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  • Side Effects: The $8.35 Billion Attempt to Fool Seniors

    A new report by the Government Accountability Office (GAO) shows that a demonstration program created by the Obama Administration in Medicare Advantage (MA) is primarily designed to “demonstrate” how to hide politically unpopular parts of Obamacare.

    The Quality Bonus Payment demonstration program will take place from 2012 to 2014 and differs substantially from the bonus program described in Obamacare. In the original statute, high-performing plans (those rated 4 and above on a five-star scale) would receive bonus payments as an incentive to improve quality. In the current demonstration program, bonus payments are awarded to plans rated 3 and above, essentially rating almost all plans “above average” and giving them bonus payments. The additional funding offsets Obamacare’s $145 billion in cuts to the popular MA program.

    As Heritage has warned before, Obamacare’s cuts to MA would severely reduce the quality of the program and force enrollees back into traditional Medicare. Writing for Heritage, health care experts Jim Capretta and Robert Book explain, “Phased in between 2012 and 2017, the MA cuts will substantially restrict the ability of Medicare beneficiaries to choose the health plans that best meet their needs and will result in substantial reductions in coverage for many millions of seniors and disabled Americans.” Medicare’s Office of the Actuary predicts a 50 percent drop in enrollment by 2017.

    About one-fourth of all Medicare beneficiaries are enrolled in MA, which continues to grow. Earlier this year, the Centers for Medicare and Medicaid Services announced that MA enrollment has increased by about 10 percent and average premiums fell by 7 percent. The Administration has tried to attribute these achievements to Obamacare, but the reality is that MA is successful because it allows competition among plans, which improves quality and adds benefits for seniors.

    The impact of the bonus payments is most acute in 2012. The GAO states that “the demonstration will offset more than one-third of the reduction in MA payments projected to occur under [Obamacare] during the demonstration years. The largest annual offset will occur in 2012—71 percent.”

    The fishy details continue. The GAO’s review of the demonstration’s budgetary impact shows that it is “at least seven times larger than that of any other Medicare demonstration conducted since 1995.” The estimated cost of the program is a whopping $8.35 billion over the next 10 years. The demonstration may be successful at concealing the impact of Obamacare’s cuts, but the GAO analysis shows that that’s about the extent of its effectiveness. The program’s poor design means it won’t even achieve its stated purpose.

    The GAO recommended that the White House “should cancel the MA Quality Bonus Payment Demonstration and allow the MA quality bonus payment system established by [Obamacare] to take effect.”

    It remains uncertain if the Obama Administration will take GAO’s recommendation seriously or if the $8.35 billion attempt to fool America’s seniors will continue.

    Posted in Featured, Obamacare [slideshow_deploy]

    4 Responses to Side Effects: The $8.35 Billion Attempt to Fool Seniors

    1. Bobbie says:

      that's just disgusting! Before America wasn't a Christian Nation, people weren't incentively driven by money. It was their ambition and their quality of character that drove themselves into the love of medicine and their will to heal the ill. All those in the "health care" had reasons to be there. It was all in their character uninfluenced by money. Now they have to be bribed with money? The last couple of years I've been harassed by surveys of how my doctor visits went. It's paperwork and harassment I don't like. A way to get rid of workers handling verbal complaints, accountabilities! They want patients/people so focused on their conditions government creates endless make work off of, they won't have time to live! Get this corrupt, unconstitutional government obsessed by crisis, out!

    2. Lloyd Scallan says:

      Anyone want to bet on which way the Obama adiminstration will rule?

    3. O2BMe says:

      There isn't any unscrupulous thing that Congress or the President will not due to be elected again. The President still hasn't gone over the 2000+ pages of Obamacare line by line that he promised he would. All of Congress and the President have already opted out of Obamacare while we have no choice. We were never given a choice on Social Security or Medicare They took the money from out salaries for the programs, then called the entitlements. What did we pay for. It was just another tax given a different name.

    4. david says:

      This should be shared with seniors everywhere to alert them to the fact that the administration is useing them

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