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Medicare’s finances face a troubled future and according to U.S. Rep. Jon Runyan, the national health care law is hastening the program’s decline.
Runyan, who is running for another term against Democrat Shelley Adler on Nov. 6, sounded his warning in an interview posted online on Sept. 17 with Townsquare Media New Jersey.
Runyan (R-3rd Dist.) said, "for those of you that are still in the workforce and have the ability to manage for retirement, we have to have a serious discussion on how to preserve Medicare for the long haul because if we do nothing and continue to let Obamacare siphon off that $700 billion dollars off the top of it, Medicare goes away in less than 10 years -- certain accounts of it -- and it just falls apart at the seams."
Is the Patient Protection and Affordable Care Act -- what some call Obamacare -- taking money from Medicare and endangering parts of the program, as Runyan suggests?
There are several problems with that claim.
The law reduces future growth in Medicare costs by $716 billion over 10 years, according to the nonpartisan Congressional Budget Office. But that money isn’t cut from Medicare’s current budget and spending will continue to increase.
It’s worth noting that Runyan voted for a Republican budget that also included those spending reductions.
But the larger issue is Runyan’s suggestion that those reductions harm Medicare. The opposite is true.
Jonathan Oberlander, a professor of social medicine and health policy at the University of North Carolina-Chapel Hill, called Runyan’s statement "absolute nonsense."
First, Medicare isn’t going away, Oberlander said. "Second, Obamacare improves Medicare’s benefits and its financial condition."
Two trust funds pay for Medicare. One of the funds is in good financial shape. When Runyan said certain Medicare accounts would go away, he’s referring to the fund for Medicare Part A, which pays for hospital care.
That fund is in trouble; an April Medicare Trustees report said it will run out of assets and be unable to meet all of its obligations by 2024.
Even then, if nothing is done, the Medicare Trustees project the fund will take in enough revenue to meet 87 percent of its obligations in 2024. But the trustees note that "in practice, Congress has never allowed a Medicare trust fund to exhaust its assets."
Runyan’s campaign spokesman, Chris Russell, said that once the fund "can no longer cover the costs of the benefits it’s supposed to provide, then something needs to give. If it's allowed to get to that point, you will either need to slash benefits or raise taxes to keep it fully intact. That's [Runyan’s] point."
Still, the fund will not disappear in less than 10 years. But more importantly, without the Affordable Care Act that fund would be in even worse condition.
The Congressional Budget Office estimated repealing the health care law would boost spending in Medicare Part A by $517 billion, in part by restoring future increases in payments to hospitals.
If the law is repealed, the fund would be unable to meet all of its obligations in 2016, eight years earlier than if the law stays in place. That’s because spending would increase and new revenues dedicated to the fund would be eliminated, according to the nonpartisan Kaiser Family Foundation.
Runyan said, "if we do nothing and continue to let Obamacare siphon off that $700 billion dollars off the top of it, Medicare goes away in less than 10 years -- certain accounts of it -- and it just falls apart at the seams."
This statement is misleading on several fronts.
The health care law decreases growth in future Medicare spending by $716 billion over 10 years. It does not cut that amount from the current Medicare budget.
Analysts project one of the trust funds that pay for Medicare services will be unable to meet all of its obligations in 2024, but the fund would still cover some benefits.
Without the Affordable Care Act, the fund would be exhausted in 2016.
For those reasons, we rate this statement False.
To comment on this ruling, go to NJ.com.
Townsquare Media New Jersey, Interview with U.S. Rep. Jon Runyan, Sept. 17, 2012
E-mail interview with Chris Russell, campaign spokesman for Congressman Jon Runyan, Sept. 18, 2012
E-mail and phone interview with John Hoadley, research professor at Georgetown University’s Health Policy Institute, Sept. 18, 2012
E-mail interview with Jonathan Oberlander, professor of social medicine and health policy and management at the University of North Carolina-Chapel Hill, Sept. 19, 2012
PolitiFact New Jersey, Rep. Jon Runyan claims Medicare "will be gone in eight years, if we do nothing to it", May 20, 2012
Congressional Budget Office, Direct Spending and Revenue Effects of H.R. 6079, the Repeal of Obamacare Act, July 24, 2012
PolitiFact, Is Barack Obama right on 'guaranteed benefits' under Medicare?, Sept. 17, 2012
FactCheck.org, Medicare’s ‘Piggy Bank’, Aug. 24, 2012
FactCheck.org, A Campaign Full of Mediscare, Aug. 22, 2012
Centers for Medicare & Medicaid Services, Medicare Stable, But Requires Strengthening, April 23, 2012
PolitiFact Ohio, Pat Boone claims Medicare will be bankrupt in nine years, March 29, 2012
Congressional Budget Office, March 2012 Medicare Baseline, accessed Sept. 17, 2012
PolitiFact, Ryan's plan includes $700 billion in Medicare "cuts," says Stephanie Cutter, Aug. 15, 2012
PolitiFact New Jersey, Jon Runyan claims Affordable Care Act cuts Medicare program by $500 billion, June 29, 2012
Jon Runyan for Congress, The Truth About Medicare, accessed Sept. 18, 2012
New York Times, Patients Would Pay More if Romney Restores Medicare Savings, Analysts Say, Aug. 21, 2012
Kaiser Family Foundation, Repealing the Affordable Care Act: Implications for Medicare Spending and Beneficiaries, Sept. 10, 2012
Congressional Research Service, Medicare: History of Part A Trust Fund Insolvency Projections, May 27, 2009
Congressional Budget Office, CBO's Analysis of the Major Health Care Legislation Enacted in March 2010, accessed Sept. 18, 2012
Kaiser Health News, FAQ: Decoding The $716 Billion In Medicare Reductions, Aug. 17, 2012
FactCheck.org, Ryan’s VP Spin, Aug. 30, 2012
PolitiFact, Paul Ryan said President Obama "funneled" $716 billion out of Medicare "at the expense of the elderly," Aug. 29, 2012
House Budget Committee, Fiscal Year 2013 Budget, accessed Sept. 12, 2012
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