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Economy Update: Medicare Taking Campaign Center Stage

by Newsteam Staff
August 20, 2012

A kidney transplant patient listens to a doctor's instructions in New York, August 1, 2012 (Keith Bedford/Courtesy Reuters). A kidney transplant patient listens to a doctor's instructions in New York, August 1, 2012 (Keith Bedford/Courtesy Reuters).

The political battle over Medicare shows no signs of slowing down as both presidential campaigns double down (NYT) on touting their plans for the government-run health insurance plan for seniors, which could have a huge impact on the future of the U.S. economy.

Drastically rising entitlement spending, particularly healthcare costs, are seen by experts as a serious threat to the U.S. economy and global competitiveness for U.S. businesses.

On CNN’s State of the Union Sunday, presumptive Republican presidential nominee Mitt Romney’s senior adviser Eric Fehrnstrom and President Barack Obama’s deputy campaign manager Stephanie Cutter went head-to-head defending their candidates plans.

“[O]ne of the important principles [Romney] will follow in reforming that entitlement is making sure that none of the changes affect current seniors and that is people age 55 and above,” Fehrnstrom said.

But Cutter argued that under the Romney-Ryan plan Medicare will be bankrupt in four years, while President Obama has “found savings by cutting subsidies to insurance companies, ensuring we were rooting out waste and fraud, and he used those savings to put it back into Medicare.

In a study published in the Journal of the American Medical Association, researchers Harvard’s medical school examine the Ryan-Wyden voucher plan for Medicare and find that seniors would pay an additional $64 a month in premiums if implemented. At the conservative think tank the American Enterprise Institute, James Capretta and Yuval Levin say that while  “the [Harvard] study turns out to offer one of the strongest cases yet published in favor of premium support,” the study’s authors were wrong to “suggest that the lower cost of private options would somehow increase premiums for many seniors.”

At progressive magazine, The American Prospect, Paul Waldman looks at campaign Medicare claims and counter-claims and what is driving up Medicare costs in spite of what he says is a relatively efficient federal program. He criticizes what he says is Romney’s refusal “to propose changing the way Medicare pays for care, or suggest any pilot programs or any incentives to lower costs.”

For more on the candidates’ stances, check this issue tracker on The Candidates and the Economy.

Suggested Other Reading:

In spite of  huge increases in healthcare costs — projected to be 40 percent of U.S. federal spending  by 2037 — a study in the New England Journal of Medicine shows health spending was slowing down before the 2008 recession began.

Contributing Editor Gayle S. Putrich and Senior Editor Toni Johnson

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