Before and after the Affordable Care Act became law, many opponents of reform predicted that Medicare Advantage plans - a type of Medicare health plan offered by a private company that contracts with Medicare to provide benefits to seniors – would be severely damaged by health reform.
Today, the Washington Post looks at the reality and finds that the dire predictions were unfounded and Medicare Advantage is going strong. Under the headline “Medicare Advantage provision going smoothly” the Post reports:
“One of the most significant savings envisioned in the new health care law - limiting payments to the private health plans that cover 11 million older Americans under Medicare - is, so far, bringing little of the turbulence that the insurance industry and many Republicans predicted.”
Before the Affordable Care Act, Medicare Advantage insurance companies were paid more than $1,000 per person on average than seniors in traditional Medicare. All seniors on Medicare – even the 77 percent not enrolled in Medicare Advantage – helped subsidize the additional payments to insurance companies. The Affordable Care Act protects guaranteed Medicare benefits for seniors in Medicare Advantage plans and levels the playing field by ending overpayments to big insurance companies. As the Post reports:
“Whether the payment changes are warranted was a contentious subplot in the protracted debate over the legislation. Democrats argued successfully that the private plans were being overpaid and could withstand the changes. Republicans warned that such plans would raise prices, lower benefits or cause defections from the program, stranding the elderly people who rely on them.
“Early clues to the actual effects have now materialized, as elderly Americans may sign up for a health plan for 2011 during an enrollment period through the end of the year, and the warnings of swift, serious damage to the program are not borne out. Fewer health plans are available for the coming year, but the decrease is largely for reasons unrelated to the new law. Premiums have not jumped substantially, and benefits have not tended to erode.”
Stephanie Cutter is Assistant to the President for Special Projects