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Topics: Obamacare

House hearing highlights big cuts in Medicare Advantage under Obamacare

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Politics,Congress,Susan Ferrechio,Obamacare,House of Representatives,Health Care,Medicare and Medicaid,PennAve,Fred Upton

Republicans and Democrats on Wednesday battled over the whether the new health care law will destroy or improve a popular Medicare program during one of four House hearings this week into the troubled Obamacare.

The Affordable Care Act slashes $716 billion from Medicare over the next decade, with $308 million cuts coming from Medicare Advantage, a managed care program that enrolls more than a quarter of all Medicare users.

Republicans on the House Energy and Commerce Committee charged in the hearing that cuts in the Medicare program will result in seniors losing access to their doctors as doctors are being dropped from the program to help cut costs.

"It's clear the Medicaid Advantage program is under attack and these beneficiaries are beginning to feel the affect of more than $300 billion in direct and indirect cuts under Obamacare," Rep. Phil Gingrey, R-Ga., a physician, said. "Individuals are losing coverage that they are happy with and the doctors with whom they are comfortable with, and this is a tragedy."

But Democrats argued that the health care reforms are actually preserving Medicare Advantage and will improve it offering new benefits like free check-ups while lowering costs of procedures like chemotherapy.

Horror stories of dropped doctors and lost coverage are vastly overstated by "fear-mongering" Republicans, Democrats argued.

"The Republicans basically think the Affordable Care Act is the end of the world," said Frank Pallone, D-N.J., the top Democrat on the Energy and Commerce health subcommittee.

According to the Kaiser Family Foundation, about half a million Medicare Advantage users will lose their existing health care plans in 2014, which in many cases will necessitate switching doctors.

The Center for Medicare and Medicaid Services reported in 2010 that cuts to Medicare Advantage under the new health care law will result in as much as a 50 percent decline in enrollment in the program as the government terminates contracts with doctors and seniors are forced back to traditional Medicare.

In New York state, for instance, UnitedHealthcare cut 2,100 doctors from Medicare Advantage, leaving about 8,000 patients scrambling for new care.

Republicans argued that the changes violate President Obama's often-repeated pledge that no one would lose their doctor or insurance plan under the new law.

"Reports confirm that many Medicare Advantage enrollees will see a change in their provider network as a result of the new law," House Energy and Commerce Committee Chairman Fred Upton, R-Mich., said. "Americans deserve to know why their existing coverage is changing when they were promised otherwise."

Medicare Advantage, which enrolls about 14 million people, was created in 1997 under then-President Bill Clinton and was amended in 2003 by Republicans to include a prescription drug program. The program offers more benefits than traditional Medicare and requires less cost sharing but is more expensive for the government, which pays more per beneficiary.

The health care law aims to lower the cost of the Medicare Advantage program, supporters told the committee. Those savings would be used to expand Medicaid and health insurance subsidies for the poor, and its backers claim it will help keep Medicare financially solvent.

"Savings secured largely from Medicare Advantage payment adjustments are producing positive returns for the Medicare program overall, benefitting both current and future beneficiaries," said Joe Baker, president of the Democratic-leaning Medicare Rights Center.

Baker said the higher cost of Medicare Advantage drives up the cost of premiums for those signed up for traditional Medicare.

Baker also argued that Medicare Advantage enrollees are bombarded with too many choices in health care plans and would benefit from a narrowing of options.

"They have too many choices," Baker said.

Republicans invited their own experts to testify, including prominent Obamacare critic Douglas Holtz-Eakin, president of American Action Forum and a former Congressional Budget Office director.

Holtz-Eakin noted that the the majority of Medicare Advantage are low income seniors and those experiencing the cuts in the program the most directly live in rural areas.

The cuts to Medicare Advantage will worsen the damage to the program over time, Holtz-Eakin argued, not only with reduced doctor networks but a reduction in the kind of benefits and care that make the program a success.

A study by Boston Consulting Group that was presented at the hearing concluded that Medicare Advantage produces “better health outcomes” than traditional Medicare, in part because Medicare Advantage offers more comprehensive and coordinated care for patients.

"Much of Medicare Advantage's value is based on the plan's ability to innovate and offer needed additional benefits," Holtz-Eakin said, "both of which are compromised in the face of large payment rate cuts."

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Susan Ferrechio

Chief Congressional Correspondent
The Washington Examiner