Obama says the health-care law will help rein in Medicare spending. It creates an independent board that will make suggestions on cutting payments to providers if the program grows too fast. The board won’t be allowed to raise premiums or reduce benefits.
The law also creates incentives for doctors, hospitals and other providers to coordinate care and emphasize prevention in an effort to lower costs and improve quality.
Overall, the law is expected to reduce Medicare spending by $716 billion over 10 years by cutting back on payments to providers and Medicare Advantage plans. The savings, while helping to fund the coverage expansion, also would extend the solvency of Medicare’s hospital trust fund through 2024.
During failed budget negotiations with Republicans in 2011, Obama reportedly considered raising the eligibility age for Medicare from 65 to 67. But he has never publicly supported the idea.
In his latest budget, Obama proposed cutting $188 billion from Medicare over 10 years, mainly by requiring drug companies to provide larger rebates to the government.
Romney says Medicare’s growth must be slowed to bring the federal budget deficit under control. He argues that the open-ended entitlement program should be replaced with “a competitive, market-oriented” approach. He wants to transform Medicare into a “premium-support” program that would give seniors a fixed payment to buy private coverage or a government plan similar to what exists now.
If seniors bought a more expensive plan, they would have to pay the difference between the fixed amount they receive and the premium; if they bought a cheaper plan, they could keep the difference. Romney hasn’t said how the amount of the fixed payment would be adjusted annually as health-care costs rise.
He has said he would leave the program untouched for people older than 55. If the health-care law were repealed and the $716 billion restored, however, today’s Medicare beneficiaries would face higher premiums in addition to greater out-of-pocket costs for drugs and preventive care.
Romney has suggested other changes to keep the program solvent.
“What I do in my Medicare plan for younger people coming along is say this: We’re going to have higher benefits for low-income people and lower benefits for high-income people,” he said in a recent “60 Minutes” interview.
Obama staunchly opposes Romney’s proposal to turn Medicaid into a block grant that probably would offer states less federal money in exchange for more freedom in how they spend it.
He argues that Medicaid provides a key safety net, a position that’s consistent with the health-care law’s broad expansion of the program.
But he hasn’t opposed all Medicaid money-saving efforts. During the 2011 budget negotiations with Republicans, he suggested reducing the federal contribution to the program by tens of billions of dollars over 10 years by changing the way the federal government pays states.
After an outcry from liberal groups, Obama scaled back the idea. He included a version in his proposed budget for fiscal 2013 that would reduce federal spending on Medicaid by less than 1 percent.
Romney has proposed a major change to this government entitlement program that provides health insurance to the poor and disabled.
Currently, the program is funded by the federal and state governments, and anyone who meets federal eligibility requirements — or state standards, if those are more generous — may enroll. Under Romney’s plan, however, states would receive set amounts, or block grants, from the federal government to disburse largely as they wish.
Conservatives, who have long supported Medicaid block grants, say the approach would not only save taxpayers money but also encourage states to innovate and tailor their programs to the unique needs of their populations.
Romney has said he would hold Medicaid growth to the rate of inflation plus one percentage point, a spending slowdown that he says would save the country $100 billion a year.
Obama is a strong supporter of abortion rights. If a Supreme Court vacancy were to come up during a second term, he would be likely to appoint a justice he believed would be sympathetic to upholding Roe v. Wade, the decision that legalized abortion nationwide.
He is a proponent of Planned Parenthood, and has moved to block efforts by some in Congress and legislatures in states such as Indiana and Texas to ban Planned Parenthood and other abortion providers from receiving federal Medicaid funding.
Planned Parenthood uses the money to provide health screenings such as mammograms; by law, the group cannot use federal funding for abortions.