Romney thinks best defense on Medicare is good offense (updated)

For the past ten days, GOP strategists have worried anonymously that Representative Paul Ryan’s presence on the national ticket will hurt Mitt Romney’s campaign, especially in the must-win state of Florida. One of the top Democratic talking points of the last year and a half has been Ryan’s plan to “end Medicare as we know it” by forcing future retirees to purchase government-subsidized private health insurance.

Romney’s strategists seem to have decided that the best defense on Medicare is a good offense. A television commercial launched last week attacked President Barack Obama’s record on Medicare, and a brand-new spot echoes that charge. Both videos are after the jump, along with transcripts and one of the Obama campaign’s response ads.

On August 15, the Romney campaign started running a spot called “Paid In,” which seeks to link Medicare’s fiscal problems to the 2010 health insurance reform law.

Annotated transcript:

Male voice-over: You paid in to Medicare for years. Every paycheck. [Visual of sad-looking older man looking into camera. Words on screen YOU PAID]

Now, when you need it, Obama has cut $716 billion dollars from Medicare. [Visual of large empty wheelchair, which shrinks to make room for words on screen: OBAMA CUT $716 BILLION FROM MEDICARE Congressional Budget Office 07.24.12]

Why? To pay for Obamacare. [Visual of medicine capsule linking words TO PAY FOR above with OBAMACARE below]

So now the money you paid for your guaranteed healthcare [visual of stethoscope lying on blank white screen, words THE MONEY YOU PAID FOR YOUR GUARANTEED HEALTH CARE]

Is going to a massive new government program that’s not for you. [visual of an empty hospital bed with a breakfast tray, words on screen MASSIVE NEW GOVERNMENT PROGRAM THAT’S NOT FOR YOU]

The Romney-Ryan plan protects Medicare benefits for today’s seniors and strengthens the plan for the next generation. [Photo of Romney and Ryan waving to crowd of supporters, then photo of Romney greeting veteran, then photo of Ryan talking with older woman, words on screen PROTECTS MEDICARE BENEFITS]

Romney’s voice: I’m Mitt Romney, and I approved this message. [Photo of Romney and Ryan waving to supporters, campaign logo and website on screen]

The commercial makes it sound as if the Medicare cuts have already happened, although those are planned spending reductions over the next decade, and the savings are supposed to come from eliminating waste in the program.

Nevertheless, Ryan has been hammering the Romney campaign’s talking point in his stump speeches:

“Nearly one out of six hospitals and nursing homes are going to go out of business, or just stop taking Medicare patients, because you know why? President Obama treated Medicare like a piggy bank to fund ObamaCare, and his campaign calls that an ‘achievement,’ ” Ryan said Tuesday on the campaign trail in Carnegie, Pa.

In reality, Ryan’s budget plan included the same savings from Medicare as “Obamacare” does.

The 2010 health care law cut Medicare reimbursements to hospitals and insurers, not benefits for older Americans, by that amount over the coming decade. But repealing the savings, policy analysts say, would hasten the insolvency of Medicare by eight years – to 2016, the final year of the next presidential term, from 2024.

While Republicans have raised legitimate questions about the long-term feasibility of the reimbursement cuts, analysts say, to restore them in the short term would immediately add hundreds of dollars a year to out-of-pocket Medicare expenses for beneficiaries. That would violate Mr. Romney’s vow that neither current beneficiaries nor Americans within 10 years of eligibility would be affected by his proposal to shift Medicare to a voucherlike system in which recipients are given a lump sum to buy coverage from competing insurers.

For those reasons, Henry J. Aaron, an economist and a longtime health policy analyst at the Brookings Institution and the Institute of Medicine, called Mr. Romney’s vow to repeal the savings “both puzzling and bogus at the same time.”

The Des Moines Register’s editorial board commented on August 20,

Our elected officials have starved Medicare. They add costly benefits, such as prescription coverage, without increasing the revenue to pay for such changes. People like Romney insist the program is structurally and fundamentally flawed. It’s not. But in choosing Rep. Paul Ryan as his running mate, it’s clear how Romney wants to “fix” Medicare.

It doesn’t get much worse than the congressman’s plan.

In a nutshell, Ryan proposes providing subsidies so seniors can sign up for commercial insurance. Instead of Medicare directly paying your doctor, the government would send a check to the private insurer who is supposed to be managing your care. Such an arrangement has been a proven fiscal failure in “Medicare+Choice” plans in the 1990s and in Medicare Advantage plans today. It costs taxpayer more than basic Medicare, and it creates confusion for seniors. Some health providers would not accept these plans.

But some politicians just keep pushing the idea. They keep saying that the private sector is better than the government at delivering health care. They keep hoping Americans will believe it’s true. Fortunately, Americans didn’t just fall off the turnip truck.

The president may not be so confident that Americans will see through the Medicare attacks. The Obama campaign responded to last week’s Romney commercial with a new 30-second spot launched on August 17. “Facts” defended the president and attacked Ryan’s plan.

Annotated transcript:

Obama’s voice: I’m Barack Obama and I approve this message. [footage of Obama walking outside, next to the White House]

Female voice-over: Now Mitt Romney’s attacking the President on Medicare? [Screen shows part of Washington Post article from 8/14/12, headline Romney turns Medicare attack against Obama in new ad, view zooms in to direct attention to word “Medicare”]

The nonpartisan AARP says Obamacare “cracks down on Medicare fraud, waste and abuse, and strengthens guaranteed benefits.” [word AARP on screen, then photo of Obama with American flag in background, words AARP 6/28/12 3/19/10 “cracks down on Medicare fraud, waste and abuse” “strengthens guaranteed benefits in Medicare”]

Voice-over continues: The Ryan plan? [Photo of Romney and Ryan with American flag in background, words on screen THE RYAN PLAN?]

AARP says it would undermine Medicare and could lead to higher costs for seniors. [Photos of Ryan and Romney next to each other, words on screen THE RYAN PLAN “would undermine the market power of Medicare and could lead to higher costs for seniors” AARP 3/21/12]

And experts say his voucher plan could raise future retirees’ costs more than six thousand dollars. [photo of older woman sitting at a table, looking stressed as she holds what might be a bill in her hand; words on screen RAISE SENIORS’ COSTS BY $6,400 A YEAR Center on Budget and Policy Priorities, 4/8/11]

Get the facts. [words on screen Get the Facts: ]

The brand-new Romney spot, launched in Iowa and other swing states today, is called “Nothing’s Free.”

Annotated transcript:

Male voice-over: Some think Obamacare is the same as free health care. [Graphic shows two medicine capsules in center of screen, connecting words OBAMA CARE on left with FREE HEALTH CARE on right]

Voice-over continues: But nothing is free. Obama is raiding $716 billion from Medicare, changing the program forever. [Photo of Obama smiling and waving, words on screen OBAMA IS RAIDING $716 BILLION FROM MEDICARE Congressional Budget Office 7/24/12]

Taxing wheelchairs and pacemakers. [image of empty wheelchair on screen next to words TAXING WHEELCHAIRS AND PACEMAKERS]

Raising taxes on families making less than $120,000. [aerial footage of middle-class neighborhood, words on screen HIGHER TAXES $120,000 OR LESS Congressional Budget Office 12/2010]

Free health care comes at a very high price. [Words on screen in red against plain white backdrop: FREE HEALTH CARE COMES AT A VERY HIGH PRICE]

The Romney-Ryan plan will restore Medicare funding and protect and strengthen the program for the next generation. [triumphant music plays in background, color footage of Romney and Ryan greeting supporters at a rally, words on screen ROMNEY-RYAN PLAN PROTECT MEDICARE]

Romney’s voice: I’m Mitt Romney, and I approved this message. [Romney campaign logo and website on screen]

As with most of the other political ads I’ve seen this year, I suspect these commercials are not changing anyone’s minds, only reinforcing preferences already formed for each candidate.

Any comments about Medicare or the presidential campaign in general are welcome in this thread.

Romney is holding an event in Bettendorf today. I’ll update this post later with news clips. Obama is planning two more short Iowa visits next week, when the Republican National Convention will be dominating the political news.

UPDATE: O.Kay Henderson covered the Romney event for Radio Iowa.

Today, employees of the business Romney visited stood behind him on stage, wearing t-shirts which read “Government Didn’t Build My Business, I Did.” At one point Romney turned to speak to the group.

“To the team back here that did build this business, congratulations on the work you’ve done,” Romney said. […]

Rob Zimmerman – the co-president of LeClaire Manufacturing which was the site of Romney’s event – also criticized Obama during his remarks to the crowd.

“Over 30 years of working in LeClaire Manufacturing, I haven’t had one person come up to me and say, ‘Hey Rob, it’s a good thing the government helped you make this company grow.’ Not once,” Zimmerman said, to cheers from his employees and the Romney supporters invited into his business for the campaign event.

Romney began his remarks by praising Zimmerman’s speech and suggesting the eastern Iowa businessman should run for office. Romney concluded his remarks with a new challenge to his Iowa supporters.

“I want you to each find one person who voted for Barack Obama last time and convince them that we should take a different course. Remind them how disappointing it’s been over the last three-and-a-half years,” Romney said this afternoon in Bettendorf. “Find ’em. Talk to them. Get them to the polls.”

Allow me to be the first: Hey Rob, it’s a good thing the federal government’s massive military budget supports the various defense contractors who use LeClaire Manufacturing as a supplier.

Hey Rob, it’s a good thing government farm subsidies support LeClaire Manufacturing’s many customers in the agriculture sector.

Hey Rob, it’s a good thing the government maintains the highways, local roads, utilities, and sewer lines that allow your company to function.

Hey Rob, it’s a good thing the government has educated the children who grew up to be your employees.

Also, Rob, it’s a good thing state government helped subsidize your engineering degree at Iowa State University. Presumably that education helped your business career a little bit.

SECOND UPDATE: The Obama campaign’s latest tv ad in Iowa says the Ryan budget would increase school class sizes by cutting government spending on education.

THIRD UPDATE: The Obama campaign launched another television commercial about Medicare on August 25. “Promises” will run in Iowa, Colorado, Nevada, Ohio and Virginia, and later in Florida, North Carolina and New Hampshire as well.

Annotated transcript:

Obama’s voice: I’m Barack Obama, and I approve this message [photo of Obama speaking to an elderly woman]

Male voice-over: It’s a promise that was made long ago. [Black and white photo of President Lyndon Johnson signing the Medicare bill in 1965; words on screen A PROMISE]

You work hard, pay in, your Medicare benefits are guaranteed. [footage of man stocking grocery store shelves, words on screen YOU WORK HARD; shifts to footage of woman working with papers at a desk, words on screen YOU PAY IN; shifts to footage of medical personnel speaking with a patient, words on screen YOUR MEDICARE BENEFITS ARE GUARANTEED]

But Mitt Romney would break that promise, [photo of Romney standing next to Paul Ryan, both waving at crowd of supporters, words on screen MITT ROMNEY WILL BREAK THAT PROMISE]

replace your benefits with a voucher. [Man looks into camera, words on screen REPLACES BENEFITS WITH A VOUCHER Associated Press, 11/4/11]

Insurance companies could just keep raising rates. [Senior citizen handling bills at kitchen table, words about replacing benefits remain on screen, plus these words are added: INSURANCE COMPANIES COULD RAISE RATES, Boston Globe 8/18/12]

Instead of a guarantee, seniors could pay sixty-four hundred dollars more a year. [footage of woman putting various prescription medications in a pillbox; words about replacing benefits and raising rates remain on screen, plus these words are added: SENIORS PAY $6400 MORE A YEAR, Center on Budget and Policy Priorities]

AARP says the plan Mitt Romney supports undermines Medicare. [footage of older woman sitting in doctor’s office, words on screen “WOULD UNDERMINE…MEDICARE” AARP 3/21/12]

Mitt Romney. An end to the Medicare Promise. [Photo of Romney, words on screen MITT ROMNEY AN END TO THE MEDICARE PROMISE; in small print at bottom of screen, Approved by Barack Obama. Paid for by Obama for America.]

Romney’s campaign responded,

“The Obama campaign’s Medicare ad is false,” Romney’s Iowa spokesman Shawn McCoy said this morning. “Governor Mitt Romney will protect and strengthen Medicare, while President Obama has no plan to save the program from going bankrupt.”

“Worse yet,” McCoy said, “the president robbed $716 billion from Medicare to pay for Obamacare, resulting in millions of retirees being punished with changes to their current plans and thousands of hospitals seeing massive funding cuts. As president, Mitt Romney will reverse these disastrous cuts, ensuring Medicare is protected for today’s seniors and strengthened for future generations.” doesn’t think highly of either campaign’s advertising claims about Medicare.

An Obama spokeswoman says that “benefits would go down” under the Medicare plan put forth by Ryan, and largely embraced by Romney. Ryan says cuts in Obama’s health care law to the growth of spending “will lead to fewer services for seniors.” But actually, neither plan has much of a direct impact on current beneficiaries.

A Romney campaign ad wrongly claims that “money you paid” for Medicare is being used to pay for Obama’s health care law. But the law doesn’t take money out of the existing hospital insurance trust fund. It cuts the future growth of spending. And in the future, seniors will still receive more in benefits than they paid in.

Obama says Ryan’s “original plan would force seniors to pay an extra $6,400 a year.” But that’s based on an outdated analysis; Ryan’s current plan is more generous than his first. In fact, over the long run, both men propose capping the growth of Medicare spending at the same rate.

  • cut to the chase

    the plan has always been to extend the premium support system of the ACA to 65+, which is why Ezekiel Emanuel was brought on board back in 2009.

    The only issue now is whether it will be with or without the Medicare “public option.” Hence, David Cutler, Obama health care advisor:

    At the very least, it makes sense to see how premium-support works in the non-elderly population, since their health needs overall are less severe. The Affordable Care Act does that, by creating “exchanges” for people who don’t have employer-sponsored coverage. Watching and learning from that initiative would help in designing a workable system for the elderly. That is why, on many counts, the biggest lesson is that allowing the Affordable Care Act to work-rather than trying to take it off the books-might be the best way for premium support to succeed.

    I recommend reading the supporting JAMA article. It should be clear as a bell that both parties intend to approach the upcoming insolvency via cost-shifting.

    The reality is that the ACA is based on pie-in-the sky: GDP growth not seen since post-WW2 and more unicorns. The Republican plan is deceptive in that it does rely on cost controls in the ACA to reduce premium support risk.

    Essentially, the Obama plan/Ryan-Wyden plans are the same.

    • Cost shifting to enrich the insurance industry n/t

      • yes,

        quoting the fire & brimstone from the DMR editorial:

        But some politicians just keep pushing the idea. They keep saying that the private sector is better than the government at delivering health care. They keep hoping Americans will believe it’s true. Fortunately, Americans didn’t just fall off the turnip truck.

        Who owns the most luxurious buildings in town, pays sky-high CEO salaries and spends a fortune on “administrative expenses”? Private insurance companies. Where do they get their money? From the increasingly expensive premiums their customers pay. That money spent on board member salaries and country club memberships for executives is money not spent on health care.

        Yet, they are quite anxious for this to transpire for under 65 (or 67, depending). One argument perhaps is that the needs of under-65 are less severe. However, we just had a discussion, courtesy of the Supreme Court, about the penalty for abstaining being sufficiently low that the healthy can take a pass. I’m not sure anyone knows what the pool will look like.

        Next, to address the “they keep saying,” — the quoted material in my other comment isn’t from shady Republican politicians. It’s written by a Harvard economist who served as a health care advisor to the Obama08 campaign, for pity’s sake.

        it’s possible that the private plans are cheaper because they really do offer the same benefits at a lower cost. It’s also possible that the private plans are cheaper because the insurers are very good at attracting the best risks-that is, the healthiest seniors least likely to run up medical bills-or because they don’t also subsidize other parts of our health care system, such as medical education. In effect, they may be gaming the system. At this point, we really don’t know which answer is correct, although it’s entirely possible all three are true, to an extent.

        IOW, Cutler is not rubber-stamping Ryan-Wyden, but proposes using ACA as a template to see how premium support “works” under-65.

        Watching and learning from that initiative would help in designing a workable system for the elderly. That is why, on many counts, the biggest lesson is that allowing the Affordable Care Act to work-rather than trying to take it off the books-might be the best way for premium support to succeed.

        Mmm. Notice something funny? Right, the ACA has no “public” equivalent to make the appropriate comparison. On the flip side, claiming that “government” has the ticket on delivering health care is another fast one. By cutting reimbursement rates and cost-shifting to the private sector?

        I expect more of ACA/Ryan-Wyden, like peas and carrots, in the future. Sure, the competing ads make no sense. Yep, Ryan envisions the same cuts. They are necessary in the premium support risk model. Where Obama left himself wide open was that he didn’t have a real proposal for “solving Medicare” on the table. (This was intended for post-election.) After all, we’re supposed to have cuts after GDP + 0.5%, right? Since when is the GDP anywhere close to Medicare inflation?

        Finally, this whole “govt vs private” nonsense that the campaigns have drummed up as a proxy war for something … is ridiculous. Note — it is possible to contract for the govt almost exclusively and still have to manage risk.  

  • sure

    Allow me to be the first

    but one question: what experience do you have with building a business?

    • well, then

      Some thoughts.

      Obama stepped into “invented the internet” territory. Just as we hear to this day “Al Gore invented the internet,” we will hear “you didn’t build that.” Dumb, IMO.

      As a native of the DC area, I think “Rob’s” comment is in line with the attitude that the government is just another market. It has its ups and downs. A Cedar Rapids company is laying off 75 due in part to tax credit renewal uncertainty. I have a friend who lost his law partnership at a fairly prestigious DC firm due to some action under Bush that repealed an energy act on which he was an expert. I read this morning Gallup is being sued by the DOJ. Govt work comes with its own special headaches like an abundance of paperwork. The bigger companies like Lockheed diversify to absorb the ups and downs; the big defense contractors are expected to be reasonably stable if sequestration cuts go through. It’s the smaller companies that will take the hit, perhaps Rob as well.

      I think for people who actually take risks on ventures that don’t pan out or were never serious in the first place, looking out at the roads & bridges is a cold comfort. Even the smallest businesses involve risk. Fun example is from the US Open (golf) in 2011. The kids of the Marriott and Lockheed Martin families ran a lemonade stand near the US Open grounds in Bethesda. Montgomery County, MD fined them $500, claiming jurisdiction over the roadways. How funny is it that the Lockheed/Marriott moms said this feels like a whole lot of government to me? And the outrage from the Huffington Post! Lesson learned: entrepreneurship is highly valued in the US. I thought this was a political golden rule.

  • an open comment

    – if you’re under 55

    – you don’t live off of investment income tied to the same outfits that have purchased the pols

    – both parties fall short of your expectations

    There are several “uniquely American” issues that keep our health costs high. One of them is our subsidizing drug and medical device development for the rest of the world. This is largely a “marketplace” issue. I do not agree with the simplistic view that these are products of government/academic “research” and thus in the public commons. A second issue is physician compensation vs the cost of a medical education in the US. A third and related issue is the relationship between government subsidies within a fee-for-service structure which is used to compensate for government-imposed cost controls — currently limited to reimbursement rates. This is your “fraud, waste and abuse.” It’s up to your imagination to figure out what happens in the absence of a compensatory mechanism.  

    The good news is that both parties are actually on the same page if you read between the lines. Republicans, the broad strokes of the ACA are here to stay. Democrats, the “premium support” concept is not going away — it never did. And btw, neither party wants to hold on to “Medicare as we know it.” The government wants to get out of the Medicare biz, just as we won’t see a restoration of the payroll tax but instead will be encouraged to invest in personal pension plans that are “professionally managed” but without government guarantees of solvency. I find it remarkable that the “public option” scam is about to get played out yet again.

    For those who can afford to do so, the smart bet is to start putting aside the equivalent of about $70/month for the span of retirement years. It’s harder the closer you are to 55, so don’t rely on Heroic Democrats to save you from Evil Republicans. For the record, I don’t care who you vote for.

  • "you didn't build that," redux

    From DMR opinion:

    We can afford to rebuild this critical infrastructure, and we must. It won’t happen, however, until government is seen as a partner in progress, not the enemy. Unfortunately, the tone from both presidential candidates is adding poison rather than wisdom to the discussion.

    I very much doubt that most Americans (perhaps excepting extreme partisans) misunderstand this, but there’s a problem. The great period of infrastructure development is from a period when people believed government worked for them and not for special interests. I don’t care which side you’re on, government allocation is now scrutinized as a prospective payoff to campaign donors.

    There was a recent op-ed supporting Harkin’s proposal to establish retirement contributions to be used precisely for this purpose: infrastructure investment. However, the contributions are not backed with a fed guarantee and are to be managed by “professionals,” that is, Wall Street. I’d suggest that government has to be seen as serious about cracking down on Wall Street instead of coming across as completely captured to donors. This is where the problem really is.

    Problems don’t get solved by appropriate “tone.”

    For a refresher, read the book by Felix Rohatyn, a former Wall Street investment banker and U.S. ambassador to France. In “Bold Endeavors: How Our Government Built America, and Why It Must Rebuild Now,” Rohatyn reminds how America prospered when it annexed a huge hunk of the continent with the Louisiana Purchase and then opened that region to settlement and development with the transcontinental railroad and the Homestead Act. Life in rural America was improved with the aid of land grant colleges, and a generation of soldiers returning from war got an education through the G.I. Bill.

    The nostalgia is nice, but the reality is different. I am on a major college campus every day.

    However, in states where higher-education funding has been severely cut, some schools have discussed whether getting so much less money from taxpayers makes them more private than public.

    Goldsmith said she’s heard a few East Coast public universities refer to themselves as “publicly assisted institutions” because their public support is so low.

    I’m sure the average student prioritizes the private sector because so many of the buildings have been renamed; so many aspects of college life have gone completely corporate.

    The student loan business is a racket driven by edu inflation that rivals the health industry racket. Govt assistance is swamped by the now mainstream student loan model.

    And there’s an ugly reality: the heralded infrastructure is largely absent in any region/neighborhood not inhabited by the affluent. Try locating a business in many places in America where law enforcement response is less than optimal, or where the schools are run down. Of course, this is an argument for bolstering infrastructure but will not win support when seen as disproportionately favoring the affluent.

    Neither Obama or Romney are particularly helpful when taking their extreme positions. Starving government (cuts, austerity) are not the answer and will obviously crater the economy. Hectoring small business owners with invective like “think they’re smart” is counterproductive. Small business is least likely to benefit from govt assistance (it’s large business) and this idea that people should not expect to reap the rewards of hard work seems to be in vogue with people who don’t know anything about running a business. The fact is that small business owners are the ones who absorb the losses associated with risk, so this idea that “we” are all “co-owners” comes across as a little silly.

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