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August 8, 2011

Johanns Demands Clarification of Conflicting Comments on Medicare

WASHINGTON – U.S. Sen. Mike Johanns (R-Neb.) today sent a follow-up letter to two Obama Administration officials reiterating a request to clarify their conflicting statements on the fiscal impact the new health care law will have on Medicare. In May, Treasury Secretary Timothy Geithner spoke favorably of the law's impact, while the Administration's Medicare Actuary, Richard Foster, contradicted this statement. Shortly thereafter, Johanns and 36 of his Senate colleagues requested an explanation within 14 days; it has now been 81.

"The lack of transparency and accountability from the Administration on Medicare's fiscal health has been very disheartening, and our seniors deserve the truth," Johanns said. "Two prominent Administration officials have painted two very different pictures, and they've both been silent since we first asked for an explanation of their contradictory statements nearly three months ago. Further stalling and delay is unacceptable. Our seniors deserve to know the truth about Medicare, and they deserve it now."

Following a May report on Medicare and Social Security, Treasury Secretary Geithner stated the new health care law will "significantly strengthen Medicare's finances and extend the life of the Medicare Trust Fund." This assertion has been called into question by many experts due to the fact that the law cuts $500 billion from Medicare, and uses it to finance other entitlements within the law.

One such expert is Dr. Foster, Actuary for the Administration's Center for Medicare and Medicaid Services, who stated, "In practice, the improved Part A financing cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions under the [health care law]) and to extend the trust fund, despite the appearance of this result from the respective accounting conventions."

A copy of Johanns' May letter can be found here; today's follow-up letter is here.

The Trustees' report can be found here.

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