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Home Publications Blogs Beat the Press President Obama's Medicare Plan Eliminated Two-Thirds of the Projected Shortfall: Tell a Reporter or Columnist Near You

President Obama's Medicare Plan Eliminated Two-Thirds of the Projected Shortfall: Tell a Reporter or Columnist Near You

Wednesday, 15 August 2012 11:45

It is popular among Washington elite types to tut-tut criticisms of the plan put forward by Representative Ryan and the Republicans to replace Medicare with a voucher program by claiming that "at least he has a plan." This is supposed to be in contrast to President Obama and the Democrats who have no plan to deal with Medicare's projected shortfall.

It's possible that these Washington insiders missed it, but President Obama and the Democrats pushed through a piece of legislation called the "Affordable Care Act." This bill proposes a number of mechanisms for containing costs within the Medicare program. As a result the projected shortfall has fallen by almost two-thirds, from 3.88 percent of taxable payroll in the 2009 Medicare Trustees Report to 1.35 percent of taxable payroll in the 2012 Medicare Trustees Report.

People can criticize the mechanisms the ACA put in place or complain that they did not go far enough, but to claim that President Obama and the Democrats did nothing to address the projected shortfall in Medicare is not true.

Comments (7)Add Comment
it's worse than that
written by saurabh, August 15, 2012 12:42
Ironically, the Republican line has been that the cost-containment measures, which will result in decreased Medicare spending, are "cuts" and that Obama is "gutting" Medicare by $700 billion.
The Machine (Lying One)
written by James, August 15, 2012 1:55

It has been pretty consistent in that the GOP Machine will turn your opponent's apparent strength into a cold-callous assault vs. humanity.

Your opponent in this case, the Dem would struggle trying to explain the technicality. Henceforth, more than 60% of the white men who are not college-educated support Bishop Romney as many of them listen to the hyperbole, lie or whatever.

Then you have the Dem would use terms like misrepresenation, not true, inaccurate, etc., such pleasantry.
But: balance!
written by f.fursty, August 15, 2012 2:01
And free market!
written by jerry, August 15, 2012 4:06
It would perhaps be worthwhile to summarize what these mechanisms are and whether there are other reasons for the higher shortfall back in 2009, such as lower tax revenue from the recession? What an absolute monstrosity of a bill the ACA was, nearly impossible to make any sense of these endless projections and estimates. In any case, whatever you cut from Medicare is going to be made up in the private market, so I'd expect the costs to the average taxpayer will be similar, whether we classify it as FICA or just other healthcare costs.
our broken health care system
written by Ethan, August 15, 2012 4:40
Dr. Baker:
There is an interesting article in the current New Yorker magazine (Aug 13/20) "BIG MED" under Annals of Health Care. It reports on attempts to standardize procedures (to improve efficiency), and for physicians to learn to train others (best practices and all that). Check it out.
Patents and healthcare
written by David, August 15, 2012 5:27
If you've not yet read this book by Harriet Washington, then do. It's well written, carefully researched, fascinating, and makes the case for dismantling the patent system.

written by FoonTheElder, August 20, 2012 12:18
The Republican solution for health care is Republicancare. The same system that has miserably failed for decades.

It's the system that leaves 25% uninsured or underinsured and kills anywhere from 25,000 to 40,000 every year.

It's the system that wastes $1 trillion per year ($3200 per every american x $3200) compared to every other developed country.

It's the system that is controlled by big corporate medical price gougers who pay for the campaigns of the phony fiscal conservatives who won't be happy until the make the US health system even more of a total failure.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.