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Medicare has been front and center in the media and on the campaign trails this week. As part of our Medicare Truth Squad efforts to debunk myths and claims about the Medicare program, today we focus our attention on a pervasive myth that keeps going around.

Some policymakers, candidates, and members of the media have been touting the claim that the Affordable Care Act (ACA) cuts $700 billion from Medicare. You may have even started receiving robo-calls that repeat this point. These claims are simply untrue.

What the ACA Really Does for Medicare

The Affordable Care Act achieves savings in the Medicare program through a series of payment reforms, service delivery innovations, and increased efforts to reduce fraud, waste, and abuse. The actual projected reduction in Medicare spending is largely a result of reducing overpayments to private Medicare plans that have been paid more than traditional Medicare but do not perform any better.  In fact, according the GAO, saving on wasteful overpayments now means there will more future funds for legitimate coverage.[1]

Besides reducing fraud and saving taxpayer dollars on excessive overpayments to private insurance companies, the Affordable Care Act has already made, and will continue to make, improvements to Medicare.[2]  In fact, people with Medicare are already seeing real savings – an average of over $800 per person on their drug costs this year alone.

The bottom line: ACA preserves every cent of Medicare's guaranteed benefits AND makes improvements to the program.

Ryan Budget Slashes Benefits

A prominent plan touted as the alternative to the Affordable Care Act is the budget proposal put forward by Congressman and Vice-Presidential candidate Paul Ryan. However, Mr. Ryan's budget proposal for the past two years has included the same $700 billion reduction in Medicare spending as in the ACA.[3] The Ryan plan, however, ends Medicare's guaranteed benefit design and turns the community program into a system of vouchers, leaving millions of beneficiaries in the hands of private insurance companies, with no guarantee of the coverage they need. The Ryan plan does NOT save money for people with Medicare, it doesn't save the Medicare program, and it does not help solve the nation's deficit.[4]

When you hear the $700 billion myth, push back with facts.

For more Medicare Facts and Fiction, see:


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