama and the Democrats won't let the Republicans use the veil of crisis to turn Medicare into Coupon-care, which could be run by big insurance companies and leave seniors holding the bag for premiums exceeding the amounts of their Ryan-care coupons. We have seen before on TPV that ending the Affordable Care Act is Paul Ryan's holy grail to achieving his goal of killing Medicare. And so along comes Avik Roy, Wall Street's health care "investment" foot-licker, Mitt Romney adviser (yes, redundant, I know) and Forbes columnist, to flat out lie about the Medicare Trustees' report and say that the Administration is "double counting" Medicare's savings and that Medicare is really going bankrupt in 2016.

How so? In Roy's words,
Think of it this way: if supporters of the Affordable Care Act came clean, they would say one of two things: (1) Medicare is going bankrupt in 2016, but the CBO scores the ACA as deficit neutral; or (2) Medicare is going bankrupt in 2024, and Blahous’ score of the ACA as increasing the deficit by $300-500 billion is accurate.
Umm, what? What does that even mean? See, he's referring to a bizarre "analysis" put forward by another right wing "economist", which assumes that since by law, Medicare is not allowed to overspend once the trust fund runs out, that the Affordable Care Act increases spending by the mere fact that it extends the life of the Medicare trust fund. Part of the way the ACA is paid for is it reduces overpayments to private insurance companies in Medicare by about $500 billion over 10 years. This, wingnuts say, would have gone away anyway since Medicare would be out of money (never mind the consequence of that being that people will be out of luck) anyway, and so that $500 billion is not "real" savings, but it is "real" spending in other parts of Medicare - specifically in lengthening its life, and ergo, bingo, the ACA blows a hole amounting to a half a trillion dollars.

Follow all that? No? Don't worry. It's not supposed to make sense.

So here's the double-counting they are referring to: the President is counting the savings in Medicare once, as, you know, savings in Medicare, and one more time as a reduction in the deficit. Which, of course, is not a double counting at all - it's savings - savings counted in the whole of the federal budget as a result of savings in Medicare. Say you save $100 in a month by biking to work instead of driving a few times a week. Is it double counting to say that you saved $100 in gas and as a result, $100 in your family budget? Republicans think that it is. To paraphrase the none-too-bring Roy, think of it this way, if opponents of the Affordable Care Act came clean (ahahahaha, I know, I know), they would admit one of two things: (1) they are complete morons themselves; and (2) they think that you are.

Having the trust fund run out in 2024 is, of course, no reason to celebrate, although, as Wonkblog has brilliantly showed, the Medicare trust fund has been projected to run out of money in short order essentially since reports have existed, and freakouts about Medicare's impending death have been greatly exaggerated. The truth is that Medicare's costs are a serious policy issue, and they need to be dealt with seriously. But the panic peddlers - like Romney, Ryan and the whole Republican establishment, and their willing media lemmings, like Avik Roy - have no interest in actually making Medicare work. In fact, they have an interest in doing the exact opposite - to convince the American people that it isn't working and should be broken up and sold off to private insurance companies who will then be free to determine what kind of health care you can get. Ah, the joys of the "free market."

There are a lot of reasons these panic peddlers are unsuccessful in their efforts to end Medicare. One reason is President Obama standing in their way and protecting Medicare. Another is the Affordable Care Act. Another is that we actually happen to like Medicare. But I learned another reason their attempts are failing: they are terrible at math.