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President-Elect Obama, Sen. Reid focus on
scaling back Medicare Advantage Program
[Jan 15, 2009] Democrats, led by
President-elect Barack Obama and Senate
Majority Leader Harry Reid (Nev.), have
signaled their intent to "scale back" the
Medicare Advantage program,
The Hill reports.
Obama on Sunday on ABC News' "This Week"
identified MA as an example of
"programs that don't work," adding that the
program "doesn't necessarily make people on
Medicare healthier."
Reid said, "Since Bush's Medicare bill went
into effect, insurance companies, HMOs and
other managed care entities have made $15
billion to purposely destroy Medicare."
According to
The Hill,
congressional Democrats have pledged to cut
$50 billion in federal subsidies to the MA
program, which offers private health
insurance plans to more than 10 million of
the 45 million Medicare beneficiaries.
MA
cost the government 13% more per beneficiary
on average than the regular Medicare plan in
2008, according to the
Medicare
Payment Advisory Commission.
Reid
wants to reduce subsidies to "bring the
payments more closely in line" with the cost
of each beneficiary on traditional Medicare,
a Reid spokesperson wrote in an e-mail.
Democrats say $15 billion of the annual $94
billion in subsidies granted to MA plans are
the result of "overpayments."
The Hill
reports that Democrats since 2003 have been
attempting to "undo lucrative subsidies"
enacted by Bush and Republicans to MA plans,
including last year
passing
a $14 billion cut to the program over the
next five years.
According to
The Hill,
Democrats are "driven not only by their
general mistrust regarding private-sector
management of social welfare programs but by
their thirst for tangible budgetary savings
to offset the cost of a health care reform
package that could weigh in at close to $1
trillion."
Insurer Response
America's Health Insurance Plans
said subsidies that Democrats want to cut
from the program help purchase prescription
drug coverage, vision care and chiropractic
services for which traditional Medicare does
not pay.
MA enrollees also often pay lower
out-of-pocket costs, according to
The Hill.
In addition, MA plans are
"disproportionately popular in rural areas
and among racial and ethnic minorities,"
The Hill
reports.
Robert Zirkelbach, a spokesperson for AHIP,
said, "Cuts to the Medicare Advantage
program would have a devastating effect on
seniors who rely on the additional benefits
and services these plans provide."
He added, "Seniors would face reduced
benefits, limited health care choices and
higher out-of-pocket costs if Congress chose
to cut" the program.
The Hill
reports that cutting substantial federal
subsidies to the program "could alienate a
powerful industry with a major stake in the
future of the U.S. health care system."
The insurance industry has said it would
oppose Obama's proposal to initiate a
publicly funded insurance plan that would
compete with private insurers (Young,
The Hill,
1/14).
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