In another gross distortion of the truth, the Romney-Ryan team asserts that President Obama has reduced Medicare benefits by $500 billion (over a 10-year period). In truth, not a single benefit dollar was taken from Medicare benefits. Rather the money was taken from private sector providers of Medicare Advantage. Seemingly, another $216 billion will be saved over a 10-year period by not paying hospitals that provide substandard treatment to Medicare recipients, bringing the total savings to $716 billion.
During the George W. Bush administration it was believed that the private sector could provide Medicare benefits cheaper than the government. Hence, the implementation of the private sector Medicare Advantage plan. It was subsequently determined that the Medicare Advantage program cost substantially more than the traditional Medicare plan which encompassed 80 percent of all Medicare recipients.
Currently, the costly private sector Medicare Advantage will be phased out. As a result, all Medicare recipients will receive the same benefits provided by traditional Medicare. The total $716 billion savings will be used to close the "donut hole" in the Medicare prescription program, and to extend the viability of Medicare by approximately eight years.