Wednesday, September 05, 2012

Ezra Klein wrong on Health Care Financing

Omigod Sept 4 2012 really is opposites day.  Ezra Klein made an incorrect claim of fact about health care financing.  He wrote

But I’m not going to make that argument. I’m on-record saying that trust-fund accounting is by and large a ridiculous way to look at the federal government’s finances, but both parties do it, and so Ryan isn’t committing any foul here. And within the trust-fund accounting rules, Obama is using his Medicare cuts to pay for the Affordable Care Act and Ryan is using his Medicare cuts to finance the Medicare program in the future.

My amazed comment follows.

I agree that trust fund accounting is absurd, but your trust fund accounting is totally wrong.  The balance of the Medicare plan A trust fund would be identical under the ACA and the Ryan budget.  There is just no difference at all.  The ACA did not take any money out of the Medicare trust fund to pay for anything.  That's why it extended the forecast time till the fund is empty by 8 years.

The ACA spending increases are, by trust fund accounting (which I agree is nonsense) separate from the Medicare spending cuts (and the Medicare tax increases).  The effect on the deficit is the sum.  The Medicaid expansion and the subsidies for insurance bought on exchanges are not at all funded by any money which would otherwise be in the Medicare plan A trust fund.

Amazingly uber wonk Ezra Klein is just wrong on a health care financing fact (a meaningless one I agree but you are just wrong).

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