WASHINGTON — Congress’ chief budget officer on Tuesday contradicted President Barack Obama’s oft-stated claim that seniors wouldn’t see their Medicare benefits cut under a health care overhaul.
The head of the nonpartisan Congressional Budget Office, Douglas Elmendorf, told senators that seniors in Medicare’s managed care plans could 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 “would reduce the extra benefits that would be made available to beneficiaries through Medicare Advantage plans,” he said.
Finance Committee aides emphasized that core Medicare benefits wouldn’t be cut because the plans are required to offer the benefits available under traditional Medicare fee-for-service coverage.
Federal subsidies to private Medicare plans average about 14 percent higher than those involved in fee-for-service coverage. The health care bills pending in Congress would reduce or eliminate the difference in part by introducing a competitive bidding system to pay the plans. The private plans cover around 25 percent of Medicare beneficiaries.
The Finance Committee bill along with other health care legislation in Congress would cut around $500 billion in projected Medicare payments to providers over a decade, including around $125 billion from Medicare Advantage.
Obama has pushed the cuts to providers even while repeatedly insisting they won’t reduce seniors’ benefits. “Nobody is talking about cutting Medicare benefits,” Obama said during an online AARP forum in July.
The White House released a statement Tuesday night defending its approach.
“Health insurance reform will strengthen Medicare for seniors, not diminish it,” said White House spokesman Reid Cherlin. “Even under the competitive bidding proposal in the legislation, Medicare Advantage plans will still be paid more than traditional Medicare plans. Yes, they’ll need to compete, and they’ll need to be more efficient, but they’ll still have more money to work with than traditional Medicare.”
Finance Committee Democratic Sen. Bill Nelson of Florida, whose state is home to many seniors, plans to offer an amendment to the bill to protect current Medicare Advantage beneficiaries from losing benefits. Committee Chairman Max Baucus, D-Mont., has already agreed to hold benefits stable for plans in areas of the country where they deliver more efficient care, but it’s not clear precisely which areas would be affected.
Elmendorf also said he expected the Medicare Advantage plans to lose 2.7 million enrollees over the next decade. He said most of that was from people who would have signed up but who won’t because of the changes, as opposed to people quitting the plans.
The CBO had already put four darts in the the Obamcare bill, when they first came up with the costs, and then when they said that holding down medicare costs would only save a total of $2 Billion of the plan’s estimated $1.6 Trillion costs, then there was the CBO revelation that preventative medicine would increase rather than reduce health care costs.
In early September Elmendorf sent a letter to the House Ways and Means Committee in response to a question by the committee’s ranking Republican Dave Camp (full letter at the end of this post). The question was about the change in Medicare Part D premiums that would result from certain provisions contained in title I in division B of the Obamacare bill.
The answer was not good for the bill’s supporters. Enrollees in the Medicare prescription drug programme (known as Part D) would see their premiums rise about 5% in 2011 and this increase would reach about 20% by 2019, according director of the Congressional Budget Office (CBO).
I am reminded of the end of the movie War Games when the super computer figures out there was no winning strategy for a Nuclear War it says, “Strange Game Joshua, The Only Way to Win is Not to Play.” The same could be said about Obamacare.