Journalism in the Public Interest

Where the Candidates Stand on Medicare and Medicaid

You’ve heard the candidates talk about their plans to change coverage—now see what the facts are.



Medicare and Medicaid, which provide medical coverage for seniors, the poor and the disabled, together make up nearly a quarter of all federal spending. With total Medicare spending projected to cost $7.7 trillion over the next 10 years, there is consensus that changes are in order. But what those changes should entail has, of course, been one of the hot-button issues of the campaign.

With the candidates slinging charges, we thought we’d lay out the facts. Here’s a rundown of where the two candidates stand on Medicare and Medicaid:


Big Picture

Earlier this year, the Medicare Board of Trustees estimated that the Medicare hospital trust fund would remain fully funded only until 2024. Medicare would not go bankrupt or disappear, but it wouldn’t have enough money to cover all hospital costs.

Under traditional government-run Medicare, seniors 65 and over and people with disabilities are given health insurance for a fixed set of benefits, in what’s known as fee-for-service coverage. Medicare also offers a subset of private health plans known as Medicare Advantage, in which roughly one-quarter of Medicare beneficiaries are currently enrolled. Obama retains this structure.

The Obama administration has also made moves that it says would keep Medicare afloat. It says the Affordable Care Act would extend solvency by eight years, mainly by imposing tighter spending controls on Medicare payments to private insurers and hospitals.

In contrast, Rep. Paul Ryan, Mitt Romney’s running mate, has proposed a more fundamental overhaul of Medicare, which he says is on an “unsustainable path.” On his campaign website, Romney says that Ryan’s proposals “almost precisely mirrors” his ideas on Medicare. But he’s been fuzzy on other aspects of the plan.

A Romney-Ryan administration would replace a defined benefits system with a defined contribution system in which seniors are given federal vouchers to purchase health insurance in a newly created private marketplace known as Medicare Exchange. In this marketplace, private health plans, along with traditional Medicare, would compete for enrollees’ business. These changes wouldn’t start until 2023, meaning current beneficiaries aren’t affected – just those under 55.

Under the Romney-Ryan, the vouchers would be valued at the second-cheapest private plan or traditional Medicare, whichever costs less. Seniors who opt for a more expensive plan would pay the difference. If they choose a cheaper plan, they keep the savings.

Who’s covered

In the current system, people 65 and over are eligible for Medicare, which Obama has said he would keep for now. 

Romney has proposed raising the eligibility age for Medicare beneficiaries from 65 to 67 in 2022, then increasing it by a month each year after that. In the long run, he would index eligibility levels to “longevity.” Ryan’s budget plan proposesraising Medicare eligibility age by two months a year starting in 2023, until it reaches 67 by 2034.

Many others looking to keep Medicare solvent have also proposedraising the age of eligibility.

The Congressional Budget Office estimates that raising the minimum age from 65 to 67 would reduce annual federal spending by 5 percent. But it would also result in higher premiums and out-of-pocket costs for seniors who would lose access to Medicare.

Obama’s health care law also adds some benefits for seniors, such as annual wellness visits without co-pays, preventive services like free cancer screenings and prescription drug savings.

Proposed Savings

The Affordable Care Act is projected to reduce Medicare spending by $716 billion over the next 10 years. These reductions, as detailed by Washington Post’s Wonkblog, will come mostly from reducing payments to hospitals, nursing homes and private health care providers.

While Ryan criticized such spending cuts in his speech at the Republican National Convention, his own budget proposed keeping these reductions.

“The ACA grows the trust fund by giving more general revenue to the Treasury, which then gives the trust fund bonds. But it then uses the money from those bonds to expand coverage for low- and middle-income people,” explains Dylan Matthews on Washington Post’s Wonkblog.

Romney hasn’t really come up with a solid answer: he previously said he would restore the $716 billion savings that the health care law imposes. Per this New York Times story, the American Institutes for Research calculates this would increase premiums and co-payments for Medicare beneficiaries by $342 a year on average over the next 10 years.

For more on where the candidates stand on the $716 billion, the private health policy Commonwealth Fund offers this helpful explanation.

Caps on Spending

Both Obama and Ryan have set an identical target rate that would cap Medicare spending at one-half a percentage point above the nation’s gross domestic product.

But they have different ideas on mechanisms to achieve it.

The Affordable Care Act establishes a 15-member Independent Payment Advisory Board that, starting in 2015, would make binding recommendations to reduce spending rates. As Jonathan Cohn points out in the New Republic, the commission is prohibited from making any changes that would affect beneficiaries.

Ryan has proposed hard caps on spending and derided this panel of appointed members as “unelected, unaccountable bureaucrats.” When laying out his plan in a 2011 memo, Ryan wrote that to control spending, “Congress would be required to intervene and could implement policies that change provider reimbursements, program overhead, and means-tested premiums.”

Romney hasn’t stated clear proposals for imposing a cap on spending.


Big Picture

Though, it’s far less discussed on the campaign trail, Medicaid actually covers more people than Medicare. The joint federal-state insurance program for the poor, the disabled, and elderly individuals in long-term nursing home care currently covers about 60 million Americans.  The Affordable Care Act has expanded Medicaid coverage further. Beginning 2014, Medicaid will include people under 65 with income below 133 percent of the federal poverty level (roughly $15,000 for an individual, $30,000 for a family of four). This was estimated to cover an additional 17 million Americans as eligible beneficiaries.

In June, however, the U.S. Supreme Court ruled that states could opt out of the Medicaid expansion. A ProPublica analysis estimated that the 26 states that challenged the health care law, and thus may possibly opt out, would account for up to 8.5 million of those new beneficiaries.

Romney and Ryan would overhaul this current system by turning Medicaid into a system of block grants: the federal government would issue lump sum payments to the states, who would determine eligibility criteria and benefits for enrollees. These grants would begin in 2013.

Effects on spending

The Congressional Budget Office estimates that Medicaid expansion under the new health care law would cost an additional $642 billion over the next 10 years.

Under the Ryan plan, federal Medicaid grants would be adjusted only for inflation, but not health care costs, which grow at a much higher rate. The CBO estimates Ryan’s plan would save the federal government $800 billion over the next 10 years. Another study conducted by Bloomberg News shows that the block-grants could decrease Medicaid funding by as much as $1.26 trillion over the next nine years.

Actual Impact                                                                                                     

The New York Times points out that more than half of Medicaid spending goes toward the elderly and disabled. An Urban Institute analysis estimates the Ryan plan would result in 14 million to 27 million fewer people receiving Medicaid coverage by 2021.

Though rarely mentioned by any of the candidates, Medicaid costs are soaring to cover the elderly who require long-term nursing care. As the Times’ details how, states saddled by high Medicaid costs have begun turning to private managed care plans to blunt the cost.

clarence swinney

Sep. 14, 2012, 2:07 p.m.

Continental Resources CEO and Romney adviser testified in Congress to preserve the oil industry billions in tax breaks. He said “Continental’s effective tax rate is 38%”
Continental paid 2.2% tax rate over five years. It has paid as low s 0.1% in the the past 5 years.
Over those 5 years it had pretax profits of $1.872 Billion and paid $40 million in taxes.
The two most profitable oil companies pay less taxes than the average American. 9-12

How low will they get for the almighty $$$$$$$$?

Romney will repeal Obamacare?
Congress says what?

gintaras gircys

Sep. 14, 2012, 2:19 p.m.

Pass a transaction tax on Wall St.

I only see two candidates here. Lazy, slopping reporting.

Cynthia Bauman

Sep. 14, 2012, 2:40 p.m.

I think it is about time we do away with the tax sheltered part of health insurance premiums that an employee pays.  The amount that the employee loses from his net pay is small but put all these small amounts together and they could help make medicare financially solvent for a longer period.  These tax sheltered amounts are never recovered as the tax sheltered amounts for retirement savings.  I am now paying taxes on the retirement withdrawals; but I will never pay taxes on the tax sheltered health insurance payments.

Andrew Ray Gorman

Sep. 14, 2012, 2:51 p.m.

Why are only Obama and Romney’s positions mentioned? Both Jill Stein and Gary Johnson have qualified for federal funds, and together draw in 6 percent of the registered voter support.

Daniel Robert Snodgrass

Sep. 14, 2012, 3:33 p.m.

“In the current system, people 65 and over are eligible for Medicare, which Obama has said he would keep for now.”

In the current system, people under age 65 living with disabilities who were fortunate enough to earn a living wage are also eligible for Medicare, myself included.

When they talk about appointed pannels to decide seniors health care choices, that scares me. Just look at the Crooks appointed to the Supreme Court. And we can not get rid of them!!!! Look at some of the obviously purchsed decisions they have handed down. Do you really want a “Citizens United” type decision handed down, that will distroy your healthcare choices, like we have had our election process distroyed. That is EXACTLY what will happen, that is my fear.

Bill Scherzer

Sep. 15, 2012, 1:45 a.m.

“mainly by imposing tighter spending controls on Medicare payments to private insurers and hospitals.”  We just lost our second rheumatologist in 9 months because Medicaid does not pay but a little over 50% of the costs now and doctors have to pay one person working almost full time to keep up all the red tape needed to get paid that.  There is a already waiting lists of over 3 months just to get an appointment with a specialist because the number of patients per doctor is growing exponentially.

The damages already been done by the ACA are almost unrecoverable.  A LARGE number of doc tors have chosen to retire than face the increased tax burden, drop in wages and increased workload.  We have the lowest number of new students going into the health field in generations.  Even the foreign medical professionals that were arriving daily has had a sharp decline because of the decline in potential and the increase of restrictions being imposed by this administration. 

Repealing the Obamacare “TAX” and restructuring the healthcare system in an intelligent and TRANSPARENT manner is a neccessity.

The medical and drug industry has figured out how to fleece the savings away from the elderly. Drug them and shut them up as they pick the pockets of them their children and government.

Fact is everyone dies. Those with poor health habits die sooner. Why punish healthy tax payers for the poor behavior of others?

Get the government out of health care, education and welfare and let the cards fall where people are responsible. It is the holding companies and banks that call the shots not the voter.

clarence swinney

Sep. 15, 2012, 3:56 p.m.

Huh! Census Bureau says try $50,000.  Crazy stuff.

To Darwyyn Deyo and Andrew Ray Gorman;

Agreed. I wrote to ProPublica staff yesterday asking why they only consider two candidates on this issue (of course, everyone knows why - those candidates’ parties control the media.) I’m disappointed that ProPublica limited this discussion.

Perhaps if enough of us demand broader coverage of ballot qualfied candidates we’ll see more balanced coverage as well.

You completely misrepresent the Obama administration’s position on Medicare. HHS has approved 18 states to INVOLUNTARILY transfer 2 million of the poorest Medicare recipients into PRIVATE managed care plans.

Shame on your tilted shoddy reporting.

clarence swinney

Sep. 16, 2012, 10:38 a.m.

Since 1980. Tax Code. Reagan gave top 10% a 60% tax cut.
Bush huge tax cut was 37.6% to top 1% and 48.3% to top 5%.
Bottom 60% got 16.4%
10% own us———73% net wealth—83% financial wealth—get 50% individual income and 70,000,000 workers get 14% or less.
America is in big trouble. Off shoring job biggest problem. Entire Industries gone forever. Wall Streeters get richer.
What industry will save Alamance County.  Same in all 100 counties. Loss of mfg jobs.
No safety nets and what would happen?
We must go to 1945-1980 Tax. 50% on top incomes and estates. Raise minimum wage.
Demand fair wages and cut huge pay and bonuses for CEOs and staff.. a MUST.

lets throw the poor under the bus is what i hear from the repubs. not sure whaat the pres is doing….

David McClurkin

Sep. 17, 2012, 7:45 a.m.

Medical care can be expensive beyond belief and so is the usual insurance written to cover it.  Only a large pool of subscribers can spread the medical costs enough to have the insurance support “affordable care.”  But doesn’t this otherwise comprehensive article miss the real problem?

That problem is the uncontrolled growth over the years in the costs of the medical and related services themselves.  More than 18% of our country’s GDP goes for health care, not including prescription drugs and insurance premiums.  This share of our economy totals more than is spent for all state and local governments and all defense-related costs combined.  Think about that. That is over $ 2.7 Trillion a year.

Why is seemingly nothing being done to actually reduce the huge cost burden placed on the economy by such extreme medical and related costs?  Can’t we do better?  I would like to hear what the candidates have to say about actually reducing what health care costs - not just all the fighting over who will pay for it.

There’s actually a bigger flaw in the article (or the candidates, if you want to play it that way), which is that the candidates have NO position on “health care.”  They have positions on health INSURANCE.  Those aren’t the same thing.

A health care debate should be about access to and quality of care.  It’d talk about problems like overworked doctors making bad diagnoses, licensing requirements that stifle competition, and pharmaceutical companies pushing dangerous drugs on the market because the patents on the better stuff expired.  It might also talk about educating doctors on helping patients with choices and educating patients on making better choices.

By contrast, a health insurance debate is about how many young people should be obligated to pay for a service they’re not likely to use (violet’s “thrown under a bus” metaphor might be apt) in order to maintain industry profits.  And when the profits aren’t high enough, health insurance debates turn to who can be deprived of health care most conveniently and which obese bureaucracy (government or corporate) should take credit for such a budgetary success.

David is on the right path.  Health care is expensive because the number of doctors per area is restricted by the AMA’s cartel.  And prices go up from there because employer-provided insurance makes it an invisible expense to most people, so why not get the extra five tests?

Yet, breaking your arm will set you back twelve thousand dollars (or did, a few years back), which is treated by basically strapping your arm to a stick and recommending some aspirin, something a local Boy Scout would probably do for you for the price of the stick.

(Don’t believe for a minute that malpractice insurance is the “real” reason.  That’s called “blaming the victim.”  There are cases where doctors amputate the wrong limb, and the doctor thinks that should have a maximum damage value.)

clarence swinney

Sep. 17, 2012, 9:55 a.m.

Fannie and Freddie were placed in Conservatorship in 2008 by Paulson.
All toxic home loans were pre-2008 Crash.
NY Times wrote regulations were too tough.
F&F were allowed to continue buying housing derivatives.
F&F had caps on home loans they could buy. 1980=$93,759—1988-$153,100—2002—$300,000-
2008-$729,750. This allowed banks to dump toxics on F&F.

There was little supervision on F&F. They bought home mortgages from the banks then resold them to investors. They never created a mortgage. They bought them. The bigger the loan the bigger the profit. We built homes too large—too expensive for declining middle class incomes.

They were sold worldwide as Triple AAA but were toxics. Over one half the mortgages were by private lenders. Banks were begging for mortgages they bundled into Derivatives and sold worldwide. Much fraud permeated the entire system. Millions of foreclosures hurt millions of families. It created the Great Recession from which we will suffer for years.

David McClurkin

Sep. 17, 2012, 9:58 a.m.

“Affordable Care” seems more and more to be an oxymoron. Perhaps alternatives to medicine/medical solutions to human needs is worth more attention.  If medicine/medical is the only solution, then it is a monopoly and governmental and individual roles should be to approach the problem as managing a monopoly. Perhaps there are some “good” monopolies. Can someone help us out here?

“Lower premium costs due to competition” seems to be a theme. What’s needed is some competition in the healing business itself.  For starters, more healthful living habits goes a long way. Couldn’t we all do things to lower our risk of health problems? Is there a practice out there that would “keep you healthy, whatever comes your way” if you paid them a fixed annual amount and followed their requirements for healthful living?  Other ideas, please.

All I know is the last things a Republican did that were truly designed to help the American people over the long term was the ending of the Viet Nam war in 1972 and the Clean Air Act in 1970.  Since then, it has been a steady litany of Republican “Trust us!  We promise!” as the United States of America and the American way of living goes down the tubes under the weight of their greed.

Be foolish to trust ‘em on this.  One thing I would feel comfortable betting on:  Your premium payments will somehow flood up faster and faster, while ever less in the way of health care will trickle down. 

That sort of thing has become a Republican habit.

David, it’s a little bit outdated and not designed for our culture, but check out the “Barefoot Doctor” programs, starting with the original one in China.  As I recall, it was based on the premise that only about a tenth of medical issues actually need a doctor, so a nurse’s training should be sufficient for the majority.  India went a step further, with a “Barefoot Nurse” program (which I can’t find evidence of on the Internet, so maybe they called it something else), on the premise that their ratio was about one percent, with a tenth being what a nurse needed to handle.

Without the AMA blocking any attempt to undermine their status, something like (but not exactly) EMT training could take the burden off the hospitals and private practices by having a few people in every neighborhood who can deal with anything that doesn’t require a heap of money for equipment…like a sterile operating room—that’s not something your neighbor is likely to have handy.

That leaves the medical school graduates in a position where they can actually care for their more serious patients, rather than removing the wrong lung because they spent the morning hassled with hypochondriac patients giving the nurses a hard time.

Add in a database of complaints (which our practitioner would be obligated to respond to, so that we can all publicly see the conversation), and that should allow the best trainees to rise to the top while the worst go out of business.

I know this is a difficult subject with the Romney campaign in particular issuing contradictory statements but this is not up to your usual standards.

clarence swinney

Sep. 18, 2012, 9:08 a.m.

Anti-Poor=Anti Christ
Pro Rich=Anti Christ
Swords into nukes=Anti Christ
Romney:”My first act will be to defund Planned Parenthood.”
PP prevents more abortions than any unit in America
So call Mitt “King Of Abortions”
PP gives preventative health care to millions of poor women
Romney:”My first act will be to Repeal Obamacare” which Aids millions of the poor get preventative health care. Plus, it is same As Romneycare in Mass!! Hypocrite?

Mitt is anti Food stamps—Anti Christ
Mitt is anti Medicaid—-Anti Christ

Mitt is for the Rich and against the poor and middle class

A vote for Mitt is a Vote against Jesus Christ
Do you hear me Pastors of America?????

A few Mormon Leadership quotes:

“There is no salvation without accepting Joseph Smith” Doctrine of Salvation Vol 1, page 190
“A more ignorant people never lived than the present so-called Christian world”. Brigham Young. Journal of Discourses 8:199
“The Christian world, so called, are heathens as to the knowledge of the salvation of God.”
Brigham Young, Journal of Discourses 8:171

clarence swinney

Sep. 18, 2012, 2:38 p.m.

“There are 47 percent of the people who will vote for the president no matter what. There are 47% of them who are dependent upon government, who believe they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, you-name-it and the government should give it to them. These are people who pay no income tax.” That was Mitt Romney swan song bye bye election. He attacked 50% of those who are working poor and pay full payroll tax. He did not mention his thousands of rich pals who pay no income tax and who pay 1% or less in payroll tax. He did not mention corporations like Verizon with 6 Billion income in 2011 and paid no tax. Or GE over 5 years paid 2.3% on profit of 81 Billion. Or that we rank ahead of only Chile and Mexico As Least taxed in Oecd nations. Or that 1% pay 28% of total income in Federal-State-Local taxes as a percent of gdp and middle class pay 27%. MITT IS GONE. A RICH NUT.


Hardly. Something as financially complex as Medicare and Medicaid would require high level financial/economic math skills.

How many reporters have those skills?

“Your objectivity is subjective”—Woody Allen.

@Urko:  It would have been kind - perhaps even uplifting; perhaps, even, revolutionary - of you to season your disparagement of a ProPublica article with at least a sprinkling of the “facts” whose omissions you decry.

If only to benefit this particular particularly ignorant reader.

Get Updates

Our Hottest Stories