Did Health Care Reform Hurt The Private Insurance Part Of Medicare? Apparently Not

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The Obama administration announced Wednesday that the Medicare Advantage program, which allows seniors to receive health coverage through a private insurer, is enjoying lower costs and more customers as a result of the health care reform law.

Medicare Advantage enrollment has risen 10 percent over the last year while average premiums have fallen by 7 percent, said Health and Human Services Secretary Kathleen Sebelius. She also pointed out that similar improvements were seen the previous year.

The figures bolster President Obama’s defense of his signature achievement, and for Democrats it has the added bonus of refuting earlier Republican warnings that “Obamacare” would gravely undermine the choice provisions in Medicare.“At the time the Affordable Care Act was passed, Republicans in Congress said the bill would virtually end the Medicare Advantage program,” declared senior White House staffer Nancy-Ann DeParle. “Those predictions turned out to be wrong. Medicare Advantage is stronger than ever — offering more seniors better benefits, higher quality care and lower costs.”

The basis for this GOP claim during the health care reform debate was that the ACA’s $500 billion in Medicare provider cuts included $136 billion in pay reductions under Medicare Advantage. But, at least for now, those cuts — along with other payment reforms — appear to have made the program more competitive and efficient.

“The new law’s massive Medicare cuts will fall squarely on the backs of seniors, millions of whom will be forced off their current Medicare coverage,” House GOP leaders wrote in their 2010 “Pledge To America” manifesto. Screeds against the payment reductions were a regular feature of Republican speeches in Congress during the debate over the law.

The Medicare Advantage program, created in 1997, allows beneficiaries to opt out of the single-payer plan and instead receive government-subsidized private insurance at an extra cost to them. About one in four seniors are currently on it. The basis of the steep ACA cuts was research that showed Medicare was over-paying the private plans.

Congressional Republicans didn’t ultimately seem too troubled by health reform’s Medicare cuts: they overwhelmingly voted to retain them last year as part of the Paul Ryan budget.

ABOUT THE AUTHOR

Sahil Kapur is TPM's senior congressional reporter and Supreme Court correspondent. His articles have been published in the Huffington Post, The Guardian and The New Republic. Email him at sahil@talkingpointsmemo.com and follow him on Twitter at @sahilkapur.
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