‘Obamacare’ Cuts $306 Billion From Medicare Advantage

Healthcare Policy

(VIDEO: barrossowyo)

EDITOR’S NOTE: An editorial in the Wall Street Journal yesterday warns the administration against implementing the Medicare Advantage (MA) budget cuts that are part of the Patient Protection and Affordable Care Act (PPACA). The $306 billion slated to be taken out of MA, a popular private insurance alternative to traditional Medicare that offers more flexibility than the standard federal Medicare plan, represents a seven to eight percent cut of a program that nearly one in three seniors use to enhance and customize their coverage plans.

MA coverage is offered by more than 3,000 private plans and serves nearly 12 million beneficiaries, of which approximately 40,000 live in Brevard County. The WSJ editorial excerpted below cautions that because of the “Obamacare” MA funding cuts, seniors enrolled in MA are highly likely to see less choice, lower benefits and higher premiums, and, with the Health and Human Service (HHS) payment cuts into Medicare Advantage scheduled to be finalized in the coming days, calls for swift action to prevent implementation of these cuts.

An article on SpaceCoastDaily in April of last year probed the political dynamics associated with the administration’s use of a very costly and ineffective MA quality pilot project to appease the 12 million seniors, at the time a formidable block of swing voters enrolled in and very satisfied with their MA plans, to carry through the seven months prior to the election (see VIDEO above). With the election now in the distant past and PPACA implementation looming, those 12 million very satisfied MA enrollees may be in for a very rude awakening.  

WSJ.COM–President Obama often claims he wants to cut the budget smartly, using a “scalpel”—not a meat axe, machete, cleaver or chainsaw, to list a few of his favorite metaphors. He’ll need a more inspired term to describe what he’s now doing to Medicare Advantage, perhaps napalm or WMD.

‘Obamacare’ cuts $306 billion from the very popular Medicare Advantage program that insures 12 million seniors nationwide, and over 40,000 in Brevard County.

The Affordable Care Act drained $306 billion from this growing version of Medicare that 29% of seniors use to escape the traditional entitlement and obtain modern private insurance, but the Administration is imposing the cuts in ways that are even more harmful than the law requires. The post-election timing is no accident.

In 2012 only 4% of the Medicare Advantage cuts were scheduled under the law, but the folks who run Medicare at the Health and Human Services Department improvised a $3.8 billion nationwide “demonstration project” that paid bonus subsidies to Medicare Advantage insurers to improve quality. The project couldn’t demonstrate anything because the payments went to 90% of insurers regardless of quality, but they did cancel out most of the 2012 cuts. That did the trick for voters in Scottsdale or Boca Raton who might have noticed higher costs or lost the coverage they have and prefer.

CLICK HERE to read the editorial in its entirety on WSJ.com.