A Medicare official concedes that seniors may
have to dig deeper into their wallets next year thanks to the health
The new analysis obtained by POLITICO finds the health care overhaul
will result in increased out-of-pocket costs for seniors on Medicare
Richard Foster, the actuary for
the Centers for Medicare and Medicaid, also tells Senate Republicans that the
overhaul will result in “less generous benefit packages” for Medicare
Advantage plans next year. Foster is independent from the administration
Democrats have long contended that Medicare Advantage plans – private
insurance alternatives to Medicare – overpay private insurers,
increasing premiums for everyone, and needs to be reformulated.
But Republicans say dramatic changes to the program mean some seniors
won’t be able to keep their plans – a promise President Barack Obama
made during the reform debate – and the GOP has made the issue part of
its attempt to roll back the health law.
Sen. Chuck Grassley (R-Iowa), ranking member of the Senate Finance
Committee, says the administration is trying to downplay the effects of
the overhaul on the Medicare Advantage plans.
“Painting a rosy picture of Medicare Advantage options denies the facts
from the government’s own chief actuary,” he said in a statement to
POLITICO. “And it’s a disservice to the 11 million current beneficiaries
who count on this popular program.”
Health and Human Services Secretary Kathleen Sebelius says, in a separate
letter sent recently to Grassley, the changes in the health care
overhaul will end up strengthening the program.
“Next year, seniors will have new benefits, new protections against
fraud, and better Medicare Advantage choices with meaningful differences
at affordable premiums, and more beneficiaries will participate in the
program,” she wrote.
Sebelius says that the remaining Medicare Advantage plans have higher
standards to meet, stemming from a 2008 Medicare law. In addition, 99.7
percent of Medicare beneficiaries who have access to an Advantage plan
this year will have it next year and that premiums are expected to
decline by 1 percent next year.
Foster says the additional costs seniors face will be partially offset
by other pieces of the law, including reduced cost sharing for Medicare
Parts A and B, lower Part B premiums and the filling of the prescription
drug donut hole.
Last week, Grassley’s office highlighted an error Sebelius made in a
speech to a gathering of AARP members. She incorrectly said the number
of Medicare Advantage plans would increase next year. HHS later changed
the written copy of the speech online without highlighting the change,
which angered Grassley.
“Despite making a limited correction last week to an earlier speech
delivered in Florida, the administration refuses to set the record
straight appropriately,” Grassley said.
“But a new letter from Medicare’s chief actuary is nonpartisan and
indisputable. Seniors enrolled in Medicare Advantage will pay more out
of their own pockets as a result of the new health care law. Their costs
will go up by hundreds of dollars on average in the coming years, by
$346 in 2011 to a high of $923 in 2017.”
CLARIFICATION: The cost estimate came from the office of the
actuary for the Centers for Medicare and Medicaid, an independent,