NCPA - National Center for Policy Analysis


June 25, 2008

Medicare's staff, members of Congress and Sen. Barack Obama (D-Ill.) are all moving to expand government influence over the medical choices we make, says Scott Gottlieb, a fellow at the American Enterprise Institute and a former senior official at the Centers for Medicare and Medicaid Services.

The House will soon vote on legislation that aims to cut Medicare Advantage -- a program that allows millions of seniors to use federal dollars to buy private health insurance.  Democrats hate Medicare Advantage and have been trying to cut it for quite some time, because they don't like health care markets, says Gottlieb.

Sen. Obama has proposed the following "reforms" to Medicare:

  • He promises to cut $150 billion out of Medicare Advantage in the coming years, in order to expand "fee-for-service" Medicare programs.
  • For those not yet eligible for Medicare, he also proposes to saddle private plans with new regulations and create a subsidized, Medicare-like public plan to "compete" against the private health-insurance market for those under 65.
  • The idea is that the Medicare-like alternative would eventually displace a dwindling number of private plans, after many are driven away by costly new government rules.
  • His endgame is to leave the government-administered Medicare program in a position to set decisions for the entire health care system.

However, Medicare Advantage plans are valuable to consumers and offer promising advantages, says Gottlieb:

  • They enable competition that serves as a model for shaping Medicare into a privately run system.
  • They offer prevention and wellness benefits, care coordination and alternatives to hospitals at the end of life that traditional Medicare does not provide.
  • The clinical staff of Medicare Advantage plans offers personalized services that reflect the care people want rather than benefits defined by remote staff at a monopoly supplier.

Source: Scott Gottlieb, "What's at Stake in the Medicare Showdown," Wall Street Journal, June 24, 23008.

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