Shortly before his inauguration, President Barack Obama told journalist George Stephanopoulos he was considering eliminating the entire Medicare Advantage program.
Advantage allows seniors to choose a private health plan instead of being forced into the traditional Medicare program. The Left has complained Medicare Advantage costs taxpayers more than if those seniors remained in the traditional Medicare program.
That’s true, but not because government is more efficient than private insurance. The Left’s objection to Medicare Advantage is partly because it poses a threat to their plans for a completely government-run, single-payer health care system. The Left has had to settle for attempting to eliminate the alleged overpayments, and of course one can eliminate Medicare Advantage stealthily by reducing payments to private plans until none will participate.
For Obama to suggest eliminating Medicare Advantage outright, however, is extraordinary.
First, it would go back on a campaign promise that he would let Americans keep their current health insurance. Eliminating Medicare Advantage would force 10 million seniors out of their current health plans and into traditional Medicare, according to Congressional Budget Office estimates.
Second, it’s surprising he would begin a health care reform effort with a proposal to take something away from seniors, America’s largest and most politically active voting bloc.
Eliminating Medicare Advantage would be bad for non-seniors, too, because it would block innovations that make medicine better, cheaper, and safer. The traditional Medicare program’s change-resistant payment system punishes providers for doing such things. Medicare Advantage plans use different financial incentives that actually encourage coordination, EMRs, and error reduction. What a novel thought.
Michael Cannon ([email protected]) is a senior fellow at the Cato Institute.