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About That $716 Billion From Medicare….

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2012 Romney-Ryan Republican Candidates

Everyone, not just today’s seniors, need to understand that Obama, through the Affordable Care Act, did not rob Medicare of $716 billion.

First of all, most of that money came from ending a very lucrative subsidy to Medicare Advantage insurance companies.

Here is what happened.

When Medicare Advantage was set up, insurance companies were lured into the program with a guaranteed no-loss, tax-free subsidy. What that meant was that if an insurance provider lost money, the government would pick up the loss and that tax-payer money was given to them tax-free to cover that loss. In other words, these insurance companies could reduce their tax bill by writing off the loss and receive a tax-free handout to cover that loss. A no-loss situation for health insurance companies…and it made them lots and lots of money. It was a pretty good deal: Medicare Advantage insurance companies got to write off any loss and have the government pay for the loss tax-free too.

Think of it this way. Say you make an investment, but it loses money. Naturally, you write off the loss on your taxes which reduces your Adjusted Gross Income and, thus, your tax bill. But then on top of having your tax bill reduced, the government turns around and hands you free of charge whatever amount your investment lost.

Well, that’s exactly the deal Congress made with health insurance companies. It was an absolutely great deal for health care insurance companies but not so much for taxpayers.

I don’t know about anyone else, but I find that deal a waste of taxpayer funds that should have ended. Obama and the Democrats were absolutely correct in ending it. Anyone who supports putting that free subsidy back in place is no fiscal conservative.

Yet, that’s what Romney is now saying should occur. Wrong, wrong, wrong.

Every taxpayer should be incensed by that guaranteed give-away of taxpayer dollars. If taxpayers were incensed by the possibility of helping underwater homeowners – as the original Tea Party was – they should be even more incensed over the deal the Republican held Congress made with insurance companies on Medicare Advantage.

No longer paying for waste, fraud and abuse

The rest of the money comes from tightening up on Medicare fraud enforcement as well as changing how hospitals are paid.

Prior to ACA, hospitals were paid for every readmission, regardless of how poorly those hospitals did their job. ACA now requires hospitals to do a better job of caring for their patients by stopping payments for re-admissions that should not have occurred. Since the Hospital Association agreed with this action, why do so many Republicans now want to continue to pay for poor care and waste? That’s not fiscally conservative, in my view.

At the same time, ACA strengthened the benefit side of Medicare by closing the costly doughnut hole and providing for annual check-ups. Essentially seniors, and all Americans, got a better deal for $716 billion less. That’s fiscally conservative!

So what are Romney and Ryan really saying?

That they want to return to the waste, fraud and abuse in the Medicare system prior to ACA?

Of course not. They don’t believe what they’re currently saying. It’s all campaign spin and garbage. They’d take that same money out of the system but use it differently…to help lower tax rates for the most wealthy. Furthermore, by overturning ACA, they would return the wasteful subsidies to insurance companies as well as end the provision that makes hospitals more accountable for outcomes. Ryan’s plan, which Romney said he would sign into law, makes that absolutely clear.

The next time you hear a Republican, or Romney and Ryan, expound on that $716 Billion, remember you’re being conned.

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Written by Valerie Curl

August 23, 2012 at 9:17 AM

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