Senior citizens will be more dependent on traditional Medicare than they are today and will have fewer health care choices

May 27, 2010 06:24


With the freezing of Medicare Advantage payments in 2011, Congress has set the stage for a progressive reduction in seniors’ access to, and choice of, the popular Medicare Advantage health plans.

by  Robert E. Moffit at Human Events


According to surveys, no group of Americans is more skeptical of Obamacare than senior citizens—and with good reason.

While bits and pieces of the massive law are designed to appeal to seniors—more taxpayer subsidies for the Medicare drug benefit, for example—much of the financing over the initial ten years is siphoned off from an estimated $575 billion in projected savings to the Medicare program. Unless Medicare savings are captured and plowed right back into the Medicare program, however, the solvency of the Medicare program will continue to weaken. The law does not provide for that. Medicare is already burdened by an unfunded liability of $38 trillion.

Medicare Advantage plans, which currently attract almost one in four seniors, will see enrollment cut roughly in half over the next 10 years. Senior citizens will thus be more dependent on traditional Medicare than they are today and will have fewer health care choices.

Initial Provisions

Under the Medicare Modernization Act of 2003, Congress deliberately created a gap in Medicare drug coverage (the so-called “donut hole”) in which seniors would be required to pay 100% of drug costs up to a specified amount. Obamacare provides a $250 rebate for seniors who fall into the “donut hole” and requires drug companies to provide a 50% discount on brand name prescriptions filled in the hole.

In 2011, Obamacare will also impose a new tax (a “fee”) on the sale of these brand name drugs in Medicare and other government health programs, ranging from $2.5 billion in 2011 to $4.1 billion in 2018. Meanwhile, the law will freeze payments to Medicare Advantage plans and restrict physicians from referring seniors in Medicare to specialty hospitals where physicians have an ownership interest. In 2013, the law eliminates the tax deductibility of the generous federal subsidy for employers who provide drug coverage for retirees. This could further undercut provision of employment-based prescription drug coverage for seniors.

Fewer Plan Choices

With the freezing of Medicare Advantage payments in 2011, Congress has set the stage for a progressive reduction in seniors’ access to, and choice of, the popular Medicare Advantage health plans.

FULL STORY



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