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Republican Claims on Their Budget Better Describe the Affordable Care Act, Part II

The Affordable Care Act Extends the Life of Medicare While the House Republican Budget Ends It

SOURCE: AP/John Russell

Residents of a retirement home in Hermitage, Tennessee, listen as new Medicare options are explained to them. The GOP budget would replace the guaranteed Medicare benefit with a voucher program.

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This column is the second of a series that examines claims House Republicans make to defend their budget that actually better describe the Affordable Care Act. The focus of this column is the claim that the House’s budget “saves” Medicare. They also charge that implementing the Affordable Care Act would let the program go bankrupt. In reality, the House plan takes away guaranteed benefits and makes seniors pay more for their health care. The Affordable Care Act keeps guaranteed benefits and works to make the program more efficient and reduce costs.

The House budget ends Medicare for future beneficiaries and shifts costs onto seniors

There is widespread agreement that we need to get health care costs under control. To address this issue, the House of Representatives passed a budget that ends the guaranteed Medicare benefit for those born after 1956. In Medicare’s place, beneficiaries would receive government support, or a voucher, to help purchase a private plan. The value of the voucher would increase with inflation.

The problem is that the voucher’s value would shrink over time since health care costs increase faster than inflation. Beneficiaries, therefore, will pay more out of pocket. In fact, the nonpartisan Congressional Budget Office found that a typical 65-year-old in 2022 would pay double what they would pay under the traditional Medicare program, or $6,400 more.

Thus, the House’s approach to control health care costs is to shift them onto seniors.

The Affordable Care Act extends the life of the Medicare trust fund

The Affordable Care Act takes another approach to control rising health care costs. It maintains the traditional guaranteed Medicare benefits instead of ending the program for future beneficiaries. The law makes Medicare more efficient and finds savings in the program while maintaining benefits for seniors. It does this in two key ways.

First, it ends overpayments to insurance companies in the Medicare Advantage program. Before, the government was paying insurance companies participating in Medicare Advantage roughly 14 percent more for the same benefits in Medicare.

Second, it makes changes in payments to providers, including slower growth rates for hospital payments. These changes have strengthened the Medicare trust fund. Last week, the Social Security and Medicare Trustees released their report showing the Affordable Care Act extended the life of the Medicare hospital insurance trust fund by eight years.

Conclusion

Shoring up Medicare for future generations will require a lot of work. But we have a choice on how we do it.

House Republicans claim that they are saving Medicare, but their budget ends the program as we know it and puts the burden of higher costs onto seniors. The Affordable Care Act protects traditional benefits and makes the program more efficient.

Tony Carrk is Policy Director for the ThinkProgress War Room.

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