The clash over Medicare Advantage, and other debate leftovers

at 06:02 AM ET, 10/15/2012

Rep. Paul Ryan: “7.4 million seniors are projected to lose their current Medicare Advantage coverage they have. That’s a $3,200 benefit cut.”

Vice President Biden: “That didn’t happen.”

Ryan: “What we’re saying. . .

Biden: “More people signed up.”

Ryan: “These are from your own actuaries.”

Biden: “More people signed up for Medicare Advantage after the change.”

— exchange during the vice presidential debate, Oct. 11, 2012

We had done a quick roundup of many claims in the vice presidential debate but wanted to dig deeper into this interesting exchange. Afterward, we also have a look at a pair of outstanding items from the first presidential debate.

Many viewers were probably puzzled by this back-and-forth over Medicare between Vice President Biden and the GOP vice presidential nominee, Rep. Paul Ryan (R-Wis). The strange thing is that both are right — but Ryan has a distinct edge in the argument.

The Facts

Medicare Advantage is the private alternative to the traditional insurance program for seniors, with 13.1 million beneficiaries, or about 27 percent of the Medicare population. We’ve previously explored some of the debate concerning the $145 billion reduction in projected spending for Medicare Advantage contained in the health-care law, which is intended to reduce costs in a program in which the government pays more per senior than in traditional fee-for-service Medicare.

Ryan is correct that the Medicare actuary, Robert S. Foster, estimated that the projected enrollment in Medicare Advantage would be halved under the law. “We estimate that in 2017, when the MA provisions will be fully phased in, enrollment in MA plans will be lower by about 50 percent (from its projected level of 14.8 million under the prior law to 7.4 million under the new law),” Foster wrote.

Note that this is from a projected level that is currently higher than enrollment today (13.1 million), so the actual projected reduction from today’s level is 5.7 million. But Ryan absolutely nailed the number in Foster’s estimate, even noting that it is a projected figure. (His claim of a $3,200 benefit cut came from a report by the right-leaning Heritage Foundation.)

What about Biden’s response that enrollment has gone up “after the change”? This is technically correct, but misleading. Enrollment in Medicare Advantage plans have gone up from 11.1 million (when the health care law was approved) to 13.1 million today — but most of the reductions in Medicare Advantage have not taken effect yet.

Moreover, in what Republicans believed was a politically motivated move, the administration earlier this year essentially deferred the planned cuts with a $6.7 billion infusion of funds into Medicare Advantage. The cuts were to begin to take effect this year, but the action helped mitigate the impact in this election year.

Still, the Kaiser Family Foundation cautioned in a report that the extra payments could not fully explain why enrollment has continued to climb:

The Medicare Advantage marketplace is robust based on plan participation and enrollment. While new quality based bonus payments may have helped to mitigate the effects of the payment reductions that are now being phased in, the trend towards growing Medicare enrollment has been persistent over time and is unlikely to be fully explained by quality bonus payments alone, but rather a combination of historical trends in payment, new quality bonuses, the continued erosion of retiree benefits, and other factors affecting beneficiary choice.

The Pinocchio Test

Readers should always keep in mind that projections are only estimates, and so claims of potential cuts should be taken with a grain of salt. Still, Ryan was correct that the Medicare actuary estimated that millions of retirees would switch out of Medicare Advantage in response to the reductions contained in the health care law — and Biden was being misleading when he said enrollment has continued to climb “after the change.” Those cuts have largely not yet taken place, in part because of some election-year spending by the administration. So Biden gets the Pinocchios in this case.

Two Pinocchios






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Romney: preexisting conditions

“Number one, preexisting conditions are covered under my plan.”

— Mitt Romney, Oct. 3 presidential debate

This sounds similar to a core feature of President Obama’s health-care law, but it is not. Our colleagues at WonkBlog first pointed out the fallacy in this statement by Romney — which he has made before — and we have been too busy to delve deep into it. But even Romney’s advisers after the debate acknowledged that Romney’s plan on this issue differs from the Obama health-care law.

“We’d like them to see them continue that preexisting band for those who have continuous coverage,” said senior adviser Eric Fehrnstrom.

The key phrase here is “continuous coverage,” which is also highlighted on Romney’s campaign Web site, because it essentially means you already need to have insurance in order to be protected. The Obama law stipulates that one could not be denied for preexisting conditions even if one does not have insurance.

This is a good example of a politician using similar-sounding words to mislead listeners, and so Romney earns Three Pinocchios.





***

Obama: teacher layoffs

“We’ve seen layoffs of hundreds of thousands of teachers over the last several years.”

— President Obama, Oct. 3 presidential debate

We had explored this issue in detail before, and the president greatly overstates the case. Technically, the number of people employed in “local government education” has declined by 180,000 jobs since February 2010, according to the Bureau of Labor Statistics. (This is the date administration officials often use to compare public-sector jobs with private-sector jobs, because that’s when private-sector job growth began to increase. The decline is 209,000 from when Obama took office.)

The Obama campaign has claimed the “local government-education” figure is a proxy for teachers, but the BLS disagrees. As anyone who has children in public schools knows, there are many people employed by the school who have little to do with teaching, such as administrators, nurses, “food preparation workers,” and so forth.

For instance, about 10 percent of the total education jobs are in administration or clerical support, 5 percent are food preparation workers, 4 percent are janitors, and 3 percent are bus drivers, according to BLS data. All told, only about 67 percent of the jobs could be broadly defined as being held by “teachers,” which includes teaching assistants (11 percent of the jobs). That’s being generous, because if only full-time teachers are counted, it works out to about 50 percent.

Applying that 67 percent formula yields a loss of 121,000 teacher jobs since February of 2010, or 140,000 since Obama took office. That’s a lot, but not the same as “hundreds of thousands.” Obama earns Two Pinocchios.





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    About the Blogger

    Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street.

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