Socking It to the Poor
On February 15, the Centers for Medicare and Medicaid Services announced its intention to reduce payments to Medicare Advantage (MA) plans by 7 to 8 percent in 2014…
More than 14 million beneficiaries enrolled in MA plans will be affected in some way by this cut. Low-income beneficiaries have the most to lose. According to America’s Health Insurance Plans, the insurance industry trade association, 41 percent of MA enrollees in 2011 had incomes of $20,000 or less. Medicare Advantage is attractive to those with low incomes because private plans offer a better deal.
This is an interesting twist, but again I am not surprised, I am guessing the funding will be diverted into building the health exchange. After all, this might be a move to import that population into the health exchange system.
The poor seem to repeatedly be on the losing side of President Obama’s policies.
I agree with Jamison. Democrats and their policies inadvertanly keep poor people in poor environments.
Medicare Advantage (MA) plans tend to cover lower income people who value the security of lower cost-sharing. Democrats cannot overlook the slightly higher cost (13% more than traditional, Fee-for-Service Medicare) — even though the MA plans pay nearly $1000 more in benefits to the enrollee.
It is really unfortunate that Obamacare scales back payments to one service that actually offers some sembelence of choice and competition. MA doesn’t cover everything, and most need supplemental insurance in addition to MA. We should expand MA, not reduce its funding.
In Russia, we dabbled with socialism and central health care. Now, we are the broken remnants of the Kremlin, struggling to offer the care that is offered here in America. I am saddened to see the high level of care in America slip as Obamacare takes effect. Unforunately, history does repeart itself.
If I was Medicare aged and had no children at home, no debt, and no mortgage my expenses would be much different, perhaps 20,000 a year is not poor, relatively speaking of course.
I am not calling these MA Beneficiaries rich, but they might be doing just fine on 20K a year.
Since the government defines poverty by your income and not capital gains, I think a lot of the 41% are not really poor. They are seniors with no debt, no job income (retired) and a lot of assets and investments.
Robert, medicare aged, no children and no debt sounds like an amazingly small bit of the market.
Or something to aspire to 🙂
John, the percentage of seniors who have enough assets and investments to sustain these sorts of cuts is very large. People capable of living off their principle drops off sharply at the top 1%
I feel myself sinking into sensationalism, but I feel that the poor will remain poor because of – not in spite of – welfare policies. The Democrats work hard to keep the poor as they are – else their services are not needed.
There is some misinformation in these comments about Part C Medicare health plans (although some of it seems to come from the extraordinary high number of sycophant trolls this blog attracts)
1. Obamacare is not cutting Part C Medicare incentive payments to build exchanges; Part C is an exchange. Obamacare is cutting Part C Medicare incentive payments to fund Obamacare. Obamacare takes money from the Medicare trust fund and annual revenue streams. Whether Part C beneficiaries should have received these incentives in the past is a worthy debate. That the money should be taken away from the trust fund is not debatable. It is criminal.
2. The claim that Part C Medicare health plans cost 13% more than fee for service Medicare may have been true sometime in the past but was not true in 2012 (see Chart 9-6 in the June 2012 MedPAC Databook). The uplift was 7% in 2012 and would have been less except that the Obama administration (illegally according to the GAO) devised a Part C Medicare demonstration bonus program for 2013 and 2014 that gave just about everyone a bonus. (See MedPAC chairman’s testimony on March 15, 2013 to the relevant House subcommittee for more details. This everyone-wins bonus program is discussed both in the opening statement of the chairman and in the Q and A of the hearing.) Current projects are the uplift will be zero as soon as next year and no later than 2016. The uplift is not split equally among types of Medicare Part C plans; HMOs and Regional PPOs deliver much better bang for the buck than Local PPOs and the incredibly odd idea of capitated FFS. (Whether these percentages include risk adjustment payments is unclear from the MedPAC Databook.)