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Obama’s Latest Plan to Snooker Seniors

GAO outs $8 billion Medicare Advantage "demonstration project" as an election year scam.

By 4.24.12

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For years, the President and his congressional accomplices have been telling us that the Medicare Advantage (MA) program is too costly. As Obama claimed during a 2009 interview with ABC's George Stephanopoulos: "We are spending a lot of money subsidizing the insurance companies around something called Medicare Advantage.… And if we eliminate that and other programs, we can potentially save $200 billion…" This canard was the pretext for the massive slashes in MA funding he authorized when he signed Obamacare into law. As the election year approached, however, the President's reelection team evidently noticed a potential problem -- the seniors most likely to be affected by these MA cuts were due to find out about them just a few weeks before the November election.

As Benjamin E. Sasse and Charles Hurt report, open enrollment for MA begins three weeks before voters go to the polls: "It's hard to imagine a bigger electoral disaster for a president than seniors in crucial states like Florida, Pennsylvania and Ohio discovering that he's taken away their beloved Medicare Advantage just weeks before an election." And it is no exaggeration to say that MA is "beloved." Nearly 25 percent of all Medicare enrollees are on MA, and the vast majority of these seniors chose the program because of its low co-pays and comprehensive benefits. It is no coincidence that well over three-fifths of MA beneficiaries have annual incomes of less than $30,000 and that the percentage of minorities enrolled in the program is much higher than is the case for traditional Medicare.

The electoral significance of these facts would hardly have been lost on the President's political advisors when they learned that Obamacare's MA cuts would be unveiled to the nation's most reliable voters just before the November election. The resultant vision of surly seniors lining up in their millions at the polls to pull the lever for Mitt Romney presumably produced urgent emails and frantic phone calls, followed by a terse directive from the White House to Obama's creatures at CMS to come up with plan to put off the cuts until after the election. In due course, an $8.3 billion "demonstration project" materialized that would "temporarily restore Medicare Advantage funds so that seniors in key markets don't lose their trusted insurance program in the middle of Obama's re-election bid."

It would appear, however, that the auditors of the Government Accountability Office (GAO) smell a rat. "In a rebuke to the Obama administration, government auditors are calling for the cancellation of an $8 billion Medicare program that congressional Republicans have criticized as a political ploy." Naturally, the number crunchers at the GAO didn't employ the kind of partisan verbiage that the GOP used when word of this scam got out. They couched their criticism in the bland vernacular of the Beltway bureaucrat. Nonetheless, they pointed out that this particular demonstration project "dwarfs all other Medicare demonstrations -- both mandatory and discretionary -- conducted since 1995" and "precludes a credible evaluation of its effectiveness in achieving CMS's stated research goal."

In other words, the amount of money being spent on this faux demonstration project is gigantic compared to legitimate projects and CMS didn't bother to outline any real plan for evaluating its success. The GAO folks are mistaken on the latter assumption, however. The Obama reelection team, which includes the apparatchiks at CMS, does indeed have a plan for measuring the success of the project -- they will count the votes cast for the President on election day. If he receives more votes than Mitt Romney, the program will be judged a success. Presumably, the transparency of their motives in this regard is why the Medicare Payment Advisory Commission (MedPAC) has also raised concerns: "The panel denounced Medicare's 'overly broad use of demonstration authority.'"

This concern echoes those which have long been voiced by a variety of Republicans on Capitol Hill, including Senator Orrin Hatch and Rep. Dave Camp, who released this statement: "The Obama Administration launched this demonstration program to divert attention away from cuts to the popular Medicare Advantage program … Furthermore, it's unclear whether the Obama Administration even had the legal authority to undertake it in the first place." The response of the White House to the protests of Republicans and the concerns of nonpartisan agencies was predictable: "Asked about the report, White House press secretary Jay Carney immediately changed the subject to the $200 billion in projected savings from eliminating improper payments under the health care law."

At this late date, it's difficult to restrain a chuckle when Republicans like Orrin Hatch, the appointees at MedPAC, and the GAO number crunchers raise concerns about "overly broad" use of power and lack of "legal authority" by this administration. These people should know by now that such behavior defines the Obama White House. For Obama and his accomplices, this $8 billion "demonstration project" is no different than the Obamacare waivers or the gag order issued by Kathleen Sebelius in September of 2009 forbidding insurance companies to communicate with their own customers about the "reform" law while it was being debated in Congress. These people simply don't care if their actions are legal. They will do whatever it takes to win.

And to win this November, they know they must keep as many seniors as possible in the dark about what has been done to Medicare Advantage. It isn't enough to simply lie. They must maintain the false illusion that the program's cost and benefits have not been altered. Thus, $8 billion of our money must be used to shore up the program until the President has weathered the election. That this is unethical and probably illegal is utterly irrelevant to Obama and his mendacious minions.

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About the Author

David Catron is a health care revenue cycle expert who has spent more than twenty years working for and consulting with hospitals and medical practices. He has an MBA from the University of Georgia and blogs at Health Care BS.