President Obama’s $700 Billion Medicare Problem
There’s a treasure trove of attack ads waiting to be filmed and aired.

President Obama campaigns in Oskaloosa, Iowa, August 14, 2012.


James C. Capretta

The Obama campaign will try mightily over the coming weeks and months to paint the core of the Romney-Ryan approach to Medicare reform as dangerous to seniors’ health. Unfortunately for the Democrats, the facts show otherwise. The Romney-Ryan plan, which is essentially the same “premium support” plan that Democratic senator Ron Wyden advocated in tandem with Ryan, would be gradually phased in. It doesn’t change anything for current beneficiaries or those nearing retirement. For future retirees, it would harness the power of the marketplace to hold down cost growth. This is exactly how the Medicare drug benefit works today, and it has been a tremendous success. In 2013, the average premium will be $30 per month for seniors — the same as in 2012, and just $6 more than in 2006. Overall, costs for the program are now more than 40 percent below original projections.

A recent study in the Journal of the American Medical Association — written, ironically, to undermine the concept of premium support — shows that private plans were able to deliver the Medicare package of benefits for $64 less per month than the government-run option in 2009. This proves the point that Ryan has been making all along, which is that a plan based on competition and choice can save money for the government without harming the quality of care for seniors. And it refutes the argument still being made by many Democrats that somehow the Romney-Ryan plan would drive up costs for seniors by forcing them into private plans that cost more than traditional Medicare. That’s demonstrably not true, as the JAMA study shows.

Of course, it’s just a fact of political life that the media are unlikely to get any of this right. They are reflexively inclined to cast the GOP as the enemy of seniors, no matter what the facts say. But that shouldn’t stop the Romney-Ryan campaign from going on offense. President Obama is vulnerable on Medicare. He is imposing deep and irrational cuts on the program — cuts that will impede access to care for seniors and drive up its costs. And he has raided the program for his big-government ambitions.

The Romney-Ryan campaign can do some real damage with that ammunition between now and November.

— James C. Capretta is a fellow at the Ethics and Public Policy Center.