WASHINGTON – U.S. Senator Bob Corker, R-Tenn., Ranking Member of the Senate Aging Committee, is highlighting recent reports from the Obama administration’s own Medicare officials as well as the non-partisan Congressional Budget Office (CBO) which conclude that the health care bill passed by the Senate on December 24 (The Patient Protection and Affordable Care Act, PPACA) counts $540 billion in Medicare savings TWICE – once to offset the cost of the bill and again to extend the life of the Medicare Part A trust fund. The reports further determine that Medicare savings will actually be lower under the bill and the life of the Medicare trust fund will not be extended.
“This comes down to elementary school logic: you can’t spend the same dollar twice,” said Corker. “Tennesseans have a lot of common sense and have understood from day one that taking over half a trillion dollars from Medicare to leverage a new entitlement would not make Medicare more solvent, and I’m glad President Obama’s own Medicare officials have now reached the same conclusion.
“In July, before health care legislation was ever constructed, I was joined by 35 of my Republican colleagues in a letter to Majority Leader Reid making clear that we expected any savings found through Medicare reform to be used to secure the program’s financial status and could not support taking Medicare moneys to leverage a new entitlement, and yet it continues to be a fundamental building block of the Democrats’ health care bill. Medicare is expected to be insolvent by 2017, yet somehow my colleagues on the other side of the aisle have moved away from broad, bipartisan concern over Medicare’s $38 trillion in unfunded liabilities to now embracing a proposal that uses Medicare dollars to leverage a new program, rather than putting those funds toward extending the life of Medicare.”
In a January 8 report, Solomon Mussey, Director of the Medicare and Medicaid Cost Estimates Group at the Centers for Medicare and Medicaid Services (CMS), states that the $540 billion dollars taken out of Medicare cannot be simultaneously used to finance other federal outlays (such as the coverage expansions under the bill) AND to extend the Medicare trust fund, despite the appearance of this result from the respective accounting conventions. Mussey goes on to say that the Medicare physician payment cuts the bill assumes – cuts that are essential to the bill’s Medicare savings and budget neutrality – are “unlikely to be sustainable on a permanent annual basis.” In the absence of these draconian and unlikely cuts, Mussey says that Medicare savings will be lower and the life of the Medicare trust fund will not be extended.
A December report from CBO indicates that any savings generated by the legislation would be negated by additional government spending. According to the report, the bill attempts to count Medicare savings twice – once to offset the cost of the bill and again to extend the life of the Medicare Part A trust fund. CBO rejects this accounting gimmick and goes on to say that “unified budget accounting shows that the majority of the [Medicare Part A] trust fund savings would be used to pay for other spending under the PPACA and would not enhance the ability of government to redeem the bonds credited to the trust fund to pay for future Medicare benefits.”