The Truth-O-Meter Says:
Romney

Says Barack Obama "is the only president to ever cut $500 billion from Medicare."

Mitt Romney on Wednesday, April 4th, 2012 in a speech to the Newspaper Association of America

Romney: Obama 'only president' to cut Medicare

As Mitt Romney begins to pivot from the long Republican primary fight to a likely November duel with President Barack Obama, he is re-launching some of his most repeated -- and inaccurate -- attacks of the incumbent president.

During an April 4, 2012, speech to the Newspaper Association of America -- a group Obama addressed the day prior -- Romney repeated several variants of claims that have gotten him in trouble with the Truth-O-Meter.

We’re not focusing on those falsehoods in this item. Rather we’ll explore a variation of something else Romney has said on the campaign trail and repeated in his speech to the newspaper editors’ group.

Romney said that Obama is "the only president to ever cut $500 billion from Medicare."

This, in many ways, is a mash-up of two claims Romney has made before.

Any PolitiFact regular has heard the $500 billion Medicare line before. We’ve fact-checked claims about the basic point several times from several officials. We’ve rated claims anywhere from Half True to False depending on how the attack was specifically worded.

We checked Romney on a similar $500 billion claim from 2011. That reporting remains germane today.

The reference point is the federal health care law, which makes several changes to Medicare.

In a few cases, the law increased Medicare spending to provide more benefits and coverage, according to the Kaiser Family Foundation, a trusted independent source that analyzes the health care system. For instance, the health care law added money to cover preventive services and to fill a gap for enrollees who purchase prescription drugs through the Medicare Part D program. (That coverage gap is sometimes called the doughnut hole).

Other provisions are designed to reduce future growth in Medicare spending, to encourage the program to operate more efficiently and to improve the delivery and quality of care in ways including reducing hospital re-admissions. The law does not take money out of the current Medicare budget but, rather, 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 as we said then, and repeated several times since, the health care law reduces the amount of future spending growth in Medicare. But it doesn't cut Medicare.

The rest of Romney’s statement implies that Obama is doing something no other president has done -- making cuts (which he isn’t).

He made the same point in a December 2011 debate. We rated that particular claim False.

John Rother, president and CEO of the National Coalition on Health Care, a coalition of trade associations, labor unions and advocacy groups that supports health care reform, offered some historical perspective for us for that fact-check.
   
In 1981, President Ronald Reagan in his first year in office signed an omnibus budget reconciliation act that raised Medicare deductibles for beneficiaries. Rother said he considers that a cut in benefits.
   
Two years later, Reagan and Congress enacted legislation that changed the way Medicare reimbursed hospitals. The program’s costs had been growing exponentially as hospitals treated patients and then sent the federal government the bills. It was known as "retrospective cost-based reimbursement." The new law established a "prospective payment system," which categorized inpatient admission cases into what were called diagnosis-related groups (DRGs). In this system, Medicare pays hospitals a flat rate for each inpatient case.
   
"The system was intended to motivate hospitals to change the way they deliver services. With DRGs, it did not matter what hospitals charged anymore -- Medicare capped their payments," according to a 2001 report by the Department of Health and Human Services Office of the Inspector General.
   
The resulting savings to Medicare was $21 billion in the first three years, exceeding even Congressional Budget Office projections. It cut the program, Rother said, but did not affect benefits.
   
In 1987, Reagan signed a law that expanded Medicare benefits, including drug and catastrophic illness coverage. But when George H.W. Bush took office, he repealed it. So Rother puts Bush in the column of presidents who cut Medicare for seniors.
   
The Medicare program saw another major overhaul in 1997. President Bill Clinton signed the Balanced Budget Act, which tightened payments to doctors, nursing homes, home health agencies and health insurance plans and expanded the types of private plans that could participate in Medicare (the part of the program now known as Medicare Advantage).
   
Its goal was to trim $393.8 billion in spending over 10 years. But it’s a trickier question to answer whether that law cut benefits.
   
"With Clinton, it’s an indirect effect," Rother said. "It did cut reimbursements to several providers who claimed they would not be able to serve the beneficiary population."
   
The tally, then:

  • Reagan cut Medicare by reducing payments to hospitals, and he cut benefits by raising deductibles.
  • George H.W. Bush cut benefits by repealing a law that would have expanded coverage for drugs and catastrophic illness.
  • Clinton cut Medicare by changing payments to doctors and other providers, which could be considered to have an indirect effect on beneficiaries.
  • Obama cut future Medicare spending but expanded benefits.

Our ruling

Romney said Obama "is the only president to ever cut $500 billion from Medicare." It wasn’t a cut, rather a reduction in future growth (the size of the Medicare program will increase dollar-wise). And other presidents have cut Medicare in the past, though you can debate whether specific changes to the program constitute a "cut" in some of those cases as well.

That’s a historical footnote, however, that doesn’t affect our ruling. We rate Romney’s statement False.

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Published: Wednesday, April 4th, 2012 at 4:54 p.m.

Subjects: Candidate Biography, Health Care, Medicare

Sources:

Mitt Romney, speech to the Newspaper Association of America, April 4, 2012

PolitiFact, "Mitt Romney says president promised peak of 8 percent unemployment," Feb. 8, 2012

PolitiFact, "Mitt Romney repeats claim that repealing health law saves $95 billion a year," Jan. 8, 2012

PolitiFact, "Mitt Romney says Barack Obama "traveled around the globe to apologize for America," June 3, 2011

Congressional Budget Office, Selected CBO Publications Related to Health Care Legislation, 2009–2010, December 2010

PolitiFact, "Medicare 'cuts' in the health care law will hurt seniors, says 60 Plus Association," Sept. 20, 2010

The Kaiser Family Foundation, Health Reform and Medicare: Overview of Key Provisions, July 2010

PolitiFact, "Medicare 'cuts' in the health care law will hurt seniors, says 60 Plus Association," Sept. 20, 2010

The Kaiser Family Foundation, Health Reform and Medicare: Overview of Key Provisions, July 2010

"Medicare Hospital Prospective Payment System -- How DRG Rates Are Calculated and Updated," Department of Health and Human Services Office of Inspector General, August 2001

"Does the Congressional Budget Office Underestimate Savings from Reform? A Review of the Historical Record," The Commonwealth Fund, January 2010

Balanced Budget Act of 1997

Interview with Jonathan Oberlander, professor at UNC-Chapel Hill, Dec. 11, 2011

Interview with John Rother, National Coalition on Health Care, Dec. 12, 2011

"An Examination of Key Medicare Provisions in the Balanced Budget Act of 1997," The Commonwealth Fund, Sept. 9, 1997

"Another look at a favorite Republican talking point," PolitiFact.com, Nov. 14, 2011

"History Shows Medicare Can Be Cut While Sparing Beneficiaries," NPR, July 22, 2011

"Romney wrong on Medicare cuts," Factcheck.org, Dec. 10, 2011

"Romney Claims Obama Was The ‘Only President’ To Cut Medicare, Ignoring Reagan’s Reductions To The Program," Think Progress, Sept. 6, 2011

Written by: Aaron Sharockman
Researched by: Angie Drobnic Holan, Molly Moorhead, Aaron Sharockman
Edited by: Amy Hollyfield

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