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September 23, 2010

You can keep your plan ... or maybe not

Joesph Smith
The President's pledge that no one will lose their health care plan may be among the first casualties in the drip-drip rollout of the new health care order.

Over the past year and a half the President's teleprompter said over and over again:

Let me be exactly clear about what health care reform means to you ... First of all, if you've got health insurance, you like your doctors, you like your plan, you can keep your doctor, you can keep your plan.  Nobody is talking about taking that away from you.

The Wall Street Journal now reports that the White House has denied rate increases or benefit reductions to 298 Medicare Advantage plans, out of some 2,100 bids submitted.  Medicare Advantage refers to private plans that supplement Medicare with added benefits, currently covering some 11 million people.

"For these plans we said, 'No, you have to do better,' " said Donald Berwick, the Obama administration's Medicare and Medicaid chief."

The Journal notes that concerns that some insurers may be forced to drop out of the Medicare and other markets "are spreading on Capitol Hill"

Some Republicans blasted the move as short-sighted.

"The administration may be trying to persuade seniors that everything is fine, but the millions of Medicare beneficiaries who will lose their current coverage or see fewer benefits in the coming years will disagree," said Iowa Sen. Charles Grassley.

Last year, the federal Medicare agency didn't deny any bids. "This is as dramatic a turn as I've seen from this agency in 20 years," said John Gorman, a consultant who helped insurers prepare bids.

The move may carry some downsides. Mr. Gorman said that in some cases, the insurers were forced to run their plans at a loss. While it was generally too late for them to withdraw from Medicare Advantage for 2011 -- only a handful did -- more might drop out for 2012 and force their customers to look for another plan.  [emphasis added]

While the rejected increases for 2011 are around the margins, the following year will begin to hit home that the ObamaCare entitlement will come in part at the expense of seniors and the disabled on Medicare:

The bids for 2012 will bring bigger changes to Medicare Advantage mandated by the health overhaul passed in March. The government will begin cutting $136 billion in payments to Medicare Advantage insurers, which will likely force further cuts in benefits.

Indeed, the National Center for Policy Analysis (NCPA), in a detailed analysis (p.30) of ObamaCare, points out that:

More than half the cost of health reform will be paid for by $523 billion in reduced Medicare spending over the next 10 years.

In general, these Medicare spending cuts exceed the new benefits by a factor of more than 10 to one.

More than $200 billion in spending cuts are directed at Medicare Advantage (MA) plans.  As a result, one of every two people expected to participate in Medicare Advantage over the next 10 years (7.4 million of 14 million) will lose their coverage entirely, according to Medicare's chief actuary.  [emphasis added]

With planned Medicare cuts also likely to "cause some doctors to retire and force some hospitals out of business," as the NCPA adds, medical care for seniors appears headed in the wrong direction.

Of course, if your name is Barack "keep-your-plan" Obama or Donald "ration-with-your-eyes-open" Berwick, then perhaps it is the right direction.

Posted at 3:20 PM | Email | | | Share Share