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(Published Oct. 20, 2008)
Though both presidential candidates have spoken at length about how they would change the American health system, they’ve carefully avoided offering many specifics about Medicare, the government’s huge health insurance program for the elderly and disabled.
For good reason: Medicare is financially unprepared for the surge of retiring baby boomers, meaning future administrations and Congresses will have to consider making tough tradoffs, like cutting benefits or raising taxes. That’s hardly the kind of stuff a politician would willingly highlight in stump speeches or on a campaign Web site.
It is the sort of thing you just might accuse your opponent of favoring. And Barack Obama in recent days has tried to do just that, portraying John McCain’s health plan as filled with looming spending cuts for Medicare’s nearly 45-million beneficiaries.
"It turns out, Senator McCain would pay for part of his plan by making drastic cuts in Medicare — $882-billion worth. $882-billion in Medicare cuts to pay for an ill-conceived health care plan, even as Medicare already faces a looming shortfall," Obama said in an Oct. 17, 2008, speech in Roanoke, Va. He repeated the charge the next day, in St. Louis, declaring that under McCain’s plan, “you would have fewer places to get care, and less freedom to choose your doctors. You’ll pay more for your drugs, receive fewer services, and get lower quality care.”
The Obama campaign also has turned the charge into a TV ad. Obama might be hitting hard on a sensitive topic, but in the process, he’s offering more specifics about McCain’s plan than McCain has.
The $882-billion in cuts Obama cites comes from an analysis of McCain’s plan by the Center for American Progress Fund, a left-leaning think tank headed by John D. Podesta, the former chief of staff to President Clinton. The analysis, in turn, is based on an estimate by the independent Tax Policy Center that finds McCain’s overall health plan would cost the government $1.3-trillion over 10 years — a figure the McCain campaign doesn’t dispute.
Because McCain’s campaign says the health plan would be “budget neutral” — meaning it would be paid for by savings from Medicare and Medicaid — the Center for American Progress automatically assumes the savings would come from cuts to the big health programs. The center performed a series of calculations to determine how much McCain would have to reduce both programs’ projected spending growth, and concluded McCain would have to pare the program by roughly 13 percent over a decade, or $882-billion.
All fine, except that McCain has never talked about Medicare benefit and service cuts to pay for his health care plan. Instead, his campaign says it would achieve the necessary cost savings by overhauling Medicare reimbursement policies, streamlining treatments for certain chronic diseases, cracking down on fraud and waste, expanding the use of lower-cost generic drugs and assorted other steps. McCain’s senior policy adviser Douglas Holtz-Eakin has talked about further policy changes, including extending tax credits so some low-income Americans wouldn’t have to enroll in Medicaid, the federal-state health program for the poor. But he has stressed that the cost of these changes could be covered without cutting benefits or services.
McCain’s campaign responded to Obama's Roanoke remarks, saying the Democratic front-runner was committing “Medicare malpractice” and spreading lies by perpetuating the Center for American Progress Fund analysis.
It’s unclear whether McCain could extract sufficient savings using the methods he’s outlined to achieve his "budget neutral" goal. Still, the Center for American Progress Fund analysis flatly assumes McCain will cut Medicare benefits and services when McCain has not even broached the idea in speeches or statements. Obama is overstepping by repeating the analysis’ conclusion and portraying the dollar amount of the cuts as part and parcel of McCain’s plan. We rule his claim False.
Transcript of Obama Oct. 17, 2008 speech in Roanoke, VA
Transcript of Obama Oct. 18, 2008 speech in St. Louis, MO
McCain presidential campaign, “Straight Talk on Health System Reform”
Wall Street Journal, “McCain Plans Federal Health Cuts,” by Laura Meckler, Oct. 6, 2008
Center for American Progress Fund, “McCain’s Latest Health Care Strategy,” Oct. 7, 2008
Tax Policy Center, “Refundable Health Insurance Tax Credits,” Sept. 24, 2008
Henry J. Kaiser Family Foundation, “Medicare Now and In The Future”
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