Standing against big government and for the people!
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The White House has apparently decided that it won't enforce the unpopular parts of its health-care plan until after the 2012 election. The latest evidence is its decision not to slash Medicare Advantage, the program that Democrats hate because it lets seniors choose private insurance options.
Last Friday, Health and Human Services released its annual "call letter," which introduces the formula that will set Medicare rates for 2012. Out of nowhere, per capita Medicare Advantage payments will increase by 1.6% on average. The update was 0% for 2011, and most Wall Street analysts were forecasting a negative update for the coming year, given that ObamaCare cuts $136 billion over a decade and indirectly steals another $70 billion through such payment adjustments.
Would this be the same Medicare Advantage that candidate Barack Obama vowed to eliminate, saying in 2007 that "We shouldn't be rewarding the insurance industry for deceiving and defrauding our seniors"? And would this be the same program that Democratic Congressman Pete Stark says is evidence that "Medicare privatization trumps moral values" for Republicans? Why yes, it would.
About one of four seniors now favor Advantage and enrollment is rising at 6%, mostly because this coverage functions like the normal insurance they've had all their lives. But Advantage is a threat to liberals like Mr. Stark because it shows that market pricing and competition are a good alternative to the government control that defines fragmented fee-for-service Medicare and soon ObamaCare.
Advantage also resembles the modified voucher program that Republicans like Paul Ryan and former Congressional budget director Alice Rivlin have proposed to resolve Medicare's gargantuan unfunded liabilities. Democrats claim it's an exercise in corporate payola—insurers receive a defined contribution for covering a senior (though insurers are paid to administer most of traditional Medicare too, under government instructions).
It's true that Advantage could be better run to favor the more efficient commercial carriers that are restraining health spending in some parts of the country. But Democrats arbitrarily hacked funding across the board, as they did in the 1990s to a similar program called Medicare+Choice. As a result of these cuts, the chief Medicare actuary expects benefits to decline and enrollment to fall by half in the next 10 years.
Yet now the White House's more immediate goal is evading any near-term blame when the seniors who like the coverage they have now are forced to take a bath. The funding boost for Advantage is another temporary concession to the public mood, much like the hundreds of waivers HHS has issued that exempt businesses from certain mandates so they don't dump coverage.
The other goal is to defuse a potent GOP argument against ObamaCare that persuaded many voters. A year-long reprieve for a valuable program is useful, but if the White House isn't even bothering to defend its core convictions when they cause political problems, wouldn't it be better not to destroy Medicare Advantage in the first place?