Medicare Advantage (MA): The New Whipping Boy

What is Medicare Advantage (MA)? MA was enacted in 2003 to allow seniors to use Medicare funds to buy private insurance plans that fit their health needs and their financial budgets. MA has some built-in incentives to encourage insurers to offer lower costs and better benefits. Also, it's a program that puts patients in charge of their health care, not the government, which is why seniors like it and probably why this administration wants to cut it drastically. How drastically? If President Obama gets his way, he will cut the program by close to 20%. (White House fact sheet entitled, "Paying for Health Care Reform," states the administration would cut $622 billion from Medicare and Medicaid, with a big chunk coming from Medicare Advantage, to pay for health care reform.)

Already, an approximately 10 million seniors have enrolled in Medicare Advantage. President Obama is proposing to cut the MA program by nearly 20%, which would reduce the amount of money each senior would have to buy the MA insurance. This, in effect, would force most of the seniors currently on MA into Medicare (Parts A and B), because they could not afford the higher cost of MA. Didn't President Obama promised in New Hampshire that, "if you like your health-care plan, you can keep your health-care plan." Yes, he did say that! You will still be able to keep that MA plan that your like, but it will cost you substantially more. I guess he just forgot to mention that simple fact.

For people who choose to enroll in a MA health plan, Medicare pays the private health plan a set amount, every month. MA members typically also pay a monthly premium in addition to the Medicare Part B premium to cover items not covered by traditional Medicare (Parts A & B), such as prescription drugs, dental care, vision care, and health club memberships. In exchange for these extra benefits, individuals may be limited on the providers they can receive services from without paying extra. Typically, the plans have a network of providers that you can use. Going outside that network may require permission or extra fees.

From my perspective, the main benefit of Medicare Advantage is that individuals are taking personal responsibility for their health care by buying private health insurance that meets their specific health needs. However, for some reason, personal responsibility is an anathema in Washington, D.C.