Thursday, May 10, 2012
Obamacare Hurts Seniors
For starters, as the Fidelity announcement indicates, the analysis conducted by the company is based only on seniors enrolled in the traditional fee-for-service Medicare program. That means it excludes seniors enrolled in the private-plan option available in Medicare, known as Medicare Advantage. Today, about 25 percent of Medicare beneficiaries are enrolled in Medicare Advantage plans. Excluding them from the analysis significantly distorts the findings.
In a report I prepared with Robert Book for the Heritage Foundation, we found that Obamacare will cut Medicare Advantage payment rates by an average of $3,700 per beneficiary in 2017, or 27 percent below the payment rates that would have been made without Obamacare. These cuts will translate directly into higher health-care costs for seniors. Seniors who remain in Medicare Advantage will face higher costs, because the cuts will force the plans to cut back on the benefits they offer and to charge higher cost-sharing for the services they do cover. Further, seniors who will be pushed out of Medicare Advantage and back into the traditional program will lose entirely the added benefits provided by most Medicare Advantage plans. None of this is captured in Fidelity’s analysis.