Over the past two years, one of the main talking points that conservatives and others who disagree with President Obama's health care reform legislation have charged is that the bill took $500 billion out of Medicare to pay for the startup of the program.
Democrats have occasionally objected in debates, but never too convincingly, leaving the charge hanging out there. But fact-checking groups have called the allegation spurious.
Now because he is subject to an attack on this very subject in new television ads being paid for by the Florida Chamber of Commerce, Florida Democratic incumbent Bill Nelson is objecting, with his attorney sending a letter to every Florida TV station to kill their run of the ad.
On behalf of our client, we respectfully insist that you take this inaccurate ad off the air immediately. As a media outlet, this station has a duty to protect the public from the spread of false information and deliberate deception.
PolitiFact's Angie Holan wrote last fall that:
The bill doesn't take money out of the current Medicare budget but, rather, it attempts to slow the program's future growth, curtailing just over $500 billion in anticipated spending increases over the next 10 years. Medicare spending will still increase, however. The nonpartisan Congressional Budget Office projects Medicare spending will reach $929 billion in 2020, up from $499 billion in actual spending in 2009.
So while the health care law reduces the amount of future spending growth in Medicare, the law doesn't cut current funding for Medicare.
Still, where does the $500 billion in future savings come from?
Nearly $220 billion comes from reducing annual increases in payments that health care providers would otherwise receive from Medicare. Other savings include $36 billion from increases in premiums for higher-income beneficiaries and $12 billion from administrative changes. A new national board — the Independent Payment Advisory Board — will be tasked to identify $15.5 billion in savings, but the board is prohibited from proposing anything that would ration care or reduce or modify benefits. Then there's another $136 billion in projected savings that would come from changes to the Medicare Advantage program, an alternative to traditional Medicare that has turned out to be much more costly than expected. About 25 percent of Medicare beneficiaries are enrolled in a Medicare Advantage plan.
If you disregard the incendiary word "stole," it is true that savings from Medicare help pay for other parts of the health care law. That's because Democrats wanted to make sure they did not increase the federal deficit with the new health law. The savings from Medicare offset new spending resulting from the health care bill.
Mostly, the new spending in the health care law comes from tax credits to help people of modest incomes buy health insurance and from expanding Medicaid to offer coverage to the poor. The tax credits and other cost-sharing subsidies are estimated to cost $350 billion over 10 years, while the Medicaid expansion costs $434 billion, according to the nonpartisan Congressional Budget Office.
Those two initiatives add up to more than $500 billion. So in addition to reducing future Medicare spending, the law also increases Medicare taxes on the wealthy and creates new fees for the health care industry, as well as a few other things, to come up with the needed sums.
The Times reports that Nelson's lawyers have contacted 48 stations and 10 cable operations throughout the Sunshine State.