Obamacare cuts billions from Medicare. The cuts, in large part, come from demolishing Medicare Advantage. This is an extremely popular program run by private insurance companies, and therein lies the rub. Private means that you make the choice, the government does not make the choice for you, and, under Obamacare, this will never do.
Seniors are currently given a choice…traditional Medicare, or Medicare Advantage. Under the former, there are co-pays and deductibles and limits on the medical services provided. Under the latter there are no co-pays or deductibles and, many more medical services are covered.
With Medicare Advantage, the federal government pays the private insurance company that you choose a set amount of money for you, to wit: the average cost of covering someone on Medicare. You, on the other hand, pay nothing. These companies then compete with each other for your business. The more services that a company provides in its policy, the more likely you are to select it.
As an example of the differences between the two, Medicare does not cover eye glasses, you must pay for them yourself. Most Medicare Advantage policies cover eye glasses at no expense to you.
Medicare’s budget counters estimate that Obamacare’s cuts in the Advantage program will result in enrollment falling by half.
Why, you ask? Because the cuts to this program will, of necessity, dramatically reduce the benefits provided. But, this is an election year, and it is not a good idea to annoy the seniors.
So the administration invented a mythical “demonstration project”, in 2010,
…that would test if paying insurers bonus subsidies would improve quality over the next two years.
In an amazing turn of events, this week the administration announced that this “demonstration project” has saved enough money ($8.35 billion) to reverse 71% of the cuts to Medicare Advantage for 2013 that seniors would have learned about in October, 2012.
Here is what the Government Accountability Office has to say about this alleged “demonstration project”:
[t]he demonstration project’s design ‘precludes a credible evaluation of its effectiveness’…since all Medicare Advantage insurers get the pay-for-performance bonuses. [emphasis supplied]
So, seniors on Medicare Advantage presumably will still vote for the President in November because they do not realize what the President has done to them.
They will next October.