Obama Health Plan Cuts Benefits for Quarter of All Seniors (Medicare Advantage III)

    My previous two posts discussed the details of the Medicare Advantage plans and the Administration's plans to cut them substantially in order to provide additional funding for its health-care proposal.  As Rep. Paul Ryan charged at the Health Care Summit, this is double counting in the sense that the administration has claimed that we need to reduce Medicare expenses substantially simply for Medicare to become solvent.  However, this particular reduction will have no effect on Medicare savings, because it is intended to he used to offset other costs of the health bill.  In any event, the savings are only $14 billion (see my Medicare Advantage I post).  Nevertheless, the Administration points to this as one of the major areas of savings that will offset the costs of providing health insurance to an additional 30 million people.

    The administration never admits that these particular cost savings affect a quarter of all Medicare users.  As noted in my previous post, 24% of all Medicare recipients use Medicare Advantage plans.  I suspect that, if they were fully aware of this, seniors would be even more upset about the Obama proposals than they are now  Moreover, these proposed cuts are not merely intended to save cost.  I believe that they are based on a philosophical difference with the entire concept of private plans in Medicare.  This plan was adopted in 2003 by a Republican administration and CongressI encourage the maximum use of marketplace incentives and government programs.  The plan has worked very well -- there are now millions of consumers Medicare Advantage plans who have received the benefits of competition.  Such competition will even affect the basic Medicare program which will have to respond to the loss of so many consumers.  These proposed cuts, therefore, are, in reality, an attack upon the entire concept of the marketplace.