Medicare is the fastest-growing federal program, and every day, another 10,000 baby boomers become eligible to receive benefits. When combined with the effects of an aging population and rising healthcare costs, the 1960s-era program becomes unsustainable.

Unfortunately, many on the left are distorting conservative efforts to reform the program. From Cristina Saralegui at the Democrat National Convention to Vice President Joe Biden in Wisconsin and President Barack Obama in Florida, the blatant distortions of conservative Medicare reform just keep coming.

Americans deserve an honest conversation on Medicare.


Top Medicare Reform Myths
& the facts

Myth: Medicare will become “vouchercare”
Fact: “There is no major Medicare reform proposal, including the Ryan proposal, that would issue future senior citizens a voucher (a certificate or coupon or a check for a fixed dollar amount)…” – Robert Moffit, Ph.D., former deputy assistant secretary at the Department of Health and Human Services

Myth: Seniors will be at the mercy of insurance companies
Fact: “The premium support concept advanced by Ryan relies on informed consumer choice of competing health plans, including traditional Medicare. Seniors would receive a fixed subsidy, higher for those with low incomes and greater needs. To attract enrollees, health plans and providers would seek ways to increase efficiency, lower cost, and reduce premiums while improving quality and customer service.” – Joseph Antos, Ph.D., former assistant director at the Congressional Budget Office

Myth: Obamacare’s $716 billion cut strengthens Medicare
Fact: “There is only one way to simultaneously spend trillions on new insurance subsidies, Medicaid expansions and other outlays and still make good on the future Medicare commitments: Cut an additional $716 billion elsewhere, or raise an additional $716 billion in taxes. The ACA does neither.” – Douglas Holtz-Eakin, Ph.D., former director of the Congressional Budget Office

Myth: Competition won’t control costs
Fact: “But the evidence shows otherwise. The Medicare drug benefit, which truly is a premium-support plan, continues to work incredibly well. The average beneficiary premium in 2013 will be just $30, the same as it was in 2012 and 2011, and just $7 more than it was in 2006. Overall, spending on the program is coming in more than 40 percent below initial projections. Competition and transparency in pricing are putting downward pressure on premiums and the costs of individual prescriptions. Seniors like the program, and competition remains vigorous.” – James Capretta, former associate director at the Office of Management and Budget

Myth: Reform will end Medicare’s guaranteed benefits
Fact: “…all major versions of premium support guarantee beneficiaries at least the Medicare benefits or the level of benefits they get today with access to new plans with even higher levels of coverage at competitive prices tomorrow.” – Robert Moffit, Ph.D., former deputy assistant secretary at the Department of Health and Human Services

Myth: Premiums will increase by $6,400”
Fact: “The House budget resolution authored by Ryan in 2012 contains a Medicare premium-support proposal that is significantly different from the 2011 budget proposal. … Any claim, in the media or elsewhere, that uses the CBO evaluation of the 2011 Ryan plan is fundamentally flawed and erroneous.” –Rea S. Hederman, Jr., Assistant Director, Center for Data Analysis and Research Fellow, The Heritage Foundation

Myth: Medicare is more efficient than private insurance
Fact: “On a per-person basis, however, Medicare’s administrative costs are higher than those of private insurance…Medicare administrative expenses appear lower as a percentage of total costs only because enrollees need, on average, more health care services than those privately insured.” – Robert A. Book, Ph.D., Senior Research Fellow in Health Economics, The Heritage Foundation

Share this page

Top Charts

Chart: Medicare Increases Federal Deficit

12 second myths

 

Must Read Articles

Medicare’s ‘Efficiency’ (Robert Moffit & Alyene Senger, National Review)
“Medicare spends a lot of money on benefits, and these expenditures make its administrative costs look small in comparison. When administrative costs are viewed on a per-beneficiary basis, as in [health-care economist Robert] Book’s evaluation, and not as a percentage of total costs, Medicare’s administrative costs are seen to be slightly higher than those of private insurance, even though in private insurance these costs include money spent on non-administrative functions such as marketing.”

Kaiser’s Faux ‘Study’ of Premium Support (James Capretta, National Review)
“There are three problems with the study. First, it doesn’t analyze anything close to the Ryan-Wyden plan. Second, its methodology is biased against the benefits of competition and consumer choice. And, third, if there were any conclusion to be drawn from the data used to produce the study, it’s that Representative Ryan has been right all along in saying that private plans have the capacity to dramatically reduce costs for Medicare – without shifting costs onto any seniors.”

The problem with Kaiser’s premium support study? Seniors are smarter than that—and so are health plans
(Joseph Antos, American Enterprise Institute)
“The Kaiser study does not show what sensible seniors could save if they simply follow their supermarket instincts and select the best deal. The study shows how much seniors would lose if they keep their old plan in the face of much better options. ”

Obama’s Medicare: Leaving Seniors at the Mercy of Insurance Companies (Dan Holler, Heritage Action)
“…if President Obama truly believes premium support will leave seniors at the mercy of insurance companies, he must face the facts that tens of millions of current seniors are already at their mercy…and his plan did nothing to change that.”

Obama’s Medicare Cuts Will Affect Benefits (Bob Moffit Ph.D., National Review)
“Medicare Advantage provides a variety of benefits that traditional Medicare does not cover, including protection from catastrophic illness. The Medicare actuary analyzed the payment cuts to Medicare Advantage in 2010 and projected that patient enrollment in the program would be cut in half by 2017. … Heritage research shows that, by 2017, the value of an enrollee’s Medicare Advantage benefits will decline by an average of $3,714.”

Manhattan Moment: Obama and Biden will turn Medicare into Medicaid (Paul Howard, Washington Examiner)
“The federal government doesn’t “bargain” through Medicaid. Rather, it sets prices and expects drug-makers to follow. Extending those price controls to Medicare would diminish U.S. based innovation and kill jobs. … [And] imposing Medicaid price controls on Medicare would harm the most vulnerable and sickest seniors today and in the future. ”

Biden Invented His Own Facts (Avik Roy, Forbes)
“Biden repeated the Obama campaign’s dishonest talking points regarding Obamacare’s $716 billion in cuts to Medicare. “What we did,” he claimed, “is we saved $716 billion and put it back—applied it to Medicare.” That’s not true: the $716 billion was used to fund $1.9 trillion in new spending under Obamacare. ”

The Ratio of Obamacare’s Medicare Cuts to New ‘Benefits’ is Fifteen-to-One (Avik Roy, Forbes)
“But according to the Congressional Budget Office, for every $500 the law spends on preventive services and prescription drugs, it cuts the rest of Medicare by $7,385. That’s a cut-to-spending ratio of nearly 15 to 1.”

Is Government-Run Health Care Really More Affordable? (Jeffrey Anderson, The Weekly Standard)
“Last year, the Government Accountability Office (GAO) estimated that Medicare loses a staggering $48 billion a year simply because of fraudulent or improper payments. In comparison, the profits of the nation’s ten largest health insurance companies last year were a combined $13.7 billion. In other words, Medicare loses three-and-a-half times what the ten largest private health insurers make.”

Seniors Can Save on Premiums and Prescription Drugs in 2013 (Katherine Rosario, Heritage Action)
“The example of United Healthcare and the new low premium plan they are offering, demonstrates that when competition is not restricted, and companies have to vie for consumers’ purchases, prescription drug prices are kept lower. The simple fact is that the evidence lines up in favor of conservative Medicare reform and in favor of premium support, not government dictated price controls.”

Medicare Coupons, Strokes, and Heart Attacks (Bob Moffit Ph.D., National Review)
“The Medicare misinformation machine is spinning overtime. As President Ronald Reagan once said, ‘Well, the trouble with our liberal friends is not that they are ignorant, but that they know so much that isn’t so.’”

Boos Subside as Ryan Explains the Truth (Grace-Marie Turner, National Review)
“Surprisingly, the president dropped his earlier criticism that their “voucher” plan would raise health-care costs for seniors by $6,400 a year, an acknowledgement that the charge has been widely discredited and is irrelevant to the Romney/Ryan proposal, as it was a criticism of Ryan’s plan.”

Obama’s Robbery of Medicare to Fund Obamacare, in One Chart (Deroy Murdock, National Review)
“It very clearly shows the $716 billion that Democrats swiped and delineates exactly from where in Medicare they stole it. This is as close to a police report of a home burglary as one will find in public policy, a graph is based on irrefutable data from the Congressional Budget Office.”

Fixing Health Care Calls for Evolution, Not Intelligent Design (Stuart Butler, Ph.D., The American Interest)
Defined-contribution proposals are frequently portrayed—and attacked—as being primarily budget-control mechanisms. They certainly are that. But they are also mechanisms to stimulate an evolutionary process of innovation.

How Obamacare’s $716 Billion in Cuts Will Drive Doctors Out of Medicare (Avik Roy, Forbes)
“The President’s plan doesn’t cut [benefits] by one dime,” insists deputy campaign manager Stephanie Cutter. … But Cutter’s assertion the law doesn’t cut benefits only makes sense if you don’t count getting a doctor’s appointment as a “benefit.”

Bending the Cost Curve through Market-Based Incentives  (Joe Antos, Ph.D., et al, New England Journal of Medicine)
The adoption of a defined-benefit approach to federal health subsidies can improve the understanding of both consumers and providers that resources are limited and choices must be made, but those decisions should not be dictated from Washington through regulatory controls.

Top Obama Advisers Proposed Voucherizing Medicare Way Back in…2010? (Avik Roy, Forbes)
“… we learned that a top Obama health-care adviser [David Cutler] actually proposed going around Congress to voucherize Medicare, in his words, just two years ago.”

Bill Clinton on health care: Double Count of Medicare (Doug Holtz-Eakin Ph.D., Politico)
“[Bill] Clinton is wrong on his facts here. The ACA does cut $716 billion out of Medicare over the next 10 years, but it spends those funds elsewhere and does nothing to extend the life of Medicare.”

Debunking Clinton’s Medicare Claims (Robert Moffit, Ph.D., National Review)
“Very Clintonesque: technically correct, and thoroughly misleading. In fact, President Obama and his allies in Congress cut the funding for Medicare benefits, which directly affects Medicare patients dependent on the funding of those benefits.”

Regional Impact of the $716 Billion Medicare Cut (PDF) (Robert Book and Michael Ramlet, Medical Industry Leadership Institute)
“Totaling an estimated $716 billion between 2013 and 2022, the Medicare payment reductions comprise a majority of the Affordable Care Act’s budgetary savings. However, the payment reductions are not uniformly distributed across the U.S. geography.”

Medicare Distortions (James Capretta, National Review)
“So which is it? Are private plans less expensive or more expensive than the traditional program? The truth is that, despite claims to the contrary, private plans are able to deliver the Medicare benefit package at much lower costs than the traditional program in many parts of the country. And that shouldn’t be surprising, because the traditional program is incredibly inefficient.”

Premium Support: Medicare’s Future and its Critics (Bob Moffit, The Heritage Foundation)
“No one on traditional Medicare today will be worse off. The reason: All major premium-support proposals continue traditional Medicare as an option and also require private plans to offer a benefits package that is the same as or at least actuarially equivalent to that provided by traditional Medicare.”

Ryan and His Panicky Critics (James Capretta, National Review)
“Among the cuts in Obamacare is a deep and permanent reduction in payments to Medicare Advantage plans. According to the Medicare trustees, that cut will force 4 million seniors out of their Medicare Advantage plans.”

No Ducking Medicare Anymore (JD Foster, Ph.D., Washington Times)
“Consider the following question: Should millionaires get subsidized health insurance? If you answered no, then congratulations, you win a cookie. You just solved Medicare’s biggest problem — its finances.”

Ten Myths in the Medicare Ad Wars (John Goodman Ph.D., Forbes)
“We could wipe out Medicare’s $43 trillion unfunded liability entirely if we reduce doctor and hospital fees all the way to zero! The problem is: seniors would not be able to find a doctor who would see them or a hospital that would admit them.”

CAP Action Dowdifies CBO Medicare Report (Rea Hederman, National Review)
“Medicare is a complex policy issue, and clarifying the policy options in a fashion that is understandable to the general public is the right thing to do. It is unfortunate that Dr. Cutler and his co-authors chose to misrepresent the CBO conclusions.”

Medicare drama more hype than reality (John Goodman Ph.D., USA Today)
“But we already have a voucher program under Medicare: Medicare Part C, or the Medicare Advantage program. And one out of four Medicare beneficiaries is enrolled in a Medicare Advantage plan.”

Medicare’s status quo: No, we can’t (Bob Moffit, Ph.D., The Hill)
“Medicare’s outdated and inefficient fee-for-service system is costly, and its price controls merely shift costs rather than control them. To remedy these structural deficiencies, Medicare should harness the forces of competition, and do it through a ‘defined contribution’ system of financing, also known as ‘premium support.'”

The Ratio of Obamacare’s Medicare Cuts to New ‘Benefits’ is Fifteen-to-One (Avik Roy, Forbes)
“But according to the Congressional Budget Office, for every $500 the law spends on preventive services and prescription drugs, it cuts the rest of Medicare by $7,385. That’s a cut-to-spending ratio of nearly 15 to 1.”

The candidates’ positions on Medicare Advantage (James Capretta, The Hill)
“The traditional Medicare fee-for-service insurance is an extremely inefficient model. There is no incentive for either the providers or the enrollees (most of whom have supplemental coverage beyond Medicare) to control the use of services. Thus, the volume and intensity of service use rises dramatically each year.”

Even more: Debunking Nine Common Medicare Reform Myths