The Obama administration announced Monday that planned cuts to Medicare Advantage would not go through as anticipated amid election-year opposition from congressional Democrats.
The cuts would have reduced benefits that seniors receive from health plans in the program, which is intended as an alternative to Medicare.
Under cuts planned by the administration, insurers offering the plans were to see their federal payments reduced by 1.9 percent, which likely would have necessitated cuts for customers.
Instead, the administration said the federal payments to insurers will increase next year by .40 percent.
The healthcare law included $200 billion in cuts to Medicare Advantage over 10 years, in part to pay for ObamaCare.
The Centers for Medicaid and Medicare Services (CMS) on Monday said changes in the healthcare market meant it did not need to make those cuts to Medicare Advantage this year.
It cited an increase in healthy beneficiaries under Medicare, which it said has lowered projected costs for that program.
should cast real doubt on our ability to reduce the rate of increase of healthcare spending within the constraints of the current system. A shorter version of the plan is “don’t cut the benefits, just lower the projected costs”. This returns to the time inconsistency problem I mentioned yesterday.
Such a process also makes a number of assumptions, each of which should concern us. Broad discretionary executive power assumes that every conceivable future executive will agree with you. Future legislators will have motivations different than those of the present incumbents. It will be easier to make cuts in the future than it is now.
Another way of looking at the events described in the quoted passage is that healthier insureds than anticipated mean that fewer people will be hurt by benefit cuts than might otherwise be the case so it’s the perfect time to cut them.
Of course treating CMS’s explanation as substantive makes assumptions, too. It assumes, for example, that they weren’t just looking for a plausible pretext to avoid making the cuts. It also assumes that the pretext is plausible.