Brian Beutler, TPM: Mitt’s Medicare Time Bomb

[highplainsdem]

http://tpmdc.talkingpointsmemo.com/2012/08/mitts-medicare-time-bomb.php

By overturning the Affordable Care Act, Romney will restore major spending commitments to the program — billions of dollars worth of higher reimbursements for private insurance companies and hospitals that Obama cut out of the program.

Because Medicare is built upon a trust fund accounting system, that commitment — $700 billion over the next 10 years — will deplete the program’s existing finances and hasten its insolvency by years. In 2016, under Romney’s plan, Medicare will be out of money, and he and Congress will likely have to choose between finding other savings in the program, raising Medicare taxes, abruptly slashing benefits for current seniors, or a combination thereof.

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.

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If Romney failed to shore up the trust fund, and it ran out of money, the law holds that Medicare spending drop and be held at the same level at which revenues are flowing into the system, Van de Water says, cautioning that this is uncharted territory. That would constitute a major, and growing, cut most likely to providers first, but ultimately to current beneficiaries.

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And this budget disaster for Medicare will be on top of the other harm done to current and future recipients by Romney's plan to repeal the Affordable Care Act, which will mean "removing existing Medicare benefits — prescription drug rebates, preventive and wellness coverage" -- created by the ACA.