Obama Makes Surprise Reversal On Obamacare

[ProSense]

Obama Makes Surprise Reversal On Obamacare

By Igor Volsky

The Obama administration announced on Monday that it would be reversing scheduled reductions to the Medicare Advantage program, dealing a huge victory to private insurers and the bipartisan group of lawmakers who advocated for maintaining the higher reimbursement rates that President Obama claimed only padded company profits.

The Affordable Care Act is supposed to reduce excess payments to private insurers participating in Medicare Advantage, saving the government $156 billion over a decade....Throughout the health care debate, Democrats maintained that while the health care law would not reduce seniors’ traditional Medicare benefits, scaling back overpayments to private insurers participating in the Medicare program was necessary because the government was paying private insurers 14 percent more on average to provide the same benefits available under the traditional Medicare program. While some Medicare Advantage plans do offer seniors additional benefits efficiently, a number of government reports and independent estimates found that other insurers used the additional payments s to increase profits. A recent analysis from three economists the Wharton School, for instance, concluded “that only about one-fifth of the extra reimbursement gets passed through to patients in the form of lower premiums, better care or more services.”

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Lawmakers who voted against the ACA had initially predicted that lowering the subsidy to private insurers would force companies to stop offering coverage, causing 10 million seniors to lose their Medicare benefits. Republicans introduced numerous amendments instructing Congress to remove the cuts to the Medicare Advantage program and Sen. John McCain (R-AZ) even urged seniors to rip up their AARP cards in protest of the organization’s support for the reductions.

Those predictions did not come to pass. Enrollment in Medicare Advantage has grown every year since the ACA was enacted in 2010, premiums have decreased, and 99.1 percent of beneficiaries maintained access to their desired plans. The government’s overpayments to private insurers also decreased over this period from 14 percent on average when the law passed to 6 percent on average today.

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http://thinkprogress.org/health/2014/04/08/3423974/obama-surprise-reversal-obamacare/

Bipartisan support of Medicare Advantage overpayments

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Comment:

By Don McCanne, M.D.

AHIP, the health insurance lobby organization, has been conducting an intensive campaign to prevent the reductions in overpayments to the private Medicare Advantage plans - reductions required by the Affordable Care Act. A hint at how successful their campaign has been can be inferred from the fact that this letter from 40 senators, calling for perpetuation of the overpayments, but using AHIP rhetoric, was downloaded from the AHIP website.

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Why should we care? The most obvious reason is that it is our tax funds that are being given to these private health plans, paying them more than it costs us to provide care in the traditional Medicare program. A much more important reason is that enrollment in these plans continues to expand, opening the door to converting Medicare into a “premium support” program (vouchers) for a market of private plans. Traditional Medicare will then be allowed to wither as an underfunded welfare program, and perhaps eventually be abolished. Then the value of the premium support vouchers will be allowed to diminish, shifting more health care costs to the beneficiaries.

If these 40 senators really cared about their Medicare beneficiaries, instead of asking CMS to overpay the private insurers, they would pass legislation to increase coverage for those in the traditional Medicare program in order to protect them from excessive out-of-pocket costs that currently require medigap or employee retiree health benefit coverage. Why should those in the private plans receive greater benefits when we’re all paying for them?

For single payer supporters who like to use the “Improved Medicare for All” designation, it is imperative that the traditional Medicare program be protected so that the public can understand that it is nominally a framework on which single payer improvements can be built...instead of Congress insisting on paying more to the private MA plans, we should demand that they move those overpayments to the traditional Medicare program where they’ll be put to better use in reducing financial hardship, rather than giving them to the private insurers to squander on gym memberships or whatever else might be used to market their plans.

http://www.pnhp.org/news/2014/february/bipartisan-support-of-medicare-advantage-overpayments

More debate here: http://www.democraticunderground.com/10024792973

[Fred Sanders]

1. The insurers will be subject to the same 20% max profit rule, so is this not a step towards even

more comprehensive health coverage, is this an Obama Trojan Horse?

[ProSense]

2. No, these are supplementals to Medicare, which has a different MLR, about 96/4 percent. n/t