Presidential debate 101: Is Romney right about $716 billion in Medicare cuts?

Medicare has been a hot topic this campaign cycle, and it came up again during Wednesday’s debate between President Obama and Republican challenger Mitt Romney.

Mr. Romney brought up a point he’s hit hard before – that with the passage of his health-care reform law, the Affordable Care Act, Mr. Obama is responsible for $716 billion in cuts to Medicare.

"If the president were to be reelected you're going to see a $716 billion cut to Medicare," Romney said. "You’ll have 4 million people who will lose Medicare Advantage. You’ll have hospitals and providers that’ll no longer accept Medicare patients. I’ll restore that $716 billion to Medicare."

Decoder has taken on this claim before, but with the dollar number in the spotlight again, let's take a look at how other news outlets are decoding this claim.

After the debate, the Tampa Bay Times’ PolitiFact rated Romney’s claim as “half true.” It explains exactly where the number, $716 billion, comes from: A Congressional Budget Office report determined that between 2013 and 2022, the Affordable Care Act would reduce the amount of federal spending on Medicare by $716 billion.

But PoltiFact clarifies that those spending reductions would come at the expense of insurance companies and hospitals, not Medicare beneficiaries. Obama’s goal, it says, is to slow the growth in the program's expenditures, not cut the current budget.

The Washington Post has a nifty pie chart that shows how the $716 billion in Medicare cuts is divvied up. The Post reports that 34.8 percent of cuts are attributed to hospital reimbursement rates, though it predicts hospitals should be able to make up some of that loss. Some of the cuts will be funds for hospitals to encourage them to see more uninsured patients. Because the Affordable Care Act expands insurance coverage to all Americans, the number of uninsured patients hospitals must treat will be reduced.

The next slice of the chart shows 30.2 percent of the cuts coming from Medicare Advantage payments, which addresses Romney's debate-night claim that 4 million people will lose Medicare Advantage under the Affordable Care Act. This is the often-mentioned scale-back of payments to private insurers. 

The Post and PolitiFact both point out that Medicare Advantage, a program in which the government pays for seniors to have private health insurance, on average costs more than private insurance, rather than keeping costs low. The National Committee to Preserve Social Security and Medicare reports that, on average, the US government pays 14 percent more per beneficiary per year for seniors in the Medicare Advantage program. It says payments to Medicare Advantage will not be eliminated entirely, but reduced gradually to bring them more in line with traditional Medicare.

The last third of the cuts, 35 percent, the Washington Post labels "everything else." 

The Kaiser Family Foundation elaborates. "Other Medicare spending reductions include $39 billion less for skilled nursing services, $66 billion less for home health, and $17 billion less for hospice." The website points to additional benefits the Affordable Care Act will provide, such as an increase in prescription drug coverage.

Perhaps Mother Jones sums it up best with its quick Q&A on the $716 billion in cuts.

Are America's seniors getting the short end of the stick? "No probably not," it says; hospitals and insurance companies are. But does that mean Medicare beneficiares have nothing to worry about? 

"It's possible that the cuts to providers could lead to slight cuts in quality or even, via some unintended backdoor mechanism, to some doctors dropping out of Medicare," Mother Jones writes. "And the cuts to Medicare Advantage might prompt insurance companies to reduce some of the extra benefits they've provided." However, it cautions, all predictions at this point are speculative. 

In the end, Obama really is cutting $716 billion from Medicare, that's true. While the long-term effects of the cuts will benefit seniors by extending the life of Medicare, the effects on a doctor-by-doctor, hospital-by-hospital level are unpredictable.

As Mother Jones puts it, "There's no way to cut a bunch of money out of anything and guarantee that it will have no effect whatsoever."