Obama Targets Medicare Advantage
August 26th, 2009
Seniors would lose with health 'reform', and seniors vote.
President Barack Obama was wise to vacation this week on Martha's Vineyard. Not because it's one of the few places in America where his health-care plan is still popular, but because by getting out of Washington he gave staff time to repair his vaunted message machine, which was starting to break down.
Two weeks ago, White House Senior Adviser David Axelrod said in a now legendary "viral" email that, "It's a myth that health insurance reform would be financed by cutting Medicare benefits." This was sent out the day before Mr. Obama told a Montana town hall that he'd pay for health-care reform by "eliminating . . . about $177 billion over 10 years" for "what's called Medicare Advantage." And it was two days before Mr. Obama told a Colorado town hall he'd cover "two-thirds" of the "roughly $900 billion" of his plan's cost by "eliminating waste," again citing Medicare Advantage.
Who's right? As a former senior adviser, I can tell you who: the president. What's more, according to a White House fact sheet titled "Paying for Health Care Reform," Mr. Axelrod was misleading his readers. It notes the administration would cut $622 billion from Medicare and Medicaid, with a big chunk coming from Medicare Advantage, to pay for overhauling health care. Mr. Obama heralded these cuts as "common sense" in his June 13 radio address.
Medicare Advantage was enacted in 2003 to allow seniors to use Medicare funds to buy private insurance plans that fit their needs and their budgets. They get better care and better value for their money.
Medicare Advantage also has built-in incentives to encourage insurers to offer lower costs and better benefits. It's a program that puts patients in charge, not the government, which is why seniors like it and probably why the administration hates it.
Already, an estimated 10.2 million seniors—one out of five in America—have enrolled in Medicare Advantage. Mr. Obama is proposing to cut the program by nearly 20% and thus reduce the amount of money each will have to buy insurance. This will likely force most of them to lose the insurance they have now. Yet Mr. Obama promised in late July in New Hampshire that, "if you like your health-care plan, you can keep your health-care plan."
There are roughly 23,400 seniors on average in a congressional district who have Medicare Advantage, but who face losing it if Mr. Obama has his way. That's enough votes to tip most competitive House and Senate races.
Back in 2006, Mr. Obama and other Democrats railed against GOP efforts—modest though they were—to slow future Medicare spending growth. Now he and his party may reap what they have sown. As the president pushes to enact an overall cut to Medicare he will imperil Democrats in tough re-election races. Mr. Obama has a dangerous old tiger by the tail. Seniors are much more likely to vote than the population at large.
Adding to the Democrats' woes are polls that show weak support for ObamaCare among Independents and Democrats. In the new ABC/Washington Postpoll, only 45% approved of Mr. Obama's plan and 50% opposed it—with 40% "strongly" opposed.
Despite Mr. Obama's barnstorming tour, last week's Fox/Opinion Dynamics poll said "the health care reform legislation being considered right now" is opposed by 21% of Democrats, 50% of Independents, and 81% of Republicans. Only 37% of Democrats and 15% of Independents think their families would be better off if it passed.
The problem for Mr. Obama is that he lacks credibility when he asserts his plan won't add to the deficit or won't lead to rationing; that people can keep their health plans; that every family's health care will be better, not worse; and that a government run plan isn't a threat to private insurance. A large number of Americans don't believe the president on this.
With this week's $2 trillion upward revision in the White House's deficit projections, August has been the cruelest month for Mr. Obama. The president is now facing a politically explosive mix of unpopular policies and an angered electorate.
It's still too early to count Mr. Obama out. His team will be back in Washington next week. They'll work on their messaging and have more than $100 million—much of it from pharmaceutical companies—to spend on ads bludgeoning reluctant Democrats and energized Republicans.
The White House will exert enormous pressure—and in the spirit of Chicago-style politics, employ threats when necessary—with Senate and House Democrats. The health-care battle, already intense, will get more so in the months ahead. ObamaCare is unpopular, but it is far from defeated.
And what ever happened to this, from June, where the figure was half, mere lunch money, of the White House's current #?
"Among the proposed policy changes outlined by the president are:
* Reductions in payments to providers to reflect increased efficiencies in the system, which the White House estimates could save $110 billion over the next decade.
* Cuts in federal subsidies to hospitals that treat large populations of uninsured patients, estimated to save $106 billion over the next decade.
* Cuts in how much the federal government pays pharmaceutical companies to provide prescription drugs to seniors and others, estimated to save $75 billion over the next decade."
Edited by Nittany Lioness, 15 September 2009 - 08:35 AM.