Cuts To Medicare Advantage Plans Half Of Amount Expected–Watch For Hypocritical Republican Reaction


One of the ways in which the Affordable Care Act is funded is by reducing subsidies to Medicare Advantage plans which receive more money to care for Medicare beneficiaries than it costs to care for the same patients in the government Medicare program. Republicans have been using this to raise bogus claims of cuts to Medicare patients despite the fact that Republicans have also included similar cuts to Medicare Advantage plans in their budget proposals.

Insurance companies have been predicting cuts of approximately 7 percent. CMS released their calculations today regarding proposed cuts for 2015 (pdf here). The current proposal is for a 3.55% cut in payments to Medicare Advantage plans, about one-half of what they have been projecting.

The Republican Party was already prepared today to use this news to attack the Democrats. They do not explain why it is necessary for private companies, which any Republican believes should be more efficient than a government program, requires more money to care for patients than the government Medicare plan does. Nor do they account for the fact that most Republicans voted for the Ryan budget three years in a row which includes the same cuts to Medicare Advantage plans. Or what about the same Ryan plan which would turn Medicare into a voucher system?

Also don’t expect the Republicans to point out that, while the Affordable Care Act will cut profits to Medicare Advantage plans, it also increases benefits to Medicare patients including phasing out the donut hole for prescription drugs and covering preventative services which were previously not covered.

Cross posted at The Moderate Voice

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  1. 1
    david freeman says:

    Republican hypocrisy has become the norm to the point that hypocrisy seems too mild to describe the situation. Democrats are often guilty of hypocrisy but Republican and hypocrite are nearly synonymous now. we need a better word.

  2. 2
    linda king says:

    One of the things that the Medicare Advantage plans have done is to require copays for preventative services which also treat preexisting conditions — which literally 99% of people with Medicare coverage have.  Thus, they have gotten around the addition of “free” preventive services.

  3. 3
    Ron Chusid says:

    That isn’t really a way around free preventative services, and this is also true of Medicare. If someone has an annual Medicare Wellness exam things are done which previously were not covered by Medicare. However, the annual Wellness exam does not cover treatment of any problems the patient has, and that is charged separately. That component of the charge should be less than a normal office call since some components (such as review of history, basic vital signs) are covered by the Wellness exam.

    This does confuse a lot of people who think there is a “free” office call when they are also being seen to treat a chronic problem. What they get free, which was not covered by Medicare in the past, includes the Wellness portion of the exam, pap smears, Mammograms, prostate screening, and colon cancer screening. Tests such as EKG’s, blood sugar, and lipid panels can also be covered as part of the Wellness exam, but for the majority of patients I see these are already covered because of chronic medical problems. For those without chronic problems, they are covered now when they were not covered before.

    Once again, this is true of both regular Medicare and Medicare Advantage plans.

  4. 4
    David Duff says:

    Slightly off topic but yet more and more employers are cutting staff hours in order to avoid government surcharges if they fail to provide government sponsored  health insurance.  Do I mean those mean, ‘Lord Gradgrind’ company owners?  Er, no, actually, I mean:
    “Cities, counties, public schools and community colleges around the country have limited or reduced the work hours of part-time employees to avoid having to provide them with health insurance under the Affordable Care Act, state and local officials say.”
    My source?  No, not ‘Farx Noos’ but the ‘Noo Yawk Times’, actually, which is so pro-Obamacare they must be weeping over their newsprint!! A commentator on the NYT report adds:
    “As the article notes, public workers are being especially hard hit because municipal employers can’t pass along the increased costs of the insurance mandates to consumers the way private companies can try to do. Instead, they must cut down on the number of those they employ. But rather than reduce the ranks of those public employees getting expensive benefits and pensions that often are far more generous than those received by the taxpayers who pay their salaries, the people losing out in the ObamaCare squeeze are those at the bottom end of the wage scale.”
    Why do I think of my favourite American saying, ‘Never give a sucker an even break’?

  5. 5
    Ron Chusid says:

    The data, such as in the recent CBO report, shows that the Affordable Care Act will reduce unemployment in the private sector.

    The article you cite shows that some people are claiming the problems you mention will occur in the public sector. There is a huge difference between making claims or predictions and what actually occurs. So far all the similar predictions regarding the private sector turned out to be false. Lots of people try to influence journalists to report their position as fact. That does not make it fact.

    Being in The New York Times doesn’t alter the fact that this is not a very credible article. This story just looks like a gullible journalist who doesn’t understand either the underlying economics or the CBO report. The article totally gets what the CBO report actually said wrong, which is largely responsible for the other errors in the story. Any story about effects of mandates is questionable as the employer mandate hasn’t kicked in yet. Often employers are found to be blaming the Affordable Care Act for employment changes which are totally unrelated to Obamacare when the actual situations are studies.

    Health care policy is too complicated for many journalists who also must cover other topics. (I’m sure this is also true in other areas). Maybe the author is correct about government employees (as opposed to private sector employees, where unemployment is expected to decline due to the ACA). I’m sure the author is correct that people are making these claims, but that does not mean they are correct. I would not consider an article which makes such serious errors about the CBO report to be a credible source. This will have to be examined by impartial economists who actually understand the ACA, the CBO report, and the underlying economic factors.

    Even if it turns out that government employees are getting hurt, the ACA has so many other strong benefits both related to health care and boosting the economy that it would be worthwhile to make adjustments to assist such employees and still come out far ahead. If there really is a problem, the simplest solution might be to have the public employers drop coverage in these cases and enable the employees to get affordable coverage by qualifying for the subsidies.

    As for your last line, I’ll keep that in mind. You are clearly a sucker for any story which confirms your biases regardless of its validity.

  6. 6
    Ron Chusid says:

    Besides, even if this article is valid (as questionable as it is), this means that the effects of the Affordable Care Act would be to decrease private sector unemployment, increase the number of small businesses, and decrease the number of government employees. Isn’t this what conservatives would like to see? What are you complaining about?

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