Despite desperate predictions that the approximately $500 billion (over 10 years) cut in subsidies to Medicare Advantage private insurers to help pay for healthcare reform would destroy the program and cause painful premium hikes for seniors, a new report from the Centers for Medicare and Medicaid Services shows the opposite has proven to be true:
On average, Medicare Advantage premiums will be 4 percent lower in 2012 than in 2011, and plans project enrollment to increase by 10 percent, the Department for Health and Human Services (HHS) announced today. Of people with Medicare, 99.7 percent continue to enjoy access to a Medicare Advantage plan, and benefits remain consistent with those offered in 2011.
This follows an earlier announcement that average prescription drug plan premiums will remain virtually unchanged in 2012:
“Thanks to the Affordable Care Act, Medicare is stronger than ever,” said Health and Human Services Secretary Kathleen Sebelius. “On average, Medicare Advantage premiums will go down next year and seniors will enjoy more free benefits and cheaper prescription drugs.”
CMS was able to use authority provided by the Affordable Care Act to protect beneficiaries from significant increases in costs or cuts in benefits in 2012, leading to average premium declines for the second year in a row: 2012 premiums are projected to be 11.5 percent below 2010 premiums.
In 2012, all beneficiaries will have access to Medicare-covered preventive services without paying a co-pay or deductible, including an Annual Wellness Visit with their physicians. Those who reach the donut hole will enjoy deep discounts on brand name drugs and expanded coverage for generic drugs under provisions of the Affordable Care Act.
That Democrats, creators and protectors of the welfare state, were raiding Medicare to pay for healthcare for undeserving “others” was a cornerstone of Republican messaging as they tried to stop reform in 2009 and 2010. Reports like this make that case a tougher sell.
John Rother, former director of policy and strategy at AARP and now president and CEO of The National Coalition on Health Care, agrees with Sebelius that the March 2010 healthcare law deserves some of the credit for these positive numbers.
“The Affordable Care Act started the process of moving toward equalization in terms of how much we pay Medicare Advantage and how much traditional Medicare costs. I think she’s right in saying that the effort to make health plans operate with a little less extra money is showing it’s quite feasible and that in fact there’s little evidence to show health plans are losing members or cutting benefits or any of the other things they [Republicans] claimed would happen during the fight over healthcare reform.”