FACT CHECK: Democrats’ repeat ‘end Medicare’ cry is wrong, again

Introduction

Can the “Lie of the Year” still be used to defeat Republicans?

Democrats hope so, and a super PAC is using an Iowa congressional race to retest the claim that House Republicans voted to “end Medicare.” But we find the Iowa ads to be little improved from last year, when we labeled this claim as among the worst “Whoppers of 2011.”

In fact, Democrats are doubling down this time. When their GOP target fought back with his own ad quoting the “Lie of the Year” finding from Politifact.com (and making his own misleading claim), the House Majority PAC was undeterred. It simply repeated the claim in a second ad, saying, “We know the facts.” Perhaps so. But the PAC is misleading voters.

• The ads quote the Wall Street Journal as reporting that the GOP plan would “essentially end Medicare.” That partial quote dishonestly truncates what the newspaper actually said. The Journal reported that Medicare would essentially end “as a program that directly pays those bills.” But bills would still have been paid, indirectly.
• The ads also say: “Seniors would be forced to pay $6,400 more.” But that’s not true for today’sseniors — including the gray-haired people pictured in the ads. The $6,400 figure is a fair interpretation of what a Congressional Budget Office report projected — for somebody turning age 65 in the year 2022 or later. Under the Republican plan, anyone age 55 or older would not have been affected at all, save for the repeal of a sweetened prescription-drug benefit contained in the new health care law.

Medicare would have been fundamentally changed, but by no means “ended.” Those now under age 55 would have been given, when they reached age 65, a choice of private insurance plans, and federal subsides to help pay for one. That’s much like the system Democrats have enacted to cover many younger workers in their new health care law, and like the Medicare Advantage system that covers about one in four Medicare beneficiaries today.

It would be fair game to debate whether the plan Republicans voted for would have been adequately funded, or whether it would have produced too much hardship for those turning 65 a decade from now. That $6,400 figure is a big one, to be sure. But picturing gray-haired seniors and telling them that the plan would “essentially end Medicare” is still far from the truth, even if Democrats think they can win elections by doing so.

Scaring seniors with bogus claims about their retirement benefits is an old tactic, used again and again and again, by both parties. And it worked for Democrats in May 2011, when they first used this same “essentially end Medicare” claim in a special House election in New York state. Democrats scored an upset victory in that race, in what the New York Times described as one of the state’s most conservative House districts.

We later called the claim one of the “Whoppers of 2011,” and our friends at Politifact.com and the Washington Post agreed. Politifact called it the “Lie of the Year,” and the Post‘s “Fact Checker” columnist Glenn Kessler called it an untruth worthy of four Pinocchios — his worst possible rating — and later one of the “The biggest Pinocchios of 2011.”

Politifact’s “Lie of the Year” rating drew howls from liberal commentators and left-leaning news outlets, including MSNBC’s Rachel Maddow, not to mention Democratic operatives, as though they collectively held a trademark on the name “Medicare.”

So, here we go again. But facts are still facts, and we still find these claims to be deceptive, even if Democrats find them to be politically useful.

The ads from the House Majority PAC are aimed at Republican Rep. Tom Latham of Iowa, who’s running against a fellow incumbent — Democratic Rep. Leonard Boswell — because Iowa lost one House seat in the post-Census reapportionment. The claims that he voted to “essentially end Medicare” and raise seniors’ costs by $6,400 is a reference to Latham’s support for Rep. Paul Ryan’s Medicare plan, which called for seniors to get premium-support subsidies to help them buy private insurance, starting with new Medicare beneficiaries in 2022.

The House Majority PAC was formed in April 2011 and is backed by money from several labor unions, including the American Federation of State, County and Municipal Employees and Service Employees International Union.

The PAC fired first on Feb. 9, with a TV ad (titled ‘Unemployed’) that said “Latham voted to essentially end Medicare, turning Medicare over to private insurance companies.”

Then, Latham responded with a TV ad (titled ‘Boswell’s attack’) on Feb. 16, and similar radio spot, that said: “Independent fact-checkers call the attack against Latham quote, the lie of the year.”

The Latham ad featured an image of the finding by Politifact.com, a website run by the Tampa Bay Times (formerly known as the St. Petersburg Times).

Then, the House Majority PAC doubled down on its claims two days later, releasing another ad (titled ‘Bad idea’) that repeated its earlier assertions, adding: “So, Tom Latham can run all the ads he wants trying to hide his record. But we know the facts.”

Each side offers a misleading view of the other’s actions on Medicare.

‘Essentially end Medicare’?

Let’s start with the House Majority PAC’s claims about Ryan’s Medicare plan.

Ryan released his budget proposal in April 2011, and in it, he proposed a major restructuring of Medicare, beginning in 2022. That year, 65-year-olds would get a “premium-support payment,” or subsidy, with which they would buy their own private insurance on a new Medicare exchange. Latham voted for Ryan’s budget plan, as did all but five Republicans in the House.

The House Majority PAC charges that “Latham voted to essentially end Medicare, turning Medicare over to private insurance companies.” And, it said that “seniors would be forced to spend $6,400 more.” It’s true that the plan would eventually move Medicare into a private-insurance system. Medicare would still exist as a health insurance program for seniors, but it wouldn’t look like the government-paid, fee-for-service program that we have today.

The ad points to the Wall Street Journal as its source for the quote “essentially end Medicare.” But it truncates the Journal‘s words. The full quote says the plan would “essentially end Medicare … as a program that directly pays those bills.”

Wall Street Journal, April 4, 2011: The plan would essentially end Medicare, which now pays most of the health-care bills for 48 million elderly and disabled Americans, as a program that directly pays those bills.

The key word here is “directly.” There would still be a program called Medicare (Democrats don’thave a trademark on that name), and it would still pay bills indirectly, by helping seniors buy private insurance. And Medicare would still be spending hundreds of billions of dollars a year to do so — hardly a disappearing act. It’s fair to debate whether those bills would be adequately covered, and whether this more market-based plan would have the effect of restraining future increases in medical costs, as Republicans predict. But a health insurance program for seniors would not end. In fact, it would look much like the Medicare Advantage system that currently covers one in four Medicare beneficiaries. Medicare pays a fixed amount every month to the private insurance companies chosen by individual beneficiaries from a variety of government-approved plans. It’s “Part C” of Medicare.

Costing seniors $6,400 more?

As for the claim that the plan would cost seniors $6,400 more, that figure can be derived from a Congressional Budget Office report, if you do a little math. But there are several caveats.

CBO analyzed Ryan’s plan and found that seniors would pay more under his “premium-support” model than they would under the current Medicare program. That’s because private plans would cost more and because Ryan said the amount of the subsidy would increase based on inflation — and health care costs have been rising much faster.

CBO, April 5: To summarize, a typical beneficiary would spend more for health care under the proposal than under CBO’s long-term scenarios for several reasons. First, private plans would cost more than traditional Medicare because of the net effect of differences in payment rates for providers, administrative costs, and utilization of health care services, as described above. Second, the government’s contribution would grow more slowly than health care costs, leaving more for beneficiaries to pay.

CBO produced a chart (see Figure 1) showing the share of costs that a typical 65-year-old beneficiary would pay in 2022 under Ryan’s plan, current law and an alternative fiscal scenario, which assumed changes to current law that are expected to happen — such as an assumption that scheduled Medicare cuts to payments to doctors won’t be enacted and that some provisions to restrain growth in the federal health care law won’t last beyond 2020.

That chart shows seniors paying 61 percent of the cost of private insurance under Ryan’s plan in 2022 but only 30 percent of such cost under the alternative fiscal scenario. The math works out to a $6,400 difference, with the Ryan plan costing that much more.

But, CBO notes that such long-term projections are hardly set in stone.

CBO: Because future federal spending on health care under current law is difficult to predict, the magnitude of the changes in budgetary outcomes under the proposal is also highly uncertain, particularly in the longer term.

And there’s another caveat: Ryan said his plan would offer additional support for low-income seniors. He said medical savings accounts for low-income individuals would be created by the government, with the first annual contribution at $7,800. There were not enough details released to determine who exactly would get the subsidies, and how they might increase with age. But even if the CBO’s admittedly uncertain projection turned out to be correct, at least some seniors would get enough in additional subsidies to more than cover the costlier Ryan plan.

Those who didn’t, however, would certainly pay more — how much more is uncertain. “Anybody who’s familiar with health care knows health care … costs increase more than inflation,” John Rother, president and CEO of the National Coalition on Health Care, told us. “That’s health care and it’s all the more reason that we have to do something serious to, as they say, bend the curve. It almost doesn’t matter who bears the cost. … It’s not affordable, period.”

Republicans don’t dispute the $6,400 figure, except to say it unfairly assumes that the current Medicare system could still afford to pay the rising costs expected in 2022. CBO also notes that changes could come to Medicare as it currently operates because of those escalating health care costs: “Rising tax rates or surging federal debt might accentuate concerns about the budgetary situation and thereby lead policymakers to reduce benefits under Medicare, Medicaid, or other programs,” the CBO said. Meanwhile, Ryan himself has now signed on to a new plan to revamp Medicare with Democratic Sen. Ron Wyden. It would offer seniors a choice between traditional Medicare and a premium-support model. And this time, the premium support would grow at a faster rate. It would be tied to the lesser of the second-least expensive private insurance premium or Medicare. Wyden and Ryan don’t plan to push legislation on the plan until after the 2012 election.

Alice Rivlin, a senior fellow with the Brookings Institution and the founding director of the CBO, told us that plan’s cap on the increase in the federal subsidy was more generous than Ryan’s old proposal. She has her doubts about the CBO’s projections because “it’s far in the future” and “fairly speculative.” But more important, “even Ryan has backed off his plan. He’s not supporting it anymore. He moved to a plan with Wyden, much more like the one that Pete Dominici and I have proposed … much more moderate plan.”

Of course, we don’t know how Latham might vote on Ryan’s new proposal.

Latham’s misleading Medicare claim

Latham’s response ads say that the House Majority PAC claim is simply a lie. “Independent fact-checkers call the attack against Latham quote, the lie of the year,” it says. Actually, what Politifact.com called its “Lie of the Year” was a statement that “Republicans voted to end Medicare” — without the qualifier “essentially.” But we don’t criticize Latham for taking that small liberty. For one thing, adding the single word “essentially” doesn’t change the meaning of the claim enough to make it very different from the more extreme examples that Politifact was criticizing. The House Majority PAC ad also strives — by use of images of gray-haired seniors — to imply that Medicare would “end” for them, rather than for today’s younger workers when they retire. And besides, as we noted, the Wall Street Journal didn’t report what the ad claims it did. So we don’t criticize Latham for that.

But Latham’s ad uses a bit of misleading senior-scare talk, too. It says, “Boswell’s allies attack Latham to hide Boswell’s record of voting to cut Medicare by $500 billion.” That’s a misleading reference to the federal health care law, which Boswell did support.

As we’ve said several times now, the law calls for cuts in the future growth of Medicare spending over 10 years — totaling about $500 billion. That’s about a 7 percent reduction in growth. That’s not the same as slashing the current Medicare budget, which is the impression the ad leaves. Also, the law says that current benefits can’t be reduced, and it adds some coverage, like free preventive care and increased prescription drug coverage.

We included the $500 billion cut claim in our Whoppers of Campaign 2010, and the claim that Republicans voted to “end Medicare” in our Whoppers of 2011, right up there with the GOP’s claim that the new health care law is going to “kill jobs.” We noted recently that the Republicans and their allies are still using their overblown claim about jobs as they seek to defeat Democratic lawmakers. So far, all of these well-worn attacks and deceptive lines are still at the top of the playbook for both parties.

Footnote: The liberal outrage over Politifact’s “Lie of the Year” wasn’t unanimous. Kevin Drum of Mother Jones called the Ryan plan “terrible” and said it was “ridiculous” to cite the “end Medicare” claim as the worst falsehood of the year — and yet he wrote:

Kevin Drum, Mother Jones: But does that mean Democrats were justified in describing the Ryan plan as “ending” Medicare? I know we all have our tribal loyalties here, but come on. There’s no question that this is intended to mislead people into thinking that medical coverage for seniors will literally go away entirely. But it wouldn’t. … Democrats shouldn’t say that Ryan’s plan “ends” Medicare. It doesn’t, and there are plenty of short, punchy ways of making the same point more accurately.

We agree with that. But for now, Democrats are showing they prefer to mislead, rather than make their point accurately.

– by Lori Robertson, with Brooks Jackson

Sources

Congressional Budget Office. Letter to Rep. Paul Ryan. 5 Apr 2011.

House Committee on the Budget. “Path to Prosperity.” 5 Apr 2011.

Jackson, Brooks. “The Whoppers of 2011.” FactCheck.org. 20 Dec 2011.

Adair, Bill and Angie Drobnic Holan. “Lie of the Year 2011: ‘Republicans voted to end Medicare.’ ” Politifact.com. 20 Dec 2011.

Kessler, Glenn. “Mediscare Redux: Is McConnell holding debt ceiling hike hostage to Ryan Medicare plan?” Washington Post. 13 Jun 2011.

Kessler, Glenn. “The biggest Pinocchios of 2011.” Washington Post. 22 Dec 2011.

Krugman, Paul. “Politifact, R.I.P.” nytimes.com. 20 Dec 2011.

Bendavid, Naftali. “GOP Aim: Cut $4 Trillion.” Wall Street Journal. 4 Apr 2011.

U.S. House of Representatives. Roll Call Vote No. 277. 15 Apr 2011.

Rivlin, Alice, senior fellow, Brookings Institution. Phone interview with FactCheck.org. 20 Feb 2012.

Rother, John, president, National Coalition on Health Care. Phone interview with FactCheck.org. 24 Feb 2012.

Haberkorn, Jennifer. “Ryan, Wyden back a new Medicare option.” Politico.com. 14 Dec 2011.

Rovner, Julie. “Wyden-Ryan Medicare Plan Shakes Up Politics More Than Policy.” NPR.org. 15 Dec 2011.

OpenCongress.org. House roll call vote No. 165. 20 Mar 2010.

Henig, Jess, et. al. “Whoppers of Campaign 2010.” FactCheck.org. 26 Oct 2010.