Does the AARP claim Romney’s plan would ‘undermine Medicare’?

Obama campaign video:  “AARP says (Romney’s plan) ‘would undermine … Medicare.'”

 

Overview

An October 9 Obama campaign video presents the AARP as saying the Romney/Ryan premium support “voucher” system “would undermine … Medicare.”

 

The Facts

The campaign video makes a series of claims about the Romney “voucher system” proposal before using a partial quotation from the AARP.  The quotation apparently comes from a letter AARP CEO A. Barry Rand sent to members of Congress.  Rand’s letter raises AARP’s concerns about the House Concurrent Resolution for Fiscal Year (FY) 2013, in other words the Ryan budget plan.

Rand (bold emphasis added):

 

The premium support method described in the proposal – unlike private plan options that currently exist in Medicare — would likely  “price out” traditional Medicare as a viable option, thus rendering the choice of traditional Medicare as a false promise. The proposal also leaves open the possibility for private plans to tailor their plans to healthy beneficiaries – again putting traditional Medicare at risk.  The plan fails to realize the negotiating power of Medicare and its impact on lowering costs for the Medicare program – such as in Part D of the program. Converting Medicare to a series of private options would undermine the market power of Medicare and could lead to higher costs for seniors.

 

The video ad obviously uses a short snippet from Rand’s paragraph above and employs an ellipsis to indicate an incomplete quotation.

The raw facts do not make clear whether the ad portrays the AARP claim accurately.

 

Analyzing the rhetoric

With sufficient context, paraphrasing Rand to say the Ryan plan “would undermine Medicare” could fairly represent Rand’s intent in the paragraph.  Given a very charitable interpretation,  the ad’s presentation of the quotation could qualify as true.  However, it seems likely that most viewers would take “would undermine … Medicare” to refer to damaging the system’s foundation rather than to simply changing the purchasing power dynamics.  The ad seems designed to play on the lack of context to exaggerate and change the meaning of Rand’s criticism.

In terms of logic, the ad is well suited to producing a conclusion based on the fallacy of ambiguity.  Since it isn’t clear what aspect of Medicare the Romney plan would supposedly undermine, the viewer can easily assume the worst.

A more insidious aspect of the ad comes from its appeal to authority.  The AARP, based on its name, should serve as a sincere advocate for retired persons.  Yet the letter from its CEO scarcely makes sense.  The reforms in the budget resolution for premium support payments are modeled after the Medicare Part D program that Rand praised in the same paragraph.

Peter Ferrara of the conservative Heartland Institute, writing for Forbes:

 

Medicare Part D is the prescription drug program.  Just like Ryan’s proposed Medicare reforms, Part D provides premium support payments to seniors, which they use to purchase the private prescription drug coverage of their choice.  Because of the private market competition, and incentives for seniors to choose lower cost plans, Part D costs have run 40% below projections.  Compare that to Parts A and B, which by 1990 cost 10 times the original projections for that year when the program was adopted.

 

If Rand likes the market power of Medicare Part D then what is the real basis for his opposition to Ryan’s reform proposals?

Note also testimony before the House Budget Committee in Feb. 2012, featuring Rep. Ryan and Chief Actuary for the Centers for Medicare and Medicaid Services Richard S. Foster:

 

HBC CHAIRMAN RYAN: As you may know, I’ve been working across the aisle with a member of the Oregon delegation from the Senate on a premium support plan that uses competitive bidding to help determine the contribution. Competitive bidding we’ve seen has worked well in Medicare Part D and Medicare Advantage.  I’d like to get your thoughts on choice and competition as it relates to these previous successful reform plans. Given what we’ve seen in these aspects of Medicare, do you believe that competitive bidding is a process that can be successfully applied Medicare-wide?

CMS CHIEF ACTUARY FOSTER: Yes, I think it can. Obviously, it would represent a large change from the status quo, but I think it could work. We’ve seen the signs of this – you mentioned the Part D prescription drug program, for example, where the different drug plans compete against each other on the quality of their benefit package and the premium level. And we’ve seen – every year since Part D started – a migration of beneficiaries to more efficient plans with lower premiums. So that can help. We’ve also seen for durable medical equipment that competitive bidding, in this particular area of Fee-For-Service Medicare, reduced prices that we had to pay by 40 percent.

 

Given that Rep. Ryan specifically likened his reform plan to the structure of Medicare Part D, what can explain AARP’s CEO using Medicare Part D as an example of bargaining power the system will lose under Ryan’s plan?

The Obama campaign ad uses unclear language to mislead its audience and relies on a very dubious appeal to authority.  The likely source of the quotation used in the ad does claim that the Ryan plan would eliminate some of the bargaining power of Medicare, but that argument is incoherent for the reasons discussed above.

 

References

Obama campaign video “Earned,” YouTube, accessed Oct 10, 2012 at 4:50 a.m.

March 21, 2012 letter to Congress from A. Barry Rand

“Why Senior Citizens Should Prefer Ryan’s Medicare Plan to Obama’s” by Peter Ferrara, Forbes.com, accessed Oct. 10, 2012 at 5:00 a.m.

YouTube video of Richard S. Foster’s Feb. 2012 testimony before the House Budget Committee

Transcript of Richard S. Foster’s Feb. 2012 testimony before the House Budget Committee, website of the House Committee on the Budget, accessed on Oct. 10, 2012 at 1:00 p.m.