Last updated on: 9/9/2010 | Author:

Will the cost to fund public health programs such as Medicare and Medicaid decrease?

General Reference (not clearly pro or con)

The “Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds,” issued by the Medicare Trustees on Aug. 5, 2010, states:

“The Affordable Care Act improves the financial outlook for Medicare substantially. However, the effects of some of the new law’s provisions on Medicare are not known at this time, with the result that the projections are much more uncertain than normal, especially in the longer-range future…

It is possible that healthcare providers could improve their productivity, reduce wasteful expenditures, and take other steps to keep their cost growth within the bounds imposed [by the Act]. For such efforts to be successful in the long range, however, providers would have to generate and sustain unprecedented levels of productivity gains—a very challenging and uncertain prospect…

The ability of new delivery and payment methods to significantly lower cost growth rates is very uncertain at this time, since specific changes have not yet been designed, tested, or evaluated. Hopes for success are high, but it would be imprudent to assume that improvements in efficiency can be made of the magnitude needed… until such enhancements are proven.”

Aug. 5, 2010 - 2010 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds

PRO (yes)


Richard S. Foster, MS, Chief Actuary for the Centers for Medicare & Medicaid Services (CMS) at the Department of Health & Human Services (HHS), wrote in his Apr. 22, 2010 memorandum titled “Estimated Financial Effects of the ‘Patient Protection and Affordable Care Act,’ as Amended”:

“Net Medicare savings are estimated to total $575 billion for fiscal years 2010-2019…

Public spending would increase… as a result of the expansion of the Medicaid program and additional CHIP [Children’s Health Insurance Program] funding but would be reduced by the net Medicare savings from the legislation…”

Apr. 22, 2010


The National Council on Aging (NCOA), in a Nov. 30, 2009 article titled “The Senate Health Care Reform Bill: How Would It Affect Older Americans?,” posted on the NCOA website, stated:

“The legislation reduces Medicare spending by more than $400 billion over 10 years… Savings would come primarily from reducing payments to private Medicare Advantage (MA) managed care plans by $118 billion…; reducing the rate of annual payment increases to Medicare providers, such as hospitals, nursing homes and home health agencies by $192 billion; and reducing Medicare and Medicaid payments by $43 billion to hospitals serving a large number of low-income patients (Disproportionate Share Hospitals).”

[Editors Note:In March 2010, President Obama signed the Patient Protection and Affordable Care Act (HR 3590), the Health Care and Education Reconciliation Act of 2010 (HR 4872), and Executive Order 13535 which restricted federal funds from being used for abortion services. Pro, Con, or Not Clearly Pro or Con positions made prior to the final wording of these three elements of the health care reform legislation may have changed since March 2010.] Nov. 30, 2009


Barack H. Obama, JD, 44th President of the United States, in his Mar. 15, 2010 speech on health care reform at the Walter F. Ehrnfelt Recreation and Senior Center, Strongsville, Ohio, made available as a transcript on the President’s official website,, stated:

“…Our proposal is paid for… We go after waste and abuse in the system, especially in Medicare. Our cost-cutting measures would… bring down our deficit by up to a trillion dollars over the next two decades.  Those aren’t my numbers.  Those are the numbers determined by the Congressional Budget Office…”

Mar. 15, 2010


The Centers for Medicare & Medicaid Services (CMS) at the US Department of Health & Human Services (HHS), in their Aug. 3, 2010 report Affordable Care Act Update: Implementing Medicare Cost Savings, stated:

“The Affordable Care Act includes a series of Medicare reforms that will generate billions of dollars in savings for Medicare and strengthen the care Medicare beneficiaries receive…

Since the law was passed more than four months ago, the Centers for Medicare & Medicaid Services (CMS) has begun work to implement many of the key cost saving provisions that will add more than $575 billion over the next 10 years to the Medicare Hospital Insurance Trust Fund.

The… provisions for which implementation has already advanced—along with the Administration’s ongoing efforts—will save nearly $8 billion within the next two years and approximately $418 billion by 2019.”

Aug. 3, 2010


Paul N. Van de Water, PhD, Senior Fellow at the Center on Budget and Policy Priorities (CBPP), and James R. Horney, PhD, Director of Federal Fiscal Policy at the CBPP, wrote in their Mar. 25, 2010 article “Health Reform Will Reduce the Deficit,” posted on the CBPP website:

“Claim: Medicare savings are double-counted [to hide cost increases].

Fact: The Medicare savings in the legislation both reduce the budget deficit and extend the life of Medicare’s Hospital Insurance trust fund. Recognizing that fact does not constitute double counting…

Claim: Congress doesn’t allow Medicare savings to go into effect.

Fact: The vast majority of the provisions enacted in the past 20 years to produce Medicare savings were successfully implemented…”

Mar. 25, 2010

CON (no)


Peter Ferrara, JD, Senior Policy Advisor on
Social Security and Medicare at the Institute for Policy Innovation and former US Associate Deputy Attorney General under President George H. W. Bush, stated in an Aug. 18, 2010 American Spectator article titled “The Obamacare Disaster”:

“Higher costs for government start with the expansion of the Medicaid entitlement, which was already slated to cost $5 trillion over the next 10 years. The Centers for Medicare and Medicaid Services [CMS] estimates that Obamacare will increase Medicaid enrollment by 24 million new beneficiaries by 2015, adding an additional $410 billion in further federal costs for the program over the next decade alone.

Obamacare increases costs for the federal government further by adopting a massive new health insurance entitlement program for families earning up to four times the poverty level… The Chief Actuary of Medicare estimates the total cost of this new entitlement will reach over $500 billion over the first six years. This is only the beginning, as this program will ultimately cost far more than now projected.”

Aug. 18, 2010


Walt Minnick, JD, MBA, US Representative (D-ID), in an Aug. 3, 2010 interview titled “A Democrat Takes On His Party’s Health Care Reform,” conducted by Robb Mandelbaum and posted on the New York Times small business blog “You’re The Boss,” stated:

“I want it [the bill] paid for — and I absolutely dispute whether it really is paid for. The half a billion dollars of future Medicare cuts is a mirage. The only thing Congress has been absolutely consistent on in the last 20 years, whether Republicans are in charge or Democrats are in charge, is we never do Medicare cuts when we’re faced with them! And the second reason I was opposed to it is the biggest problem is not how you make insurance affordable, it’s how you control costs. And aside from demonstration projects, almost none of the things that you have to do to control costs are in that bill.”

Aug. 3, 2010


Douglas Holtz-Eakin, PhD, President of the American Action Forum and Director of the Congressional Budget Office from 2003 to 2005, wrote in his Mar. 20, 2010 New York Times op-ed “The Real Arithmetic of Health Care Reform”:

“…[I]n perhaps the most amazing bit of unrealistic accounting, the legislation proposes to trim $463 billion from Medicare spending and use it to finance insurance subsidies. But Medicare is already bleeding red ink, and the health care bill has no reforms that would enable the program to operate more cheaply in the future. Instead, Congress is likely to continue to regularly override scheduled cuts in payments to Medicare doctors and other providers.”

Mar. 20, 2010


Lindsey Graham, JD, US Senator (R-SC), during a Mar. 28, 2010 debate with US Senator Charles Schumer (D-NY) on NBC’s Meet the Press, moderated by host David Gregory, stated:

“You [Democrats] spend Medicare money twice. You take $570 billion out of Medicare to pay for the healthcare bill, then you’re using that same $570 [billion] to say it lowers the growth of Medicare over time. It’s a giant Ponzi scheme. You create a new entitlement called the CLASS Act where you sell long-term health insurance to the public. You take the premiums and you don’t keep them in the system, you pay for this healthcare bill. Where does the money come from when they need the health care? So it’s a house of cards. It is a Ponzi scheme of the first order. It’s going to blow up the deficit. It’s going to affect every business, every family in this country.”

Mar. 28, 2010