“I just want to be clear, again: Seniors who are listening here, this does not affect your benefits. This is not money going to you to pay for your benefits; this is money that is subsidizing folks who don’t need it.” Or so President Barack Obama promised our nation’s seniors earlier this year. Problem is, as we have pointed out many times, this is simply not true: Obamacare will absolutely cause reduced Medicare benefits for Seniors. Congressional Budget Office Director Douglas Elmendorf told Congress that and even the New York Times has grudgingly admitted as much.
Specifically, every version of Obamacare waiting to be merged into one bill on Capitol Hill cuts billions of dollars from the Medicare Advantage program. One of the dirty little secrets about Medicare is that it actually only covers slightly more than half of all health care costs for seniors and disabled citizens. Medicare recipients buy the balance of their health care coverage through private supplemental insurance or Medigap coverage. Most seniors, therefore, actually have at least two health insurance providers, the federal government through Medicare, and a private supplemental insurer. Medicare Advantage allows seniors to pay a single premium and receive a much broader range of health care services than just government-run Medicare provides, including prescription drug coverage, preventive-care services, routine physical examinations, and coordinated care for chronic conditions.
The Baucus bill, which will be voted on in the Senate Finance Committee later this week, is the least offensive Medicare reform plan currently being included in Obamacare. However, the Baucus bill fails to achieve true reform in two ways: First, it takes all ’savings’ from Medicare reform and immediately plows them into a new deficit exploding entitlement. Second, and more importantly, it preserves the old fee-for-service Medicare program which is based on central planning and price controls.
The better option would be to move Medicare towards a true “premium support” system where the government would make direct contributions to all beneficiaries who could then control how to spend their own health care dollars. This would be the same model as the Federal Employees Health Benefits Program (FEHBP) which provides health insurance to Members of Congress. Heritage fellow Bob Moffit explains:
With modifications, Congress could adopt a premium support system broadly similar to the FEHBP and secure the same positive results in intense competition, patient choice, high quality care, and patient satisfaction. Without such modifications, there is no real reform but just more of the same.
Instead of breaking the President’s promises, and raising health care costs for America’s seniors, Congress should hit the reset button and start over with real competition and state based reform that lowers costs and improves care.
Quick Hits:
- Politico details the “Obama Gitmo Blame Game.”
- The Obama administration immigration plan repeats all of Bush’s mistakes including blanket amnesty for millions of illegal immigrants.
- Gallup’s Consumer Confidence Index fell by 9 points to -29 and Gallup’s Job Creation Index fell 3 points to zero.
- According to a subpoena served Monday by the Louisiana attorney general, ACORN’s embezzlement scandal totaled $5 million, not $1 million as claimed by the community organizers.
- According to the International Energy Agency, despite the fact that global temperatures have not risen in the past year, the cost of cutting enough carbon to stop global warming has risen 37% since just last year to a total of $10 trillion.
President Barack Obama has promised Americans on multiple occasions that his health care plan would not cut benefits for Medicare enrollees. For example, on August 11th Obama promised: “I just want to be clear, again: Seniors who are listening here, this does not affect your benefits. This is not money going to you to pay for your benefits; this is money that is subsidizing folks who don’t need it.”
We pointed out at the time that Obama’s statement is simply not true. Yesterday, Associated Press reported:
The head of the nonpartisan Congressional Budget Office, Douglas Elmendorf, told senators Tuesday that seniors in Medicare’s managed care plans would see reduced benefits under a bill in the Finance Committee.
The bill would cut payments to the Medicare Advantage plans by more than $100 billion over 10 years.
Elmendorf said the changes would reduce the extra benefits that would be made available to beneficiaries.
Heritage fellow Bob Moffit details just what the benefits are, including:
- prescription drug coverage
- preventive-care services
- coordinated care for chronic conditions
- routine physical examinations
- additional hospitalization
- skilled nursing facility stays
- routine eye and hearing examinations
- glasses and hearing aids
Moffit continues:
Medicare Advantage has several features that are superior to previous private health plan experiments: an improvement in financing and a greater level of market penetration and stability than Medicare Plus Choice. Most important, it gives senior and disabled citizens new and different private health plan options, more affordable care, and broader and better benefits, including care management programs and prescription drug coverage.
…
While these Medicare Advantage features are substantial improvements over traditional Medicare, the next stage of reform must also make the total program affordable, modernize its insurance arrangements, and improve the delivery of medical services.
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For future generations to be able to afford Medicare, the program will have to be restructured and reformed. For that reform to be successful, Congress will have to reform the existing payment system and provide a fixed-contribution system of premium support, properly adjusted, for each beneficiary.