Health reform opponents are trying to put words into the mouth of Health and Human Services Secretary Kathleen Sebelius, claiming she told Congress last week that the Administration was double-counting the Medicare savings in the health reform law. That’s not what she said — and her description of how those funds will be used was absolutely accurate.
Here’s the exchange between Secretary Sebelius and Rep. John Shimkus (R-IL):
Rep. Shimkus: “Are you using it [i.e., the Medicare savings in the Affordable Care Act] to save Medicare or are you using it to fund health care reform? Which one?”
Secretary Sebelius: “Both.”
Rep. Shimkus: “So you’re double-counting.”
Secretary Sebelius didn’t call it “double-counting,” Rep. Shimkus did. Instead, she correctly noted that health reform’s Medicare savings have two separate positive effects — on Medicare’s finances and on the federal budget (i.e., helping offsetting the costs of other health reform provisions). As I explained in January testimony to the House Budget Committee:
There’s no double-counting involved in recognizing that Medicare savings improve the status of both the federal budget and the Medicare trust funds. In the same way, when a baseball player hits a homer, it both adds one run to his team’s score and also improves his batting average. Neither situation involves double-counting.
By the way, CBO accounted for deficit reduction in exactly this way in previous Congresses, under both political parties. For example, the Balanced Budget Act of 1997 and the Deficit Reduction Act of 2005 (both of which were passed by Republican Congresses) included Medicare savings that were counted as both reducing the deficit and also improving the outlook for the Hospital Insurance trust fund. No one raised claims of double-counting when these bills were enacted.
More recently, Republicans — including Speaker John Boehner — have proposed cuts in Social Security benefits, which they say would both extend the life of the Social Security trust fund and reduce the budget deficit.