Hmmmmm: Interesting Timing on Medicare Advantage Pilot Program

Press Release

By:  Rodney Frelinghuysen
Date: April 27, 2012
Location: Unknown

A Government Accountability Office (GAO) report this week raised serious questions the Obama's Administration's treatment of the Medicare Advantage (MA) program and whether a new MA demonstration program run by the Department of Health and Human Services (HHS) was constructed for political purposes.

Here's the back story: the President's new health care law slashes $145 billion from Medicare Advantage -- a highly successful private insurance program that covers over 169,000 seniors in New Jersey. The program allows seniors to basically take a voucher and have the choice of about 3,300 different plans by 175 different insurance companies in total, with a diversity of benefits, premiums and cost sharing.

The cuts in the Medicare Advantage program will end the program for about 50% of its current customers and the reductions will begin this year, in the months before the fall's general election.

So in November 2010, the Administration announced a nationwide MA "demonstration project" that would test if paying insurers bonus subsidies would improve quality over the next two years.

Interestingly, according to GAO, the $8.35 billion pilot program will reverse 71% of the Advantage cuts that would have hit seniors prior to November. And, interestingly, the pilot program disappears in 2013.

"It really appears that the Obama Administration launched this so-called "demonstration program' to divert attention away from cuts to the popular Medicare Advantage program," Rodney said. "And it appears to many people that the Administration is writing itself a blank check to spend more money for political purposes."

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