Health Care Overhaul Plan Breaks Promises to Seniors

Published November 6, 2009

President Barack Obama has promised that if you like the health coverage you have now, you can keep it. Medicare beneficiaries across the country, including nearly 900,000 in my home state of Wisconsin, have voiced their legitimate skepticism toward that promise.

So the president took it a step further, telling seniors at a recent AARP event, “Nobody is talking about cutting Medicare benefits.”

Yet again, we find a yawning gap between the president’s rhetoric and the actual substance of the legislation being pushed through Congress.

In order to pay for the trillion-dollar health care overhaul making its way through Congress, hundreds of billions of dollars will come from new tax hikes, hundreds of billions of dollars will be borrowed, and hundreds of billions of dollars will be cut from Medicare. The president promised not to cut Medicare benefits, but the proposed bills do exactly that.

Big Cuts in Medicare Advantage

Testifying before the Senate Finance Committee, Congressional Budget Office (CBO) Director Doug Elmendorf stated Medicare cuts “would reduce the extra benefits that would be made available to beneficiaries through Medicare Advantage plans.”

The CBO has previously stated these Medicare Advantage cuts “could lead many plans to limit the benefits they offer, raise their premiums, or withdraw from the program.” Specifically, Section 1161 of HR 3200 (page 331) cuts $156.3 billion from Medicare Advantage.

As a practical result of this legislation, an estimated six million current Medicare Advantage beneficiaries no longer would be able to afford their current plans or would lose access altogether.

Medicare Advantage fills gaps not covered in traditional Medicare benefits, utilizing approved private plans to offer seniors additional benefits at lower costs. Emphasizing integrated and preventative care, Medicare Advantage tailors benefit plans to patients’ needs.

This innovative delivery of coverage and care is a favorite target of Washington. In 1997, a similar option, then called Medicare+Choice, was made available to seniors. But year after year, the reimbursement rates were cut for these plans, making it increasingly unattractive for private providers to offer them. The inadequate federal reimbursements forced thousands of seniors in Wisconsin to be dropped from their plans.

Painful Consequences, Vocal Anger

I held multiple Medicare town hall meetings for those hit hardest by these decisions, and I vividly recall the difficult experiences shared by seniors in the area. The consequences were painful, and the vocal anger was justified.

In 2003 the program evolved into what is now known as Medicare Advantage. Nearly a quarter of all Medicare beneficiaries in Wisconsin, including a disproportionate number of African-Americans, Hispanics, and seniors living in rural communities, have enrolled in Medicare Advantage plans. There are also countless “snowbirds” who reside in warmer climates in the winter who have made clear to me their preference for Medicare Advantage plans.

One of the obvious advantages of this program is seniors need only pay one deductible and one form of co-pay, while all of Medicare’s component parts (Part A, B, C & D) are folded into one integrated program.

Yet despite the increasing popularity of Medicare Advantage and the president’s promises to protect seniors’ benefits, this patient-centered coverage option is once again on the chopping block.

Gag Order on Insurers

The problem runs deeper than politicians failing to be frank with the American people. The federal government has actively sought to silence providers’ warnings to their customers about these pending cuts.

The Centers for Medicare and Medicaid Services (CMS), a division of the U.S. Department of Health and Human Services, recently placed a gag order on Medicare Advantage providers to prevent them from sharing information with their enrollees about pending changes to their plans. Disregarding private health care plans’ right to inform their enrollees about consequential legislation, CMS has launched an investigation against Humana for mailing a factually verified warning about proposed cuts.

The administration’s actions open an array of troubling questions about both the appropriateness and legality of such political intimidation. In both tactics and substance, the Medicare Advantage issue reminds Wisconsinites of their continued frustrations with how Washington operates.

Medicare Advantage represents a perfect example of how Congress ought to fix what’s broken, rather than break what’s working. I believe Medicare Advantage’s bureaucratic formula hinders true competition, which benefits insurance companies at the expense of seniors receiving the care and taxpayers footing the bill. I have introduced legislation, HR 2520, The Patients’ Choice Act, which includes a provision to force Medicare Advantage plans to compete against each other.

Competitive bidding would allow the market, not a bureaucratic formula, to set reimbursement rates for Medicare Advantage plans.

Serious Issue

Unfortunately, the president and Congress have gone far beyond this common-sense reform, as the legislation being pushed through Congress would increase premiums for seniors dramatically or simply kill Medicare Advantage outright. The 216,615 Wisconsinites and the 10.5 million Americans nationwide enrolled in Medicare Advantage plans deserve better.

There is no doubt health care in America is in need of serious reform. Serious reform requires a serious conversation. Rather than drastic Medicare Advantage benefit cuts, I believe competitive bidding would provide a more equitable and efficient reimbursement mechanism for the program.

Rather than perpetuate false promises, I believe responsible leaders should level with America’s seniors.

U.S. Rep. Paul Ryan ([email protected]) represents Wisconsin’s 1st Congressional District. An earlier version of this article appeared in The Journal Times. Reprinted with permission.