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Does Obamacare ‘Cut’ $716 Billion From Medicare?

I mentioned before last night’s debate that Mitt Romney’s critique of President Obama’s health-care reforms might focus on the number $716 billion. I was unexpectedly prescient: By my count, based on a transcript, Romney cited the number 10 times, including twice in his closing statement. (“If the president were to be re-elected, you’re going to see a $716 billion cut to Medicare.”) The president never specifically rebutted this claim (then again, he didn’t rebut much of anything in what seemed like a fairly flat performance.) But is the Republican candidate using the statistic accurately?

Romney’s number comes from a Congressional Budget Office report about the impact of the Affordable Care Act on Medicare. During the campaign, the GOP has represented the figure as cuts in benefits to seniors; the president’s camp, and various independent commentators, say the number represents cost reductions stemming from reforms in the way doctors and hospitals are paid. The fact-checkers’ verdict? PolitiFact.com, the Pulitzer-winning organ of the Tampa Bay Times, called it a “half-truth”; other major daily papers, including The New York Times and the Chicago Tribune, judged Romney’s use of the number to be somewhat misleading. (Interestingly enough, as of this writing the Trib’s article about the statistic appeared beneath a relatively large banner ad for the Obama campaign; earlier today, it was under a Romney banner.)

The Washington Examiner offers an interesting counterpoint, arguing that the reduction in money paid to insurers and hospitals “will inevitably result in less coverage and higher premiums for current recipients.” There’s some merit to that argument, though I’m not sure the outcome is inevitable. But that didn’t appear to be the point that Romney was trying to make last night.

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About Encore

  • Encore examines the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities and priorities of today’s retirees. The blog also explores news that affects retirement, from the Wall Street Journal Digital Network and around the web. Lead bloggers are reporter Catey Hill and senior editor Jeremy Olshan. Other contributors include The Wall Street Journal’s retirement columnists Glenn Ruffenach and Anne Tergesen; the Director for the Center for Retirement Research at Boston College, Alicia Munnell; and the Director of Research for Pinnacle Advisory Group, Michael Kitces, CFP.