Pinocchio
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- Sep 8, 2012
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So where did this $716 billion ‘benefit cut’ come from? It’s actually the amount budget officials estimate Medicare will increase over then next decade if the health care law is repealed. So critics have turned that around to claim the new law ‘cuts’ that amount from seniors.
But you may wondering – what is the difference between a cut and savings? That’s where the law comes in, trying to reduce overpayments to private insurance companies and other providers while increasing actual benefits to seniors under traditional Medicare.
What critics aren’t saying is that much of the savings under the new law comes from a reduction in the amount that taxpayers pay private insurance companies to run Medicare Advantage programs for seniors.
These private Medicare insurance plans cover about one in four beneficiaries, and were created as a ‘market-based’ solution in hopes of driving down costs by having insurers compete with each other. But that’s not what happened. Today, private Medicare Advantage plans cost taxpayers and those who pay Part B premiums at least $1,000 more per beneficiary than providing traditional government-run Medicare to the same person.
The Medicare Advantage plan was a Republican private insurance idea for reducing costs thru competition.
Misinformation Alert: Does the health care law cut billions in benefits from Medicare? | Your Health Security
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