Why is Congress so eager to cut $160 billion-plus from Medicare Advantage? The program does things that President Obama and other liberals normally praise. Is the cut simply the price AARP (formerly the American Association of Retired Persons) is charging for overlooking the rest of the $500 billion in Medicare cuts meant to finance "healthcare reform?"
Medicare Advantage offers a range of benefits beyond basic Medicare. It combines many elements Obama and other liberals like, such as subsidized premiums for low-income elderly, "pooling" insurees to provide bargaining power and managed care that emphasizes prevention, treatment of chronic conditions and coordination among doctors.
As a result, it keeps the cost of care, and thus insurance premiums, much lower than policies do.
Ten million seniors have enrolled voluntarily in Medicare Advantage and realized savings of about $1,000 a year in enhanced benefits over and above what Medicare itself provides. These extra benefits include reduced out-of-pocket costs and comprehensive drug coverage, as well as vision, dental, and hearing benefits — plus programs promoting wellness (such as gym memberships) disease management and care coordination.
It essentially implements all the economies and efficiencies that Obama preaches nonstop. Doctors speak to one another, duplication is avoided, care is managed, and there is an emphasis on prevention.
Yet the Democratic healthcare bill targets Medicare Advantage for drastic cuts, which would force up premiums and drive millions of seniors to drop it.
Which brings us to AARP, which makes a hefty profit selling Medigap coverage, the chief alternative to Medicare Advantage.
Medigap is a more traditional policy: It offers fewer benefits at higher premiums. It lacks such features as no-care coordination, chronic-care management and pay-for-performance incentives.
And Medigap doesn't do as much to control costs. Because Medicare Advantage negotiates payment levels and saves money via bulk purchasing, inpatient costs run 20 percent or more below Medigap charges. More patients are handled through outpatient care. X-rays and other radiation cost 10 percent to 20 percent less; devices such as wheelchairs, walkers, and oxygen bottles run a fifth less than under conventional policies.
But AARP is probably the most potent lobby in Washington — and the White House repeatedly has tried to buy off the lobbyists on healthcare reform. Its deals with the insurance and pharmaceutical lobbies have gotten some coverage — will we learn someday of a similar bargain with AARP?
The deal would represent special-interest politics at its worst: a group betraying the constituency it's supposed to serve for the sake of its own coffers.
"Healthcare reform" would slash Medicare — and not just Medicare Advantage — to subsidize insurance for much younger people who can't qualify for Medicaid and thus, by definition, aren't poor. And the supposed protector of poor old people will stand by, content with its own cut of the action.
Is this what liberal Democrats have come to?