WashPo: Prez wrong, ObamaCare will cut benefits to seniors

The Washington Post offers some hard reality regarding Barack Obama's never ending refrain that government-run health care won't cut benefits for seniors.

The Senate Finance committee, chaired by Max Baucus (D-MT), is proposing altering the popular Medicare Advantage program, which is an HMO-type program for seniors, in order to pay for whatever health care plan emerges from the upper chamber.

The Post has performed an examination on this idea:

The original idea was that such programs would be more efficient, and therefore cost less, than conventional Medicare. But Medicare Advantage plans cost, on average, 14 percent more than regular Medicare -- and membership has been growing rapidly, attracting one-fourth of seniors. They receive an extra subsidy from taxpayers and, through higher premiums, from other seniors. Alternatives to traditional fee-for-service plans should be encouraged, but not with such a tilted playing field.

Mr. Obama would end what he calls "unwarranted subsidies in Medicare that go to insurance companies -- subsidies that do everything to pad their profits but don't improve the care of seniors." That is not accurate. Part of the Medicare Advantage overpayments do go to improve insurers' bottom lines. But insurers are required to plow a significant part of this extra money into added benefits -- lower premiums or co-payments, for example, or vision and dental coverage -- which is why the plans have been growing so fast.

As Congressional Budget Office Director Douglas Elmendorf concluded, the proposed change "could lead many plans to limit the benefits they offer, raise their premiums, or withdraw from the program." The CBO projects that by 2019, 2.7 million fewer seniors would be enrolled in the plans than would have without the changes. However, those who chose such plans would still enjoy significant additional benefits: $42 per beneficiary per month, about half of what they would get under current law. Bottom line: Mr. Obama is right to pursue the policy change, but incorrect about benefit cuts.

But seniors like Medicare Advantage, and they vote in greater numbers than younger people, particularly in off-year elections.

By the way, is Medicare Advantage popular because stand-alone Medicare isn't getting the job done?

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