President Obama's repeated pledge that senior citizens would not lose benefits under his proposed cuts to Medicare has been officially contradicted by an independent congressional analyst whose dire prediction could put the latest Senate health proposal in jeopardy.
The $856 billion health care reform bill now being drafted in the Senate Finance Committee would be paid for in part by slashing $125 billion from the Medicare Advantage program, which is used by about 9 million people, or nearly 20 percent of all Medicare recipients.
The cuts would come from the additional benefits Medicare Advantage enrollees receive, Congressional Budget Office Director Doug Elmendorf told the committee, and would amount to reducing those benefits by "a little more than half."
Under Elmendorf's estimates, Medicare Advantage enrollees would receive about $42 monthly in additional benefits in 2019 under the current health care proposal, not the more than $84 in benefits they would get without the cuts.
As a result, Elmendorf said, about 20 percent of Medicare Advantage users, approximately 2.7 million, would drop out of the program and would instead use standard Medicare.
Medicare Advantage refers to the various private health care options available through the government-run Medicare system. Often, Medicare Advantage plans include prescription drug coverage and other benefits. Generally, Medicare Advantage plans feature more benefits and lower co-pays than standard Medicare coverage, but include limitations on which doctors and hospitals a patient can visit. Insurers have warned that premiums may go up for seniors enrolled in Medicare Advantage under President Obama's health care reform proposal. The president has promised seniors will continue to receive the same level of coverage after reform is passed.
"Because the competitive bidding process would reduce the benefits that would be made available, fewer would choose Medicare Advantage and more would choose fee-for-service," which is standard Medicare, Elmendorf said.
One Democrat, Sen. Bill Nelson, of Florida, will offer an amendment to protect Medicare Advantage benefits, and at least one other Senate Democrat may be prepared to vote against the bill if the cuts go through. That could put passage in jeopardy, because no Republicans on the panel are likely to back the plan.
"I have real doubts that Congress ultimately will take as large a cut out of Medicare Advantage," said Joseph Antos, a health care scholar at the free-market American Enterprise Institute. "You are going to take 20 percent of the Medicare population, who are probably more active voters than the average Medicare beneficiary, and tell them that you can't have what you had last year. President Obama is telling you you can't keep what you want."
But without making drastic cuts to Medicare, Democrats are left without enough money to fund the massive reform plan.
"If they don't make the cuts, where are they going to get the $120 billion?" said Bob Laszewski, president of Health Care Policy and Strategy Associates. "There is pretty good agreement about what the benefits of health insurance should be, but where there really isn't agreement is how they are going to pay for it."