Free Markets, Free People


Medicare Advantage: October surprise?

You remember the $500 billion Obama claimed would be “saved” from Medicare to help “pay for” the ObamaCare law?

Well, what that amounted to was slashing subsidies (i.e. reimbursement rates) for a popular supplementary program known as Medicare Advantage.

Problem: doing so will effect 12 million seniors.  Problem exacerbated: Seniors, who resist change especially to their health care coverage, are not likely to be happy.  Problem squared: Seniors will have to select a new program beginning October 15th, a few weeks before the election.

And both political parties know that seniors vote.  You can imagine the negativity of these cuts spreading like wildfire among senior communities in key states.

But, not to worry, our current most ethical and transparent administration in history has a solution:

Call it President Obama’s Committee for the Re-Election of the President — a political slush fund at the Health and Human Services Department.

Only this isn’t some little fund from shadowy private sources; this is taxpayer money, redirected to help Obama win another term. A massive amount of it, too — $8.3 billion. Yes, that’s billion, with a B.

And how will they deploy this money?

Benjamin Sasse and Charles Hurt explain:

But the administration’s devised a way to postpone the pain one more year, getting Obama past his last election; it plans to spend $8 billion to temporarily restore Medicare Advantage funds so that seniors in key markets don’t lose their trusted insurance program in the middle of Obama’s re-election bid.

The money is to come from funds that Health and Human Services is allowed to use for “demonstration projects.” But to make it legal, HHS has to pretend that it’s doing an “experiment” to study the effect of this money on the insurance market.

That is, to “study” what happens when the government doesn’t change anything but merely continues a program that’s been going on for years.

Obama can temporarily prop up Medicare Advantage long enough to get re-elected by exploiting an obscure bit of federal law. Under a 1967 statute, the HHS secretary can spend money without specific approval by Congress on “experiments” directly aimed at “increasing the efficiency and economy of health services.”

Past demonstration projects have studied new medical techniques or strategies aimed at improving care or reducing costs. The point is to find ways to lower the costs of Medicare by allowing medical technocrats to make efficient decisions without interference from vested interests.

Now Obama means to turn it on its head — diverting the money to a blatantly nonexperimental purpose to serve his political needs.

In an era of austerity, an executive department has what amounts to an 8 billion dollar taxpayer funded slush fund and has apparently chosen to use to help re-elect the president?


The good news is because of the attention brought to this ploy, just a couple of hours ago, the GAO spoke out about the planned use of the 8 billion dollars:

In a blow to the Obama administration on Medicare, government auditors Monday called for the cancellation of a costly bonus program for private health plans that congressional Republicans have criticized as a wasteful political ploy.

The nonpartisan Government Accountability Office said it’s not clear that the $8.3 billion Medicare Advantage bonus program will improve quality because most of the money is going to plans just rated average. The auditors did find, however, that the bonuses would temporarily ease the pain of unpopular cuts to insurance plans under President Barack Obama’s health care overhaul law.

The point of course, is it is a deferral of “pain” not any sort of look at an “experimental” means of improving health care.  It is election year politics with an 8 billion dollar price tag.

After all, the plan for ObamaCare was to have all the unpopular aspects of it kick in during 2013, after the election, after the President was unanswerable to the American people anymore and after he was provided with more “flexibility”.

The GAO is careful in its wording but read between the lines here:

GAO, the investigative agency of Congress, did not address GOP allegations that the bonuses are politically motivated. But, its report found the program highly unusual. It “dwarfs” all other Medicare pilots undertaken in nearly 20 years, the GAO said.

Most of the bonus money is going to plans that receive three to three-and-half stars out of a possible five stars on Medicare’s quality rating scale, the report said.

Available through 2014, the bonuses will soften much of the initial impact of the Medicare Advantage cuts, acting like a temporary reprieve.

This year, for example, the bonus program offset about 70 percent of the cuts in the health care law. Indeed, Medicare Advantage enrollment is up by 10 percent and premiums have gone down on average.

Or “Buying Seniors Off Until 2014”.  And yeah, if you’re still wondering, that’s politics.  The emphasized portions of both quotes are all you need to know to understand the “why” of my claim.  That reprieve would keep seniors from taking their angst and anger to the polls in November and the administration is eager to avoid that.

So, in the Chicago way, the Obama administration has figured out how to use tax money to help buy the next election.

Will the administration heed the GAO?  Will it cancel the program?

My guess is no – they’ll delay and prevaricate and do anything and everything they can to avoid killing the program.

At least until after the election.  Then?  Who cares.

Certainly not them.

Seniors, you’re being played for suckers.  You need to realize that.  And vote accordingly.


Twitter: @McQandO