Dr. Richard Foglesong

Review of Romney ad "Nothing is Free"

September 6, 2012

Both presidential campaigns accuse the other of trying to gut Medicare. Why?  Because this issue matters so much to retirees, and several battleground states have large elderly populations, among them Florida, Ohio and Pennsylvania.

Today, I "Reality Check" a Romney ad titled, "Nothing is Free." Basically, it says that the Obama healthcare plan imposes high costs upon seniors.

Claim No. 1:  “Obama is raiding $716 billion from Medicare, changing the program forever.”

This statement is highly misleading. True, the Obama plan uses Medicare cuts to help pay for extending coverage to the uninsured.  But the ad fails to mention, first, that these cuts come from payments to health care providers, not from benefits to seniors, and second, that Paul Ryan’s budget plan makes similar cuts, in his case to finance deficit reduction.

Claim No. 2: Obama (or Obamacare) is “taxing wheelchairs and pacemakers.”

This claim too is misleading. To help pay for expanding health insurance, the law taxes medical device makers, not consumers directly as the ad implies. And the Obama administration says wheelchairs will be exempt from the tax under regulations being finalized by the IRS, according to ABC’s Ad Watch.

Claim No. 3: Obamacare would raise taxes on families making less than $120,000 a year.

I rate this claim misleading as well.  What the Supreme Court calls a tax rather than a fine applies only to those who refuse to buy health insurance as the law requires.  True, some people with incomes below $120,000 will pay this tax—if they refuse to comply—but the law grants exemptions for financial hardship, religious beliefs, and membership in American Indian tribes. And the IRS can’t file liens or criminal charges against those who don't pay.

As Factcheck.org has reported, the ad’s claim is based on a 2010 Congressional Budget Office report showing the projected revenue from the law’s penalty for those who don’t purchase health insurance. According to CBO projections,76 percent of taxpayers who will pay the mandate penalties in 2016 will have incomes at or below $120,000 annually. Yet, these penalty payers account for only 46 percent of the mandate penalty revenue, because the penalty amount increases proportionally with income. The law sets the minimum tax at $695 per person in 2016.

In sum, I rate this ad misleading on three counts.  For those concerned about Medicare under either candidate, I urge you to pay close attention, do your own fact checking, and oh yes, be suspicious of what you hear in political ads.