Tuesday, February 27, 2007

CBO Pours Gasoline on the Democratic Plans to Cut Medicare Advantage Payments to HMOs

Told you so.

For some time I have been warning that the Medicare Advantage payments to HMOs are going to be "target number one" when it comes time for Democrats to reshuffle the federal health care spending priorities after 12 years of Republican Congressional rule.

For the last year, a number of estimates have put the "over payments" to HMOs when compared to the traditional Medicare plan at around 10%.

Now the Congressional Budget Office has made it all official. The CBO says that $64.8 billion could be saved between 2008 and 2012 by equalizing payments to Medicare Advantage plans and the traditional Medicare program (see summary of CBO report) .

The CBO also suggests that eliminating Medicare Advantage subsidies to underserved rural areas could save $3.5 billion. In an earlier post I said that the rural members of Congress will likely be more protective of these payments than other things.

But the bottom line is that the CBO has given the Dems the numbers they needed--the Democratic Congress is coming after Medicare Advantage plans.

A Bush veto will do the MA plans no good --an earlier post.
Why the Democrats Hate Medicare Advantage Plans--an earlier post.
Why the Democrats need the MA money--an earlier post.
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