No, the Senate-Passed Reconciliation Bill Won’t Strip $300 Billion From Medicare

Senate Democrats’ reconciliation invoice “will strip $300 billion from Medicare.”

Advert from the American Prosperity Alliance, posted July 19

As Senate Democrats raced to cross what might be their last piece of main laws earlier than the midterm elections, critics went to the airwaves to blast the proposal as hurting older Individuals who depend on Medicare.

Right here’s the narration of 1 advert, sponsored by a bunch known as the American Prosperity Alliance:

“Greater gasoline costs, greater grocery payments, all the things in the present day is costing an excessive amount of. Now, Congress is contemplating a invoice that may strip $300 billion from Medicare, cash older Individuals depend on for his or her medication, their remedies, their cures. We’re all paying extra in the present day, however stripping $300 billion from Medicare? It’s merely an excessive amount of. So name Congress and inform them to oppose [President Joe] Biden’s reckless spending package deal.”

The advert misleadingly paints what’s extra precisely characterised as practically $300 billion in financial savings for customers and taxpayers.

The American Prosperity Alliance maintains virtually no on-line profile. Its web site supplies solely a hyperlink to the advert, with none figuring out info or pages past the homepage. Once we requested a better-known group with the same title, Individuals for Prosperity, whether or not the American Prosperity Alliance was an affiliate, a spokesperson, Invoice Riggs, mentioned, “That is NOT our advert and we’re not affiliated with this group.” 

The advert echoes a theme seen in different assaults on the Democratic-backed proposal, together with one “The Truth Checker” at The Washington Put up gave three Pinocchios out of 4 in June, that means it accommodates “vital factual error and/or apparent contradictions.” PolitiFact rated the same advert False in July.

The Senate handed the invoice, which incorporates main provisions on local weather change and company taxation, on Aug. 7. The Home is anticipated to approve the measure this week. 

The issue with the advert’s $300 billion declare is it frames the spending decline as hurting older Individuals insured below Medicare. That’s not so.

Fairly, the $300 billion — technically, virtually $288 billion, based on the most recent Congressional Price range Workplace evaluation — stems from a provision within the Democratic invoice that might finish the long-standing bar on Medicare from negotiating with drugmakers over the worth of sure medicines. Not with the ability to negotiate costs has meant that Medicare — the pharmaceutical market’s greatest single purchaser — couldn’t leverage its weight to safe decrease costs for taxpayers.

The invoice is projected to scale back federal spending by virtually $300 billion, however that might replicate authorities financial savings and never profit cuts; Medicare recipients would obtain the identical quantity of medicines.

“In actuality, the invoice’s prescription drug financial savings would save the federal authorities practically $300 billion by 2031 with out reducing advantages,” wrote the Committee for a Accountable Federal Price range, a bunch that favors deficit discount and has been skeptical of a lot of Biden’s legislative efforts, citing their price.

“Decreasing Medicare prices will not be the identical as lowering advantages,” the committee wrote. “Fairly the alternative — many measures to scale back prices for the federal government would scale back prices for people as properly.”

After combining the drug-cost financial savings with the invoice’s different well being care provisions, Medicare beneficiaries would see decreases in premiums and out-of-pocket prices, together with by a $2,000 annual cap on out-of-pocket prices, the committee projected. “Along with saving the federal government practically $300 billion, the [bill] would save American households practically $300 billion extra,” the committee has projected.

Steve Ellis, president of Taxpayers for Widespread Sense, one other group that seeks to maintain deficits low, instructed PolitiFact he agrees that the advert’s portrayal of the invoice is problematic.

“These are financial savings ensuing principally from the federal government negotiating prescription drug costs and limiting drug value will increase to inflation,” Ellis mentioned. “So slightly than taking cash out of Medicare, it’s lowering Medicare prices.”

Our RulingThe American Prosperity Alliance mentioned in an advert that the Senate Democrats’ reconciliation invoice “will strip $300 billion from Medicare.”

The federal authorities would see its outlays diminished by about $300 billion because of a Medicare drug-price negotiation provision. Nevertheless, that discount wouldn’t symbolize cuts to Medicare beneficiaries. Fairly, by leveraging Medicare’s market energy, the federal government would be capable of pay much less to supply the identical medicines.

We price the assertion False.

Sources

American Prosperity Alliance, advert, accessed Aug. 4, 2022

American Prosperity Alliance, homepage, accessed Aug. 5, 2022

Draft of H.R. 5376

Congressional Price range Workplace, “Estimated Budgetary Results of H.R. 5376, the Inflation Discount Act of 2022,” Aug. 3, 2022

Committee for a Accountable Federal Price range, “CBO Estimates Drug Financial savings for Reconciliation,” July 8, 2022

Committee for a Accountable Federal Price range, “IRA Would Decrease Medicare Prices, NOT Minimize Advantages,” Aug. 2, 2022

The Washington Put up, “Democrats, Sinema Attain Deal on Inflation Discount Act, After Key Modifications to Tax Insurance policies,” Aug. 4, 2022

The Washington Put up Truth Checker, “Advert Focusing on Manchin on Prescription Medicine Makes use of Deceptive Math,” June 17, 2022

HuffPost, “Drugmakers Attempt to Scare Seniors in Final-Ditch Effort to Cease Democrats’ Financial Plan,” Aug. 5, 2022

PolitiFact, “Advert Focusing on Manchin, AARP Misses on Medicare Drug Worth Negotiations,” July 25, 2022

E-mail interview with Invoice Riggs, spokesperson for Individuals for Prosperity, Aug. 5, 2022

E-mail interview with Steve Ellis, president of Taxpayers for Widespread Sense, Aug. 5, 2022