Last updated on: 10/18/2012 | Author:

Does Obamacare Do a Good Thing and Save $716 Billion in Medicare Expenses (Pro Side) or Do a Bad Thing and Cut $716 Billion from Medicare (Con Side)?

General Reference (not clearly pro or con)

[Editor’s Note: Provisions relating to Medicare funding can be found in The Patient Protection and Affordable Care Act, Title III, “IMPROVING THE QUALITY AND EFFICIENCY OF HEALTH CARE,” from page 235-420. Some of the areas in Title III where Medicare funding is discussed include the following: Part I, “LINKING PAYMENT TO QUALITY OUTCOMES UNDER THE MEDICARE PROGRAM,” Subtitle B, “Improving Medicare for Patients and Providers,” Subtitle D, “Medicare Part D Improvements for Prescription Drug Plans and MA–PD Plans,” Subtitle E, “Ensuring Medicare Sustainability,” and Subtitle G, “Protecting and Improving Guaranteed Medicare Benefits.”

In addition to the various provisions pertaining to Medicare funding in Title III , additional changes to Medicare funding are made in Title IV, “Transparency and Program Integrity,” in Subtitle E, “Medicare, Medicaid, and CHIP Program Integrity Provisions,” starting on page 629.] Mar. 23, 2010 - Patient Protection and Affordable Care Act (HR 3590)

Mary Agnes Carey, MA, Kaiser Health News Staff Writer, stated the following in her Aug. 17, 2012 article “FAQ: Decoding the $716 Billion in Medicare Reductions,” available at

“Romney and other Republicans over the past two years have criticized President Barack Obama and Democrats for cutting $500 billion from the Medicare program over the next decade as part of the 2010 health care law. In the past couple of weeks, the number that Romney is using has grown to $716 billion…

…The $500 billion figure comes from a March 2010 analysis that estimated the 2010 federal health law’s effects on Medicare spending and was put together by the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT). It covered the budget years 2010-2019.

As part of their efforts to repeal the law, congressional Republicans in July asked the two agencies to estimate the impact of a repeal on Medicare.

That July analysis, which covered the years 2013-2022, determined that the health law is expected to reduce Medicare spending by $716 billion. It is higher than the previous figure because it covers a later time frame that includes greater Medicare spending reductions…

The July reportfrom CBO and JCT — in explaining where some of the biggest reductions would occur -found that hospital reimbursements would be reduced by $260 billion from 2013-2022, while federal payments to Medicare Advantage, the private insurance plans in Medicare, would be cut by approximately $156 billion. Other Medicare spending reductions include $39 billion less for skilled nursing services; $66 billion less for home health and $17 billion less for hospice. The law does not make any cuts to the amount of benefits beneficiaries receive and adds some new benefits, including closing the ‘doughnut hole’ gap in Medicare prescription drug coverage, and new preventive services, such as an annual wellness visit with a physician.”

PRO (yes)


Barack Obama, 44th President of the United States, stated the following during the Oct. 3, 2012 Presidential debate in Denver, CO, “Transcript and Audio: First Obama-Romney Debate,”

“…[I]n Medicare, what we did was we said, we are going to have to bring down the costs if we’re going to deal with our long term deficits, but to do that, let’s look where some of the money is going. Seven hundred and sixteen billion dollars we were able to save from the Medicare program by no longer overpaying insurance companies, by making sure that we weren’t overpaying providers. And using that money, we were actually able to lower prescription drug costs for seniors by an average of $600, and we were also able to make a — make a significant dent in providing them the kind of preventive care that will ultimately save money through the — throughout the system.”


John E. McDonough, DPH, Director of the Center for Public Health Leadership at the Harvard School of Public Health, wrote in his Aug. 12, 2012 article “The Republican Candidate Said that President Obama ‘Robbed’ Medicare of $716 Billion to Pay for ObamaCare/the Affordable Care Act (ACA). Sounds Serious. Is It True?,” available at

“According to Romney, Obama went into the ‘Medicare Trust Fund’ room in the Treasury Department walked out with 716 really, really big ones, and leaving the Trust Fund depleted by that amount, jeopardizing its solvency for more than 40 million senior citizens and disabled persons. Sounds nefarious.

Not quite.

No money from the ‘Trust Fund’ was withdrawn. By reducing rates paid to hospitals, health insurance plans, and other medical providers (not physicians, by the way — a mistake being made by media all over the place), the ‘draw’ out of the fund is reduced by $716 billion between federal fiscal years 2013-22 (it was $449 billion between 2010-19 when the ACA was signed in Mar. 2010). If the ACA is implemented as passed, then $716B less will be withdrawn over those ten years, meaning the Medicare Trust Fund will have about eight more years of solvency than if the ACA had not been signed into law.

That’s the truth. Honest. It’s the difference between eating into your savings account (what Romney charges) versus reducing your spending so that you don’t have to (what the ACA does).”

CON (no)


Mitt Romney, JD, Presidential Candidate, stated the following at an Aug. 14, 2102 campaign event quoted by Tim Cohen, CNN Reporter in the Aug. 15, 2012 article “Obama, Romney Spar over Medicare in Battleground States,” available at

“When he ran for office he said he’d protect Medicare, but did you know that he has taken $716 billion out of the Medicare trust fund — he’s raided that trust fund — and you know what he did with it… He’s used it to pay for Obamacare — a risky, unproven, federal government takeover of health care — and if I’m president of the United States we’re putting the $716 billion back.”


Karl Rove, former Senior Adviser and Deputy Chief of Staff to President George W. Bush, wrote in an Aug. 15, 2012 article “The GOP’s Medicare Advantage,” available at

“The president’s legislation cuts Medicare by $716 billion to pay for ObamaCare. But because so many baby boomers are turning 65, Medicare is going broke. (Thanks in part to ObamaCare cuts, Medicare’s hospital trust fund will be insolvent by 2024, according to the Social Security and Medicare Boards of Trustees.)

Rather than steal from the health-care program for seniors to finance expanding health care for younger Americans, Mr. Romney would repeal ObamaCare and return that $716 billion to Medicare to shore up its ragged finances…”