Editorial: Obama weakens his health reform
President Barack Obama speaks to a joint session of Congress on the need for health care reform back in 2009 (Sept. 9, 2009). Credit: AP
President Barack Obama is playing politics with Medicare.
After pushing reforms in the Patient Protection and Affordable Care Act that would cut excessive payments to Medicare Advantage plans run by private insurance companies, he has backtracked to the tune of $8.5 billion over 10 years. Bonus payments that were supposed to be reserved only for those plans that deliver the highest quality care -- as an incentive for others to adopt best practices -- instead are going to almost all of them.
That's one way to avoid benefit cuts or premium increases in popular Advantage plans that would be sure to rile elderly voters in this election year. But it's no way to control Medicare spending, corral budget deficits or contain health care costs.
And it's no way to improve the quality of health care, according to the Government Accountability Office, which took a look at the current bonus structure and reported recently that it leaves no way to evaluate the effectiveness of the payments.
Obama should abandon this transparent attempt to stall most of the cuts slated for this year. He should go back to paying bonuses only to the companies that provide the highest quality care, the arrangement called for in the Affordable Care Act.
Since 1997, when the Medicare Advantage program was launched, the federal government has paid about 12 percent more to cover a Medicare beneficiary enrolled in one of those plans than it does to cover an individual in the traditional Medicare program. As a result the Medicare Advantage plans are able to offer extras, such as vision and dental coverage, additional days of hospitalization, or reduced premiums. So it's no surprise they're popular.
About 12 million of the 49 million Medicare beneficiaries are enrolled in one of the plans offered by 175 insurance companies around the nation.
But the deficit-challenged federal government can't afford to continue paying private insurers for extras it doesn't provide via traditional Medicare, no matter how popular the plans have become. The Affordable Care Act's prudent Medicare Advantage reforms would cut payments to the plans by $145 billion over nine years.
The administration shouldn't chip away at those important savings, particularly in a blatant bid to curry election-year favor.
