Medicare is not going bankrupt

Trudy Lieberman at the Columbia Journalism Review points out that CNN actually did the fact-checking that no other news org is doing on Medicare:

Hooray for, for fact checking the often-heard claim of Medicare’s “impending” bankruptcy. CNN’s contribution sets a high bar, and the network also distinguishes itself from the over-the-top fact checking that has cropped up lately, as pointed out recently by my colleague Brendan Nyhan.

The “bankruptcy” language comes up a lot. In his convention speech last week, for example, former president Bill Clinton declared that Mitt Romney’s goal to repeal the Affordable Care Act (ACA), presumably along with its provisions that prolong the Medicare Hospital Trust Fund, would make “Medicare go broke in 2016.” And on Thursday, vice president Joe Biden said that Romney’s plan “would cause Medicare to go bankrupt by 2016.”

The word “bankrupt” is high on Romney’s list of talking points, too. A Romney spokesperson told CNN, when it asked for a response to Clinton’s charges, “Medicare will go bankrupt in 2024.” That’s when Medicare trustees now say the hospital trust fund will have a money shortfall.

But is Medicare really going bankrupt? Definitely not, says CNN. The network is correct, and the point is crucial.

How did CNN pull away from the fact-checking pack on this one? It did some old-fashioned reporting, read some financial reports, and found sources that could really give the financial skinny on Medicare. And it didn’t go for that “mostly true” or “partly misleading” stuff that some other fact checking pieces resort to, which can confuse readers more than it enlightens them.

First, CNN reported, as CJR has urged news outlets to do, that only one part of Medicare is in potential trouble—the Hospital Trust Fund, which is financed by payroll taxes. The other parts of Medicare, including Part B, which finances doctor visits, lab tests, and outpatient services, “are adequately financed for now,” Medicare trustees have said. CNN made that clear to readers.

CNN pushed further and asked a logical question that most reporters writing about Medicare have missed. When the magic date for “bankruptcy” arrives—2024 according to the Dems, or 2016 if the ACA disappears in a Romney presidency—would Medicare really disappear? Jonathan Oberlander, a health policy expert at the University of North Carolina, told CNN that repealing the health reform law “would in fact worsen Medicare’s financial condition,” but even so, he added, “Medicare is not going bankrupt. Medicare would still have most of the necessary funds to pay those expenses and other parts of the program would be unaffected. Medicare won’t go bankrupt in the literal sense in 2016 or 2024 or 2064—or ever.” The Centers for Medicare and Medicaid Services, which runs the Medicare program, said this year that even in 2024 the Medicare hospital trust fund could still pay 87 percent of its estimated expenditures, and noted that, “in practice, Congress has never allowed a Medicare trust fund to exhaust its assets.”

Historical context is often lacking in fact-checking attempts, though the past may be prologue. CNN reached back to some Medicare history, and others should, too. The Congressional Research Service, a neutral source, and the Center for Budget and Policy Priorities, a group that skews left of center on some issues, both have reports that place the bankruptcy claim in historical context. For four decades, both reports note, Medicare trustees have warned of insolvency, and it has never happened.

That’s not to say that Medicare’s cost explosion is not a problem. How to control cost—not just for Medicare but for al the rest of the healthcare system, too—is a central issuethat the press needs to clarify. It’s the elephant in the room.

So should voters be worried? Not about bankruptcy, as CNN so ably pointed out. But they need to understand what changes have already been made to Medicare, and what changes could occur if Romney were elected and Medicare were transformed from social insurance into a privatized system.

One thought on “Medicare is not going bankrupt

  1. Control the cost of Medicare and the system will go on forever. Step number one: take the profit motive out of health care. Sorry insurance company employees you’ll just need to find other jobs. Perhaps as caregivers? And you doctors will have to forego that second Benz along with that second home in Aspen. Let’s don’t forget about the bloodsuckers who own the hospitals. You’ll all be required to find honest work in the future.

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