Obamacare’s Reviled Medicare Cuts Have Turned Out Better Than Expected

While glitches continue to trouble insurance exchanges, another controversial part of the law has been a surprising success

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People show their support for the Affordable Care Act during a rally in front of the Stephen P. Clark Government Center in Miami, on Oct. 10, 2013.

While the new Obamacare insurance marketplaces have been plagued by dysfunction, an existing coverage program curtailed by the health care law appears to be working quite well. In fact, it’s even more attractive to consumers than before reforms put in place by the Affordable Care Act (ACA).

Back in 2009 and 2010, one of the harshest criticisms of President Obama’s health care law was that it would hurt seniors. The law’s $700 billion in cuts to Medicare over 10 years would deprive seniors of benefits and choices, critics said. Of particular concern was the plan to cut more than $100 billion out of a quasi-governmental program called Medicare Advantage, which allows seniors to get government-funded private insurance plans in place of traditional Medicare.

Four years later, with the ACA in place, it appears that worries about the future of Medicare Advantage have not come to fruition — at least not yet. The program is more popular than ever. Between 2010 and 2013, enrollment in the program increased 30%, defying the expectations of some of the top policy experts in Washington.

But Republicans have not given up. Some still say the program is in jeopardy thanks to Obamacare. “The chances are that soon [seniors] will open up the mail to the bad news that your Medicare Advantage … has been changed in a negative way for you because of Obamacare,” said Senator Marco Rubio recently, even though premiums, plan choices and benefits under Medicare Advantage have remained stable even with less money for the program.

(MORE: Obamacare Chief Defends Rocky Start on The Daily Show)

“So far, the concerns have not been borne out,” says Tricia Neuman, a senior vice president at the Kaiser Family Foundation who studies Medicare Advantage. “Enrollment continues to climb. Some of the forecasts have predicted that plans would pull out and people would drop out — so far it hasn’t happened.”

When Medicare open enrollment begins on Oct. 15, the approximately 14 million seniors who choose Medicare Advantage will find options that are, in many cases, better and only marginally more expensive than in the past. According to the U.S. Department of Health and Human Services (HHS), which oversees Medicare, the average Medicare Advantage monthly premium will increase only $1.64 in 2014, compared with in 2013. Of benefits and cost sharing, Gretchen Jacobson, also of Kaiser, says, “We haven’t seen dramatic changes.” Authors of the ACA originally targeted Medicare Advantage for cuts because the federal government was spending about 14% more per enrollee in the program than for those enrolled in standard Medicare. The ACA’s cuts to the program began in 2012 and will continue until 2017.

But the program has been cushioned by a new HHS initiative that awards bonus payments to insurers selling higher-quality plans. While the bonus program was authorized by the ACA, the federal government increased its funding in 2012, drawing scrutiny from the Government Accountability OfficeSome Republican lawmakers accused HHS of trying to mitigate negative effects of the ACA cuts before the 2012 elections. The payments may have softened the effects of cuts to Medicare Advantage, but the bonus payments totaled less than half of all cuts to the program so far under the ACA, according to Jacobson. In addition, the bonus payments may be responsible for the fact that more seniors will be enrolled next year in plans receiving four of five stars, in an HHS rating system, than in 2013.

While the full impact of Obamacare on Medicare Advantage cannot be measured until 2017, when all new cuts are in place, it appears that so far, the program has not suffered because of the law.

VIDEO: TIME Explains: The Obamacare Exchange Marketplace

38 comments
KimConant
KimConant

This article completely misleads the reader into thinking that the ACA has not and will not negatively impact the wallets of Medicare patients. The co-pays and out-of-pocket expenses for the same plans both my father and I have increased, increased approximately 20% from 2013 to 2014.

retha
retha

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America-is-a-sinking-ship
America-is-a-sinking-ship

"cuts turned out better than expected" better huh? Better for who?  Guess Mark Rubio was right after all....My 73 yr old mother in law just recieved a letter in the mail saying she now has to pay an additional $300.00 in prescriptions. In addition to that expense, her suppemental insurance premium will be going up.   Her only income is her $996 Social Security check.   Unfortunately the US has over 50% of its population receiving some sort of government assistance so the worst is yet to come.  GOD HELP US ALL!

RonaldWyman
RonaldWyman

he is calling in the private sector to help. what a joke. come and help me and I will stick it in your a..

DennisByron1
DennisByron1

The author's "at least not yet" are the operative words here. Although most of the cuts to Part C have kicked in, the effect on public Part C Medicare Advantage health plans predicted by the Medicare actuary (not by Republicans) has not been substantial because the Obama administration chose to put off the inevitable: 

(1) it replaced the cuts with a bogus bonus program and 

(2) it delayed by a year the way the bidding benchmark is set. 

Still this year there are many stories about prices doubling. All the averages from the left-wing Kaiser operation quoted in this propaganda piece are nonsense.  What my insurer did was keep the premium the same but doubled the annual out of pocket limit. That's effectively doubling my premium without changing "the average."

golf7buddy
golf7buddy

Last hurrah by Times supporting their demi-God - Obama. If you take 750 B from the Medicare program, Times is trying to tell us that it will not affect the outcome. This must be the new fuzzy logic. Put less and take more out. Only Obama can do it.

Marry
Marry

This is crap.  All of a sudden there are major job losses in the medical sector directly related to Obama Care.  Check the facts.  Obama Care is strangling medical access, not expanding it...

monte4811
monte4811

This must be the Republican's biggest nightmare. That the aged and poor would actually benefit from Obamacare.  

barneydidit
barneydidit

Marco Rubio- "The chances are that soon [seniors] will open up the mail to the bad news that your Medicare Advantage … has been changed in a negative way for you because of Obamacare,".  

So according to Rubio, we need to scrap Obamacare because MAYBE, some seniors MAY find someday that the government-sponsored healthcare coverage they receive has been modified in some way that MAY be negative...and that scenario is SOOOO much worse than 40 million U.S. citizens having no healthcare at all without Obamacare?  Oh...I forgot...seniors are a core constituency for Republicans, especially those representing Miami. 



harte.ryan
harte.ryan

If you were one of the few people who actually investigated the ACA, it wouldn't be a surprise at all.

leonvang
leonvang

BUT, BUT, BUT  Romney and Ryan swore that the Black man in the White House stole 716  billion dollars from Medicare including Ryan's elderly and retired mother. You know if they said it was true!

marsupial32
marsupial32

This article contains misinformation, intended or not; I have
Anthem Blue Cross Senior Advantage PPO and I was told last week that my monthly premium is going from $28 per month to $80! This may not seem like a lot but to a person who is retired with an almost extinct  retirement account +SS it is a lot.  When a friend of mine signed up with Anthem in 2012 there was no premium, then when I signed up in 2013 there was the $28 premium which, all things considered, I thought was really great.  That was then, this is now--Thanks Obama. You lied to American seniors--again. I expect that next year there will be an increase in the deductible and other increases down the line or cuts in what is covered.  I hope some people benefit  from the "Affordable" Care Act.

gitmoray
gitmoray

What a total crock of S*&%. Whoever wrote this piece either works for HHS or was paid to write a puff piece and has not seen reality. As the ACA was written, the first reimbursement reduction to the private companies operating Medicare Advantage was supposed to happen 2 years after the law's approval, which would have been the Summer of 2012. As we approached that Summer, craftier heads realized that Medicare Advantage reimbursement reductions would cause reduction or rate increases for benefits , and that these changes would become obvious to seniors by October 15th 2012, the start of Medicare Open Enrollment and just three weeks before the election.

This was one of the first changes ordered by our fearless leader to his shiny ACA law. The scheduled reimbursement reduction was postponed for a year, as angry seniors massively complaining about their Medicare Advantage plans would have doomed his reelection chances.

The writer says, the negative effects “Have not been felt – yet”...keep tuned. This year's crop of Medicare Advantage plans are creeping toward a $6,700 Out -of-pocket maximum, from an average of $3,400 just three years ago. Premium is not rising, but huge co-payments will do just as much damage.

I hope the writer of this piece is just honestly incompetent, and not a tool of a sinister bunch of hypocrites.  

romano70
romano70

@DennisByron1 Yes, "at least not yet"...as in the GOP's words: "the world will come to a screeching halt and the world's economy will sink into a 1000 years of darkness because of Obamacare".....AT LEAST NOT YET...because the only thing we have to judge these things on is the present, not the future....in spite of the GOP stubborn attack on our country's economy, the recovery is still moving forward, albeit slowly.....republicans have not succeeded in destroying our country...AT LEAST NOT YET

romano70
romano70

@golf7buddy Your nonsense is what keeps the base of the GOP shrinking...you are responding with stupidity to a well written, articulated, article that is filled with DATA and FACTS....your nonsense on the other hand...and you think none of us see the ridiculous behavior you guys engage in???

romano70
romano70

@Marry And you base this statement on WHAT, exactly? My insurance has never been easier to understand since there are no pre-existing conditions.....and premiums are going down...what state do you live in, a RED STATE??? NO WONDER!!!!!

LibelFreeZone
LibelFreeZone

@monte4811   The nightmare will be realized by the young and healthy, who will be paying much higher premiums to cover the aged and poor.  Then we'll see what the youngsters think about voting for Baracky Owebama--twice.

golf7buddy
golf7buddy

@swagger - It is reality. Just check the opinions expressed by various countries and you will see a trend. Loss of trust in the Govt. and lack of leadership by the President. Putin is smiling these days - remember the licking he gave to USA on Syria - an abject lesson.

DennisByron1
DennisByron1

@marsupial32  Thanks for getting the word out there.  Hazeanddrizzle and leonvang are clearly not on Medicare and do not know what they are talking about. 

Hazelanddrizzel: when you are on public Part C Medicare Advantage, you can't just "go back to Medicare" without potentially losing your life's savings. 

For starters, you cannot buy Medicare Advantage unless you are on both Parts (A and B) or Original Medicare arleady, so you are already paying $105 a month. Then you need a private Medigap plan (average cost around another $100 a month, much more expensive in the Northeast). Then you need a standalone Part D drug plan (average cost: $35 a month). So now you're up to $230 a month and yet 

 unlike with Part C Medicare Advantage -- you no longer have an annual out-of-pocket limit, you probably lost an annual physical and related testing (Original Medicare has some useless testing, like free pregnancy counseling, mostly not annual), you probably have a much higher hospital deductible, you probably lost hearing and vision testing

Learn something about the subjects you want to comment on. Or be like leonvang and just put a lot of stupid question marks in your comment

customer
customer

@marsupial32 It's a shame you can state facts and people do not believe you!  I am in the same position as you and have already been notified my premium will go up $15.00 for next year.  Guess when it actually effects them personally they will understand.


leonvang
leonvang

@marsupial32 - Hey Bud Medicare Advantage and all those other privately run Medicare plans are not free . They get a healthy cut from Medicare for administration and offer benefits not included in Medicare. Are you one of the 49% who want Medicare to pay for nearly everything? Free gym memberships and scooters??????????

HazeAndDrizzle
HazeAndDrizzle

@marsupial32 Then go back to regular medicare and stop sponging off the government if you are going to complain about it.

mak4374
mak4374

@gitmoray Well, you convinced me. You know.  Because you said so.  Because this writer's job is not on the line if she got it wrong, writing a story for her own purely ideological reasons.  Unlike you, who did the thorough researcher of "Pulled it out of my @##, so there!"  I guess first thing in the morning I will have to call my congressman and tell him he should engenger the whole world economy by holding it hostage over my telephone call, because, you know, you said so.


I just wonder, how did all those who predicted doom n' gloom over the passage of every law aspiring to minimally help those very people making the predictions, rationalized their previous predictions when they did not come to pass?  Just remember, oh contributor, you own statements of certainty. 

barneydidit
barneydidit

@gitmoray Wait....alienating seniors would have doomed Obama's re-election plans? Which is the party of old white people again?

DavidWhittington
DavidWhittington

@romano70 @DennisByron1  romano my boy:  What are you - a paid schill for the Marxist Obumblecare trainwreck rumbling down the tracks ?  Here are some FACTS for you:  current US debt is $17 trillion.  Add in current unfunded Social Security and Medicare entitlements and the REAL effective current debt is over $50 trillion.  Now add in Obumblecare future entitlements and the US national debt balloons to $70 trillion.  ALL these unfunded entitlements will very soon consume the ENTIRE US budget - with absolutely NO money left for education or the military or anything else.  Keep beating your silly Marxist Obumblecare drum as the US collapses under the weight of its own debt.  Marxism has NEVER worked anywhere in the world and it certainly won't work in America.

romano70
romano70

@LibelFreeZone @monte4811 Hey genius, that is what INSURANCE DOES.....insurance is not a 401K account where you get what you put into, insurance is about spreading the RISK...it's like talking to walls, I swear!

barneydidit
barneydidit

@LibelFreeZone @monte4811 Well...my guess is they'll look at the GOP alternative, which currently looks more and more like Ted Cruz, and vote for a Democrat again. 

barneydidit
barneydidit

@LibelFreeZone @swagger Only problem with this video Libfree, is that in the real world, the banker is at least as responsible for the guy's debt as the guy himself is. When the GOP comes up with a viable way to cut the debt, I'm happy to listen. 

LibelFreeZone
LibelFreeZone

@customer @marsupial32   Exactly.  If I was in Republican leadership, I'd tell the Repubs to step aside and let ZeroCare do its damage.  The sooner the better so the nation can feel it.

golf7buddy
golf7buddy

@mak4374 @gitmoray - Hostage taking is a two way street. Why is Senate holding up all the proposals sent by the Congress. I would have to say that the Senate is holding the whole country hostage. And on top of that 'No Negotiations'. What kind of childish play was that. After all that grandstanding, Obama and Reid are finally at the Table negotiating. It could have been done days ago and we could have avoided the minimal pain of partial shut down. In fact, there would have been no pain except at the specific instructions from the White House to inflict max pain to the Public. Leadership is totally lacking in DC.

mak4374
mak4374

@golf7buddy @mak4374 @gitmoray I apologize ahead of time for my aggressive attitude, but I do NOT play the equivalency blame-game very good.  There is a VERY big difference between, "Pass all our demands, plus anything that we might think in the meantime, or we shoot the hostage; and by the way, we really, really want to shoot him anyway", and "Our hostage is starving, so let's negotiate how much you will feed us while we are keeping him alive". 


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