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Battle Lines Are Drawn on 'Medicare Advantage'
January 12, 2009 7:56 PM
ABC News' Teddy Davis and Ferdous Al-Faruque Report:
The insurance industry put Barack Obama on notice on Monday that it will oppose the president-elect's effort to eliminate the Medicare Advantage program.
"It's important to keep in mind the impact that cuts to the program will have to seniors," said Robert Zirkelbach, director of strategic communications for America's Health Insurance Plans. "Medicare Advantage cuts could mean reduced choices, reduced benefits, and higher out-of-pocket costs."
The insurance industry's spokesman was responding to comments Obama made this weekend to ABC News' George Stephanopoulos.
Asked how he would pay for his health-care program, Obama identified Medicare Advantage as a program he would like to cut.
"We are spending a lot of money subsidizing the insurance companies around something called Medicare Advantage, a program that gives them subsidies to accept Medicare recipients but doesn't necessarily make people on Medicare healthier," said Obama.
"And if we eliminate that and other programs," he continued, "we can potentially save $200 billion out of the health care system that we're currently spending and take that money and use it in ways that are actually going to make people healthier and improve quality."
Sunday was not the first time that Obama has targeted Medicare Advantage. He also cited it as a potential cut during his third debate with John McCain.
Under the Medicare Advantage program, the government stops acting as the insurer and instead pays private insurance companies an average of $9,000 a year for each person who enrolls in either an HMO, PPO, or fee-for-service plan. Many of the private plans operating under Medicare Advantage tout coverage of services like vision, hearing, and dental that are not covered under traditional Medicare.
The plans have been criticized, however, for engaging in hard-sell tactics that lead some seniors to sign up for Medicare Advantage without being aware of the program's coverage limits or that a particular family physician may not participate in the chosen private insurance network.
To oppose Obama's plan to eliminate Medicare Advantage, the insurance industry plans to mobilize what it says are 750,000 seniors enrolled in the "Coalition for Medicare Choices."
"We have a grassroots coalition of seniors enrolled in Medicare Advantage who are satisfied with their Medicare Advantage benefits who continually reach out to members of congress to share their experience," said Zirkelbach. "We are going to continue to highlight the added benefits and added value these plans provide."
UPDATE:
Bill Novelli, the CEO of AARP, has just weighed in.
Novelli, who says AARP has a lot of members enrolled in Medicare Advantage, would not like to see the program eliminated.
He agrees with Obama, however, in thinking that insurers who participate in Medicare Advantage are being overpaid.
"They are being paid too much and we need to level that playing field," said Novelli. "Our point of view is: let's get the cost balanced, let's get the cost down. It's not a question of eliminating it."
Novelli spoke with ABC News on Tuesday, Jan. 13 after participating in a Divided We Fail event promoting health-care reform.
January 12, 2009 | Permalink | Share | User Comments (9)
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It will be cut.
Posted by: Amoreena | Jan 12, 2009 8:23:11 PM
What a shocker - insurance companies are going to oppose Obama cutting into their gravy train. Is anyone surprised?
Posted by: jhw539 | Jan 12, 2009 8:28:34 PM
Another example of PEBO not knowing what he is talking about. It is not a subside if an individual is taking off the medicare rolls and handled in the private sector. What is the average amount spent a on medicare participate? When you jump into an issue without really understanding it you through a number of people into a panic.
Posted by: William | Jan 12, 2009 9:38:19 PM
In many cases it is just another insurance company rip-off. Not sure how anyone can tell if the "advantage" program is really needed in any case. I know of many refusal payments by these companies and would never use one myself, but I need no extra coverage so far since I am rarely ill at all.
Posted by: jeanned'arc | Jan 12, 2009 10:31:23 PM
"Medicare Advantage" is the ultimate in oxymorons:
1. They cost the government more to administer than Medicare.
2. There is ZERO evidence that they provide better care for patients.
3. They sucker patients into thinking they are paying less than Medicare but most seniors end up paying more.
4. They reimburse physicians less than Medicare (which already is a joke), delay payments to physicians by 30 days or more, and increase administrative costs to physician practices.
So, let's add the above up: Government pays more, patients pay more, physicians pay more. Well then who gets all the money? Seems like it all goes down the insurance companies greedy throats...
The very first thing that Congress should do on the healthcare front is eliminate these programs. No need to incorporate it into a larger bill where the lobbyists might save them. This is a glaring example of wasteful spending.
Posted by: doc | Jan 12, 2009 11:12:55 PM
Spreading the wealth!!!!!!!!!!! What many don't realize is that Americans on Medicare who have worked have paid Insurance Premiums for Medicare. Unlike the Medicaid program which is a free handout for those who refuse to work!!!! More money could be saved by making congress pay for their free medical and retirement system
Posted by: jb1879 | Jan 13, 2009 5:59:16 AM
Go ahead and revoke the Medicare Advantage Plan and let millions of seniors experiance our wonderful Democrats at work. What is their solution? I still have not heard anything but "change". Unfortunately the ones who will get hurt are the fixed income seniors barely above the poverty line that would reverted back to Original Medicare with higher out of pocket costs and less benefits. Sometimes you get what you vote for America.
Posted by: Concerned Senior | Jan 16, 2009 5:26:56 PM
As somebody who works for a small MA owned by a doctors group, we've expected the cuts. And, I think it should be. But, most seniors love our plan. It's a hell of a lot better than Medicare.
I hope Obama isn't using this economic crisis as an excuse for government control of vast chucks of the U.S. economy. I'm "fearing" "change" from the Chicago street thug.
Posted by: Work for MA | Jan 22, 2009 12:45:28 AM
Yes, he needs to cut Medicare Advantage. It is nothing more than another for-profit insurance rip off of the consumer. Not only are we subsidizing these ghouls enormous amounts of money, their clients are also required to pay big time, in addition to part B. Looking over the plans, I note that all my medications will be more difficult to obtain and cost twice as much as they do now.
The problem of course, is doctors and clinics will turn you away once you reach 65 if you do not subscribe to one of THEIR accepted Medicare Advantage programs.
Obama is right. This is a rip off that needs to end. Increase payments directly to doctors and hospitals and stop feeding the middleman ghouls!
Posted by: Cheryl F | Oct 16, 2009 8:23:35 AM
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