Suzy Khimm writes:
During the debate over the bill, the Medicare Advantage cuts were at the heart of the GOP’s claim that Democrats were trying to slash entitlement benefits for seniors. [Emphasis added.]
This could very well be true, but I’d like to see attribution or a link. I absolutely believe that opponents of PPACA attempted to use the popularity of Medicare Advantage plans to their advantage (ahem), yet this idea that Medicare Advantage cuts were “at the heart of the GOP’s claim” seems both subjective and contrary to my (admittedly incomplete) sense of the debate. I say this only because Richard Foster, the chief Medicare actuary, has made the following claim, according to Robert Pear of the New York Times:
Mr. Foster says the law will save Medicare more than $500 billion in the coming decade and will postpone exhaustion of the Medicare trust fund by 12 years, so it would run out of money in 2029, rather than 2017. In addition, he said, the reduction in the growth of Medicare will lead to lower premiums and co-payments for Medicare beneficiaries.
But, Mr. Foster said, these savings assume that the law will be carried out as written, and that may be an unrealistic assumption. The cuts, he said, “could become unsustainable” because they may drive some hospitals and nursing homes into the red, “possibly jeopardizing access to care for beneficiaries.” [Emphasis added.]
This sounds like more than cuts to Medicare Advantage plans, and my sense is that many congressional Republicans, and conservative policy thinkers, were at least as exercised by the mechanistic structure of planned cuts to Medicare FFS as they were to the changes to the Medicare Advantage bidding process. That is, they suspected that merely creating IPAB wouldn’t be enough to “buy” structural reform to how medical providers deploy care, and so the planned cuts were more of a wish list a la BBA97 than a realistic plan for containing cost growth.
Their attacks were misleading: Medicare Advantage plans are actually generously padded private insurance plans — a Supersized, more costly version of standard Medicare — that Democrats believed taxpayers shouldn’t subsidize so heavily. But together with the charge that the law would create “death panels,” the outcry over the Medicare Advantage cuts allowed the GOP to convince the public that bill would be a poison pill for the elderly.
That is certainly one way to characterize the debate over Medicare Advantage, but there are other views on the issue that merit consideration.
Similarly, there was a bitter fight during the negotiations over the excise tax on premiums, but to label it simply as a “tax on small businesses” misses the mark as well. The excise tax applies only to premiums for businesses with 50 or more employees — and would only be imposed upon the costliest benefit packages. The tax is meant to incentivize employers to shop around for cheaper premiums, helping to drive down the unsustainably high health-care costs that threaten to bankrupt the entire economy. Bowing to pressure from both the left and the right, Democrats limited the scope of the excise tax in the final legislation, but it’s still one of the most important cost-containment measures in the law.
It’s worth noting that Sen. McCain and the sponsors of the Patients Choice Act, as well as many conservative policy thinkers, advocated the elimination of the tax exclusion for employer-provided insurance. And they were attacked by Barack Obama’s presidential campaign, various other Democratic politicians and their allies, organized labor, etc. Khimm is right to state that the administration bowed to pressure from the left and the right.