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SPOTLIGHT
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Political wars involving Medicare

Published on -5/2/2014, 5:02 PM

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The political wars between Democrats and Republicans over Medicare have been raging since Medicare's inception in 1965. Democrats crafted Medicare to become a single-payer system administered by the federal government. Republicans who opposed the original Medicare bill preferred a plan administered by private insurance companies using government subsidies.

The debate has come full circle. Last week, Kansas Gov. Sam Brownback signed the Health Care Compact bill to remove Kansas Medicare beneficiaries from the federal Medicare program.

Brownback said, "The Health Care Compact will allow states to restore and protect Medicare for generations to come.   Obamacare is the most serious attack on Medicare and seniors since the program's inception. By cutting $700 billion out of Medicare, President Obama and his allies made a policy statement that ideology is more important than protecting seniors. I oppose any effort at the state level to reduce Medicare benefits of coverage for Kansas seniors."

Brownback's statement is misleading and needs further explanation because guaranteed Medicare benefits are not being cut. The cuts deal with funding.

The problem is not losing benefits; the problem is deciding which plan to choose. We now have two Medicare programs competing with one another. One is government Medicare, the other is private, called Medicare Advantage.

Title III, Part III in Subtitle G of the Affordable Care Act, Protecting and Improving Guaranteed Medicare Benefits, section 3,602 states: "Nothing in the Act shall result in the reduction or elimination of any benefits guaranteed by law to participants in Medicare Advantage plans."

A portion of the federal subsidy funding the Medicare Advantage private program established under the passage of the Medicare Prescription Drug Improvement and Modernization Act of 2003 is being cut by approximately $156 billion during the next 10 years because advantage beneficiaries receive 14 percent more in funding than what traditional Medicare beneficiaries receive.  The issue is fairness.

In their 2010 report, the Medpac commissioners comprised of non-partisan watch-dog analysts for Medicare noted: "In 2009, Medicare spent roughly $14 billion more for beneficiaries enrolled in Medicare Advantage plans than it would have spent if they had stayed with traditional Medicare's fee for service. To support the extra spending, Part B premiums were higher for all Medicare beneficiaries, including those in traditional Medicare's fee for service plans."

Instead of spending the extra 14 cents of subsidized dollars to improve health care outcomes as noted in the Medpac commissioners' report, insurance companies have used portions of the subsidies for administrative expenses, which increased their profit margins. The Affordable Care Act is requiring private insurance companies to improve the quality of benefits for Medicare Advantage beneficiaries.      

The remaining funding cuts of approximately $544 billion were made to reduce spending. In 2012, Wisconsin Rep. Paul Ryan's budget assumed the same overall $700 billion in cuts.

Some important benefits were added under the new legislation, the biggest being elimination of the doughnut hole in the Part D prescription plan by helping those with expensive medications. That will be especially helpful for beneficiaries on fixed incomes.

In 2020, Medicare beneficiaries who reach the doughnut hole will pay only 25 percent of their drug costs instead of 100 percent under the original Part D program. The bill added some preventative health measures that will benefit beneficiaries.

Political ideology in the administration of the Medicare program continues to confuse beneficiaries. Noted Medicare expert Austin Frakt from Boston University summed it up well when he said, "The politics of Medicare is a cruel sport, and the taxpayers and beneficiaries receive the hardest blows."

Larry Weigel, Manhattan, started a national Medicare coaching service. He grew up in Hays and graduated from St. Joseph Military Academy in 1962.

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