Cutting Medicare Advantage costs may be politically difficult

Aug 19 2009

The Los Angeles Times reports: "President Obama, struggling to discredit bogus charges that his healthcare overhaul would create 'death panels,' soon could face another emotionally charged obstacle -- a plan to trim the federal subsidy for a program used by nearly a quarter of Medicare beneficiaries.

The program, known as Medicare Advantage, pays insurance companies a hefty premium to enroll senior citizens and provide their medical services through managed-care networks." Many dispute whether these higher payments are worthwhile.

"Obama and many congressional Democrats see Advantage as a wasteful bonanza averaging about $17 billion a year for the companies, which critics say provide few benefits beyond regular Medicare. The companies and their supporters say they earn the extra payments by providing seniors -- who pay nothing extra -- with significant benefits, including freedom from government red tape. What lifts the disagreement above other points of contention on healthcare is its potential for spreading fear and outrage among Medicare recipients as a whole" (Parsons and Zajac, 8/19).