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U.S. Chamber of Commerce

stated on May 9, 2012 in a TV ad:

"Seniors will see $500 billion in Medicare cuts to fund Obamacare."

By Aaron Sharockman May 15, 2012

Chamber says Bill Nelson voted to cut Medicare $500 billion

The U.S. Chamber of Commerce is going after Sen. Bill Nelson’s vote in favor of the federal health care law, saying in a new television ad that the law will "be a nightmare for Florida seniors."

The ad includes a statement from Nelson supporting the health care law but interrupts Nelson to suggest his statement is inaccurate. (Watch it here.)

The narrator in the ad, among other things, says that "seniors will see $500 billion in Medicare cuts to fund Obamacare."

That’s what we’re fact-checking here -- and have fact-checked many times before.

By way of introduction, Medicare serves as the health insurance program for 39 million seniors and another eight million people under 65 receiving Social Security. Medicare makes up about 12 percent of the federal budget. Medicare reforms were part of the 2010 health care legislation.

Some of the changes included in the health care law increase Medicare spending to improve benefits and coverage, said Tricia Neuman, who is vice president and director of the Medicare Policy Project at the Kaiser Family Foundation -- a trusted independent source. For instance, the health care law adds $5 billion to help cover prevention services and $43 billion to help fill in a gap for enrollees purchasing prescription drugs through the Medicare Part D program (sometimes called the doughnut hole).

Other changes reduce the growth in Medicare spending to help the program operate more efficiently and help pay for coverage expansions to the uninsured in the underlying health reform legislation, Neuman said. And yet other provisions are designed to improve the delivery and quality of care. (Neuman explains the changes in an easily digestible tutorial on the Kaiser Family Foundation's website. It's the best non-ideological explanation we've seen.)

The key to this claim is the fact that the health care law does not take $500 billion out of the current Medicare budget. Rather, the bill attempts to slow the program's future growth, curtailing just over $500 billion in future spending increases over the next 10 years.

In fact, Medicare spending will still increase.

The nonpartisan Congressional Budget Office projects Medicare spending will reach $929 billion in 2020, up from $499 billion in actual spending in 2009. So while the health care law reduces the amount of projected spending increases in Medicare, the law doesn't cut Medicare.

Put simpler, Medicare’s budget will continue to grow -- just at a smaller rate than had originally been projected.

The chamber is correct on one point, however: The spending reductions to Medicare are intended to offset, to some extent, the overall cost of the new health care law.

On May 14, 2012, lawyers for Nelson wrote to Florida TV stations asking them not to air the ad because of the Medicare claim.

"Just last Friday, FactCheck.org, a non-partisan, non-profit consumer advocate project with the Annenberg Public Policy Center of the University of Pennsylvania, examined this ad and reported: ‘Chamber Continues To Mislead On Healthcare Law.’ In addition, the Pulitzer Prize-winning, independent non-profit organization PolitiFact has reported a number of times that the claim is ‘false’," lawyers Kendall Coffey and Abigail Parent wrote.

In the past, we’ve rated claims about the $500 billion in "cuts" to Medicare anywhere from Half True to Mostly False to False, depending on how they were worded.

The U.S. Chamber said that "seniors will see $500 billion in Medicare cuts to fund Obamacare." That’s largely incorrect. Medicare spending is still set to increase, just not at as high a rate as originally anticipated. The difference, about $500 billion, is being used to help fund other provisions in the new health care law. That’s the small kernel of truth in this claim, which we rate Mostly False.