Archive for April, 2012

ObamaCare Cuts Billions from Medicare Advantage; Cuts Hidden Until After Election

April 3, 2012

Anyone watching the 2012 vice presidential debate would have seen Mr. Biden denying the planned cuts to Medicare Advantage, and pointing to the program’s current high enrollment rates as his evidence.

This is, to use the Vice President’s Jurassic era jargon, just a bunch of “malarkey.”

Medicare Advantage has a big target on it’s back – it is singled out as an object of true loathing by Government-mandated health care supporters because it entrenches private insurers within the Government programs, and will make it harder to eventually go to a single-payer system (which, after all, is their goal).  Medicare Advantage also provides just too much coverage to its enrollees to suit Government health care advocates, who want to provide minimal health care to seniors so we can redistribute more resources to other, poorer, younger demographic groups.

Therefore, ObamaCare is scheduled to gradually slash Medicare Advantage by as much as $300 billion over the next 10 years! This is about 40% of the total of $716 billion in Medicare cuts that will be used to offset the costs of other portions of ObamaCare (as described in this Investor’s Business Daily article.) The problem is that this program is very popular among seniors, especially those in the so-called “Swing States,” with ever more people wanting to enroll, as our brilliant Vice President has noted.  With the first round of cuts looming before the 2012 election, the Administration faced a potential backlash from senior voters in those States.  What to do?

The Obama Administration solution was to use another provision of the Affordable Care Act (ACA)  to simply hide these cuts.  The ACA gives ‘the Secretary’  (of DHHS) discretionary power to utilize funds set aside for experimental “demonstration projects,” without Congressional approval.  Secretary Sebelius is currently pumping these funds into the Medicare Advantage program in the form of “quality bonus payments”  in order to offset the current round of cuts.  In effect, the Obama Administration is using funds intended for other purposes as a “slush fund” to hide the cuts to Medicare Advantage from prospective voters until after the election!

The amount of offset reported by the General Accountability Office (GAO) for 2012 is $8.35 billion – more than has been spent on all the “normal” projects and studies over the last 17 years!  And the really smelly part of this taxpayer-funded temporary bailout of Medicare Advantage is its purely political purpose.  It is as though taxpayers were forced to support the Obama campaign to the tune of $8 billion just so Old Joe Biden could could blather on and mislead voters by insisting the program had not been cut and was healthier than ever.  You can read more about this disgraceful deception in the excellent Forbe’s story.

The real shame of all this political theater and vilification of Medicare Advantage as a “subsidy” for “rich insurance companies”, is the unrecognized effectiveness of this program in serving its subscribers. Studies show that Medicare Advantage patients spend fewer days in the hospital and have lower hospital readmission rates than their regular Medicare counterparts. Supposedly, with its Public face, ObamaCare seeks to control such cost factors.

Nevertheless, after the election, a second Obama Administration will quietly turn off the phony “quality bonus” subsidy spigot and proceed with the scheduled cuts, because this isn’t really about cutting costs, or providing quality care. It’s about reducing Government expenditures on groups seen as too well-off, or not worth the “investment.”  The only way ObamaCare can rein in its incredibly underestimated expenses, is to restrict access to health care by those that need and use it most – the elderly. I will have more to say about this policy in the very near future when I tell you about the Independent Medicare Advisory Board, and its agenda to slash Medicare expenditures and force the rationing of care, and about the new punishments for hospitals who readmit Medicare patients.

We need to get rid of truth-challenged political hacks like Joe Biden and have a real investigation into the malfeasance and corruption of this Administration, and the extent to which public funds have been diverted to shabby partisan uses.

But mostly we need to come up with a true health care reform plan that doesn’t punish patients for being sick, and doesn’t punish doctors for helping them.  The present Administration clearly isn’t up to the task.

The Sceptic


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