Punch line: The trillion dollar cost of ObamaCare is reportedly funded 1/2 by tax increases and 1/2 by Medicare cuts.
Of the $500 billion in Medicare cuts, 1/2 is cuts in waste & fraud (yeah, right !) and 1/2 by program cuts — the majority of which comes from killing Medicare Advantage – an HMO option to Medicare run by private insurance companies.
The idiocy: Medicare Advantage is a cheaper alternative – about 2% lower cost than traditional Medicare.
Not the way we did it in the companies where I worked …
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WSJ: Farewell, Medicare Advantage, June 11, 2010
Medicare Advantage gives almost one of four seniors private insurance options, and Democrats are about to cut its funding by some $136 billion over the next decade.
The Congressional Budget Office says these cuts will cause enrollment to drop by 35%, the Administration’s own Medicare actuaries predict 50%, and both outfits take for granted that benefits will also decline.
Dems loathe Medicare Advantage because it sanctions the private choices that might eventually liberate the U.S. health market from government control . They also want to raid Advantage to finance their new subsidies.
Here’s the rub.
According to the Medicare Payment Advisory Commission, the Advantage HMOs that serve 15% of all seniors in Medicare cost on average two percentage points less for the same benefits than the traditional Medicare program.
Using government data, the insurer trade group AHIP estimates that Advantage beneficiaries in California spend 30% fewer days in the hospital than fee for service, 23% fewer days in Nevada.
These successes and others have come about because Advantage allowed insurers and providers to collaborate, pay for value and coordinate care.
These successes are threatening to politicians because they are a model for true Medicare reform, which would reduce the health-care powers that Congress has exercised for nearly a half-century and let patients decide.
This terror explains why Democrats are so intent on killing Medicare Advantage, and on blaming someone else for destroying a program that millions of seniors prefer.
The President knows this, so he and his fellow Democrats are gearing up to blame these cuts on . . . insurers, rather than on their own policies.
They desperately want to dodge any near-term blame when seniors who use Advantage start to lose its benefits. Ergo, blame insurers first.
Full article:
http://online.wsj.com/article/SB10001424052748703302604575295021352835874.html?mod=WSJ_Opinion_AboveLEFTTop
Thanks to JJP for feeding the lead.
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From the Homa Files archive:
Medicare Advantage saves money … so cut it to save money. Huh?
https://kenhoma.wordpress.com/2009/09/25/medicare-advantage-saves-money-so-cut-it-to-save-money-huh/
The Homa Files 