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Reporting and analysis from ABC News Chief Washington Correspondent and "This Week" Host George Stephanopoulos

George Stephanopoulos reports on events in politics, Congress and the White House for ABCNews, on the air and online. He interviews top newsmakers, discusses the events of the week and looks to the week ahead each Sunday on 'This Week.'

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Obama Defends Medicare Advantage Cuts

September 20, 2009 9:00 AM

In his Joint Session speech President Obama promised that no one on Medicare would be forced to lose the coverage they have now.

But others, like Florida Democrat Senator Bill Nelson, worry that Obama's reforms will deny seniors coverage they now rely on.

When I asked him about Nelson's fear, Obama disagreed, but he didn't rule out endorsing Nelson's effort to shield current Medicare beneficiaries from the cuts.

Here's our exchange:

STEPHANOPOULOS:  Let's go to Medicare then...

OBAMA:  Good.

STEPHANOPOULOS:  ...because you also said that no one will lose what they have.  And Senator Bill Nelson, a Democrat, says that the cuts you're looking at in Medi -- the Medicare Advantage program...

OBAMA:  Right.

STEPHANOPOULOS:  ...are going to force people to lose coverage they now have.

OBAMA:  No.  Here -- here's what's going to happen.  These are essentially private HMOs who are getting, on average -- and this is not my estimate, this is Democrats and Republicans, experts have said -- they're getting, on average, about 14 percent more over payments, basically subsidies from taxpayers for a program that ordinary Medicare does just as good, if not better, at keeping people healthy.

Now, they package these things in ways that, in some cases, may make it more convenient for some consumers, but they're overcharging massively for it.  There's no competitive bidding under the process.

And so what we've said is instead of spending $17 billion, $18 billion a year, $177 billion over 10 years on that, why wouldn’t we use that to close the donut hole so the people are actually getting better prescription drugs…

STEPHANOPOULOS: But Senator Nelson says it’s going to…

OBAMA: …Why don't we make sure that we're using some of that money to actually make people healthier?

STEPHANOPOULOS:  But he said it's going to cause beneficiaries right now to lose what they have.

OBAMA:  Look, I understand that change is hard.  If what you're saying  is that people who are currently signed up for Medicare advantage are going to have Medicare and the same level of benefits, but they may not be having their insurer get a 14 percent premium, that's absolutely true and will the insurers squawk?  You bet.

STEPHANOPOULOS:    They may drop the coverage.

OBAMA:  No, these folks are going to be able to get Medicare that is just as good, provides the same benefits, but we're not subsidizing them for $18 billion a year.

STEPHANOPOULOS:  So Senator Nelson, he wants to pass an amendment that shields anyone currently on Medicare advantage from any cuts.  Do you support that?

OBAMA:  George, I'm not going to be negotiating a particular provision of the bill, sitting (ph) down with you here right now.  What I am going to say is this: the basic principle that is indisputable is that we are wasting hundreds of billions of dollars in Medicare that is not making people healthier.  I want to make sure that we're using that money to actually make people healthier.

STEPHANOPOULOS:  But if people lose their Medicare advantage?

OBAMA:   What I have said is we're not going to take a dollar out of the Medicare trust fund.   We're going to make sure that benefits are just as strong if not stronger.  We're not going to subsidize insurance companies in ways that end up creating a situation that Medicare is actually weaker and has a less financial foundation, because right now, we've got eight years from now potentially Medicare going into the red.

Watch it HERE.

- George Stephanopoulos

September 20, 2009 in Barack Obama, This Week with George Stephanopoulos | Permalink | Share | User Comments (80)

User Comments

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If I relied solely on Medicare for my health care coverage, I would be in a world of hurt. By having Med-Advantage coverage from an insurance carrier as my 'primary' insurance, I am able to see a doctor when I need, and I am healthier for it. To lose the insurance I now have would be detrimental to my good health.

Posted by: Bettina | Sep 20, 2009 9:34:19 AM

Bettina,

Your comment is exactly correct. Med-Advantage does indeed give YOU an advantage. However, for every medical procedure you have, the taxpayers pay 14% more than it costs for most senior citizens on regular Medicare. That 14% is profit for the PRIVATE Medicare Advantage insurance providers. The 14% also allows you to get other benefits. All of the rest of Seniors are getting excellent care on Public Medicare ( as you would if the Medicare Advantage Plan is discontinued) but they pay for their drugs and supplement plans, while they also pay and additional 14% for you to avoid these expenses. This is unfair (since these ADVANTAGE plans are not available in all states), not efficient, and not economical.

Posted by: Molly Ransbury | Sep 20, 2009 10:06:54 AM

My Blue Cross Advantage program - $69/mo. US Govt Medicare in addition, $250/mo. Do the math, Advantage is better and affords me more respect in the medical community than being on the government dole!

Posted by: Dori | Sep 20, 2009 10:13:19 AM

The President is absolutely right. Instead of having people to buy this BS additional coverage "medicare advantage" in which the it cost additional money, it should simply be included and be part of medicare. Sure, the insurance industry wants to keep getting the gravy here, but there's no need to have it if it is inclusive of medicare. The only ones that will lose here is the insurance companies, not those getting medicare. We have to take the profits out of health care. They have no business in making money out of the misery of illnesses.

Posted by: jake | Sep 20, 2009 10:14:42 AM

Jake, I agree that making a profit out of health care is morally unacceptable, but I have to point out that the insurance industry is NOT health care. Furthermore, the best health care systems in our country our non profit organizations. For-profit health care systems have been one of the worst causes rising in health care costs in our country. As far as I'm concerned, it's a conflict of interests, and it can't be accomplished with true compassion and concern for the well being of patients.

Posted by: sharingmine | Sep 20, 2009 10:38:04 AM

I was put back while watching the interview this morning with Barack I found it disheartning that the man will not come clean about thr health cars bill about raising taxes. Even when confronted with the obvious his statement about the American people afraid goverment getting bigger lets not forget the deals with the auto industries blatant thank for the money to get me elected if I had any doubts about the health care bill he is pushing so hard to get thru I am surely against it now and urge everyone to call you're congressmen and senator to stop it now before WE AS THE PEOPLE pay dearly for it down the road and as far as goverment take over lets not forget the policies in the past ten months the goverment has forced on us as a nation.

Posted by: scott | Sep 20, 2009 11:11:29 AM

also on a sad note please mention Henry Gibson next week a very underated actor
thanks

Posted by: scott | Sep 20, 2009 11:13:07 AM

Hey Molly. When the healthcare czar eventually allows you to report to see a Gynocologist chosen for you write back and tell us how you feel.

Posted by: Dr. Bob | Sep 20, 2009 11:18:55 AM

Unless you are on Medicare Advantage, you do not have the right to critize the plan. My husband is on an Advantage Plan and it is very reasonable. He sees his doctor for regular checkups and is given appointments when he is ill in a timely manner. It also pays for the 20% that the Government does not pay for hospitalization and provides drug coverage. The person pays for coverage every month and the cost is reasonable and the government cannot dictate what is covered and what is not covered. If it was up to the President, he would not give as much care to the elderly because he sees the last year of an elderly person's life a burden on health care. He doesn't seem to take into consideration that these people paid for health care since the time it became available through empoyers and in some cases paid for it themselves when they needed to. Having the gift of motivational speaking is not anyway to judge whether or not the person is speaking the truth. However, it is a great tool if you want to sell something to the public and it may not be what the public needs.

Posted by: Joan | Sep 20, 2009 11:19:12 AM

THE BARACK OBAMA'S HEALTHPLAN IS AT BEST
A SOCIALISTIC TAKE OVER OF ALL AMERICANS. WENT THROUGH THIS IN EUROPE(
HOLLAND) MYSELF AND YOU WHAT IT IS NOT
GOOD. THE GOVERNMENT IS SAYING WE ARE
THE ONLY INDUSTRIAL NATION WITHOUT HEATLHCARE, SO WHAT! DO WE JUMP OFF A
CLIFF BACAUSE FRANCE DOES?
WE HAVE THE BEST DOCTORS IN THE WORLD,
THAT IS WHY PEOPLE COME TO AMERICA FOR
SURGERIES OR CARE FOR THEIR ILLNESSES,
NOT THE OTHERWAY AROUND.
SO WAKE UP PEOPLE, THE GOVERNMENT WANTS
TO CONTROL YOU FROM BIRTH UNTILL DEATH!

Posted by: carl | Sep 20, 2009 11:32:14 AM

Having constituents actually pay something extra like in MA, insures they have some skin in the game of holding some responsibility for their health. Perhaps 14% markup is an appalling number to many, but your cigarettes are marked up 400%, your twinkies are marked up 300%, your gas is up 100% from taxes, so where is the outcry there? I don't know if 14% is a fair margin, but it assumes the government would run the same with no inefficies or waste to compete or exceed that same 14%. Pleas think everything can't be free people, no free food, no free beer, no free gas, no free medical services. One way or another it costs you all. I fear the direction of the charitable giving in this country, if people start sensing our wallets are opened for us, and the charity taken out.

Posted by: AskNot - WantNot | Sep 20, 2009 11:35:10 AM

Who knows what is going to happen when you can't believe a word the man says!!!

Posted by: jlpillinois | Sep 20, 2009 11:38:07 AM

Medicare advantage streamlines a caim process made complicated by the government. It also provides supplemental coverage for the medicare coverage shortfall (unlimited 20% co-pay).
Medicare advantage also provides prescription drug coverage including the "medicare gap".
It does all this for little or no cost to people trying to live on a social security check.
If the government puts this "savings" on the backs of old people, they will have to purchase a supplement policy; if they can afford one.
That 14% savings the President mentioned will come right out of my pocket, then we'll pay a government employee twice as much to do half the work done very well by the insurance company.
Why does no one speak for old people?

Posted by: Ron Lewis | Sep 20, 2009 11:41:42 AM

I have worked for years with folks who have medicare. It was a decent system until Bush pushed Medicare Part D. Once the insurance companies got a hold of it, we now have a nightmare. You talk about government interfering in health care??? Nothing like what U-Care or Blue Plus does. Those are your only choices if your over 65, and you have to decide do you want hospitalization or medications. One denies medication, one denies hospitalization. The doc says you need to stay in the hospital another 3 days, U-Care kicks you out. The doc says only one drug will make you better, Blue Plus says sorry, we won't pay, and you get worse. If you have money, you don't know the struggles people are really having. And don't tell me the polls say the majority of the country is satisfied. The polls don't talk to folks on Medicare Part D, they don't have phones, they spend their $$$ trying to stay alive.

Posted by: Laurie | Sep 20, 2009 11:42:57 AM

"Back to the Future" was not only a good movie, but ought to be the mantra for digging out of this healthcare mess. What was wrong with healthcare in 1950 or 1954. Take it back the way it was, I say. Used to be a doctor patient personal business, now its all strewn with politicians, and HMO middleman CEOs, who obviously add a lot more than 14% in attempting to control the "fee- for-service" models. Best experiment from the past century now proving viable for healthcare is the Mayo Clinics and Mayo medical school. Ask those Mayo folks if they could/would run an "Advantage" program of some sort.

Posted by: styler | Sep 20, 2009 11:49:24 AM

Based on the clips I have seen here, Obama is digging a deeper hole. Should have had the teleprompter with him.

Posted by: Hi | Sep 20, 2009 12:12:07 PM

George finally touched on this, which no one else has, but sadly he was uncharacteristically unprepared. E.G. WHAT Democrat & Republican"EXPERTS" did he get his misinformation from? He needs to check his facts before he publicly proclaims that HMO"S are giving the SAME coverage for less money. This is plainly FALSE. Did he ever ask the REAL experts who have the coverage? If Medicare could, why didn't they in the first place & we wouldn't need HMO's & if they add the missing benefits they'll just be losing MORE money? What's wrong with this picture? P.S. Anybody notice the irony of: right below these comments is a "Sponsered Link" to Medicare Supplement Insurance. These insurance companies are going to get rich now. Congratulations AARP. Good Job!!!!

Posted by: Laurie Ivone | Sep 20, 2009 12:52:41 PM

Sounds like the drug companies have a hand in Obama's pockets, Cutting Medicare to fund prescription drugs,and saying you will get better health care? More smoke and mirrors from the Obama Administration.

Posted by: Marion | Sep 20, 2009 12:54:38 PM

This is a complete and total war on the elderly. Call it what is is Obama... you want the elderly gone and out of the way.

Posted by: Jon | Sep 20, 2009 1:00:11 PM

Did anyone hear what was said? Medicare is broken, to pieces when Bush got the insurance companies involved. Specifically Medicare part D. Why are you so against fixing this?? If your elderly don't let people scare you, any changes can only make your life easier. Believe me I deal with this monster every day, we need to move this forward.

Posted by: Laurie | Sep 20, 2009 1:23:29 PM

Laurie Bush was just as wrong for pushing Medicare part D as Obama is pushing for an entire overhaul of healthcare. My mother pays more now for drugs than she did before with Medicare and supplimental insurance thanks to Medicare part D. Plus it is more confusing to understand. Nothing Obama proposes is going to be easier. The country is broke. They won't fix the system that led to the economic failure. Obama is bailing out his friends in government and the unions, the people who got him to power. That is all he is seriously interested in. Everything else is smoke and mirrors. The Democrats are being played, the Republicans are being played the taxpayers in general are being played. Jobs in this country are provided 80% by small business and Obama and his minions have done absolutely squat to help them survive. As long as you are a too big to fail corporation with ties to Unions and the Fed you are worth saving. It not, oh well. Medicare is not going to be fixed, this year or any other...

Posted by: Michael | Sep 20, 2009 2:02:18 PM

My opinion: If everyone who is against "fixing" this healthcare mess had to give up their healthcare insurance (until a resolution was found), we may be able to get something accomplished.

Posted by: Darlene | Sep 20, 2009 3:22:25 PM

People have looked at this preventive care idea. IT DOESN"T WORK. The reason is that the money to do this ends up being spent looking at 99 out of 100 absolutely well patients. Obama is the most deceptive politician in years. He cannot be trusted to tell the truth about anything.

Posted by: brian | Sep 20, 2009 3:34:39 PM

Obama lied again. Never in the history of government has anybody been able to reduce fraud and abuse. He full well knows this yet keeps on with the illusion. I am so sick of his deceptions.

Posted by: brian | Sep 20, 2009 3:37:05 PM

And they wanted to quickly pass this bummer of a bill in August before they even had a bill or anyone knew what was in it. It's - pass this now and we will work out the details later and decide what we want in it. Not acceptable!

Posted by: mvale | Sep 20, 2009 3:42:23 PM

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