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February 01. 2012 10:58PM

Medicare & Obamacare: Going the wrong way

Medicare Advantage (a Medicare option in which private insurers compete for business by offering a variety of coverage and price choices to Medicare enrollees) is becoming cheaper and more popular, concludes a U.S. Department of Health and Human Services report released Wednesday. That is the opposite of what the Obama administration predicted would happen when pushing Obamacare, which slowly starves Medicare Advantage of funding.

Last year, Medicare Advantage premiums fell 7 percent and enrollment grew by 10 percent. In the past two years, premiums fell by 16 percent and enrollment grew by 17 percent. Medicare Advantage is now chosen by about a quarter of those enrolled in Medicare. And yet, the Obama administration is proceeding with plans to cut its funding as a means of encouraging people to enroll instead in traditional Medicare.

Obamacare slowly reduces Medicare Advantage spending from this year through 2017 and uses that money instead to finance traditional fee-for-service Medicare. Insurers paid through Medicare Advantage will have to reduce coverage and raise prices. Thus, millions of people who choose Medicare Advantage will switch back to old-fashioned Medicare. (A Heritage Foundation study concluded that 46 percent of Granite Staters who now choose Medicare Advantage will lose it because of Obamacare funding cuts.)

What does Obamacare do to the old-fashioned Medicare it pushes people back into? It increases Medicare taxes and premiums for people earning more than $200,000 a year. If Medicare costs continue to rise (the Congressional Budget Office projects that federal health care spending will rise by 8 percent in the next decade, and half of that will be driven by Medicare), then Obamacare authorizes the Independent Care Advisory Board to find and recommend Medicare cuts.

In short, it does the opposite of what Medicare Advantage is doing: It spends more while limiting choices. This is the Obama administration at work, ladies and gentlemen.


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