A video circulating on the Internet claims that Obama has intentionally delayed a demonstration project to cut Medicare Advantage Plan payments until after the November election, thus deceiving older voters, especially those enrolled in Part C of Medicare.
More Internet nonsense!
The fact is that the Affordable Care Act does cut payments to Medicare Advantage Plans over a period of several years. This is no secret. Somewhere down the road these cuts may mean that participants in such plans will pay a higher premium (many pay no premium at present) and/or see some of their extra benefits beyond basic Medicare coverage cut. These cuts will occur to the extent that these plans cannot be sufficiently efficient to continue the benefits with lower payments from Medicare.
Now, why are these payments being cut? Well, the obvious answer is to save money and that is true, rather the truth is to save money to use somewhere else. The other factor is that these private plans compete with Medicare and before Obamacare Congress saw fit to pay these plans 114% of what the cost was for traditional Medicare. In other words they were being subsidized to a greater extent than Medicare. The idea was to make the plans more desirable to Medicare beneficiaries and the more beneficiaries who enrolled, the more risk was shifted from the government to the private insurers.
Does making these higher payments make sense? I guess if you are one of the beneficiaries enrolled in a Part C plan it does, but in the scheme of things, these plans and the people who choose to enroll in them should pay their fair share. Oops, sorry about that fair share business, but I couldn’t resist.
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