Policy

In Fact, Mr. President, We've Been Talking About Reducing Medicare Benefits This Whole Time

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Politico points out a new report from Richard Foster, Medicare's chief actuary, noting that seniors enrolled in Medicare Advantage plans will see reduced benefits as a result of the recent health care overhaul:

When I say "nobody," I mean "nobody but the CBO and CMS."

A Medicare official concedes that seniors may have to dig deeper into their wallets next year thanks to the health care law.

The new analysis obtained by POLITICO finds the health care overhaul will result in increased out-of-pocket costs for seniors on Medicare Advantage plans.

Richard Foster, the actuary for the Centers for Medicare and Medicaid, also tells Senate Republicans that the overhaul will result in "less generous benefit packages" for Medicare Advantage plans next year. Foster is independent from the administration and non-partisan.

Politico frames this as a concession. It's not much of one. Last year, a different Foster report indicated that, as The Washington Post summarized, the health care overhaul "would sharply reduce benefits for some senior citizens and could jeopardize access to care for millions of others." And the Congressional Budget Office has said that an early draft of the law "would reduce the extra benefits that would be made available to beneficiaries through Medicare Advantage plans."

Now, some recent changes to Medicare Advantage have been mistakenly attributed to the PPACA. For example, health insurers in both Massachusetts and Minnesota recently announced that they would be dropping tens of thousands of seniors from their current Medicare Advantage plans. Those changes appear to be at primarily a result of a 2008 law requiring fee-for-service Medicare Advantage plans to create networks of doctors. Rather than build those networks, some insurers have simply opted out of the market.

But the fact is that despite the Obama administration's attempts to tell seniors that Medicare wouldn't be negatively affected by the new health care law, both Foster and the CBO have made it pretty clear that seniors will see fewer benefits and/or higher costs. Obama may have promised seniors at an AARP panel last year that "nobody is talking about reducing Medicare benefits." But at least for seniors on Medicare Advantage, official government sources have been talking about reducing those benefits since roughly the time that the first drafts of the bill were released.

Are cuts to Medicare a bad thing? Not at all. In fact, I think it's pretty clear that major changes are necessary in order to hold down the program's spending growth. But the Obama Administration has repeatedly misled the public about how the new law will affect the program. More context on ObamaCare and Medicare here.