Obama’s Medicare: Leaving Seniors at the Mercy of Insurance Companies

By most accounts, Wednesday night’s debate was a relatively substantive and wonky affair, especially compared to the commercials inundating swing states all across America.  Although the debate as a whole rose to a presidential level, President Obama’s absurd and outlandish attacks on conservative Medicare did not.

The false voucher claim aside (rebuttal here), the idea that premium support is “putting seniors at the mercy of those insurance companies” is not only wrong, but hypocritical.

Joseph Antos, a former assistant director at the Congressional Budget Office, explains why it is wrong:

“The premium support concept advanced by Ryan relies on informed consumer choice of competing health plans, including traditional Medicare. Seniors would receive a fixed subsidy, higher for those with low incomes and greater needs. To attract enrollees, health plans and providers would seek ways to increase efficiency, lower cost, and reduce premiums while improving quality and customer service.” 

It is not shocking that President Obama would distort conservative reform efforts – that is par for the course.  What is shocking, even for the most cynical observers, is the blatant hypocrisy of the attack.  As Heritage’s JD Foster explains, the private sector is already pretty involved in Medicare:

“If you’re not on Medicare, then you may think Medicare is as easy as signing up for government-run insurance. You probably don’t know most seniors have to sort through various complicated health-insurance options. Sure, the old Part A is automatic, but 35 million seniors choose from a list of Medicare-vetted private insurers for the drug benefit. And 12 million seniors elect comprehensive private coverage offered by Medicare-vetted private insurers in the Medicare Advantage program.

“And that’s not all. About one in six seniors buy Medigap coverage from private insurers. Medigap fills in the gaps in Medicare coverage. The point is, seniors are very familiar with choosing their coverage plans, and they generally like choosing what best fits their needs.”

Using President Obama’s logic, seniors currently enrolled in Medicare – current seniors, not futures seniors – are already “at the mercy of those insurance companies.”  The hypocrisy really hits home on the Medigap plans, though.  Take this AARP ad, which says Medicare Part B only covers 80% of medical expenses, which is why seniors should buy this AARP plan:

Yes, that is the same AARP President Obama said was “supportive of the approach that we took” with Obamacare.  Interestingly, it’s also the same AARP that received an exemption under Obamacare.  Senator Jim DeMint (R-SC) explains:

“[T]he Obama administration has reciprocated AARP’s support by giving the group preferential treatment. “Obamacare” exempted Medigap insurance – a market AARP dominates – from virtually all its new mandates, including the ban on preexisting condition discrimination. The Department of Health and Human Services exempted Medigap plans from insurance rate review, though AARP, whose plan is the most popular form of Medigap coverage, makes more in profit the higher premiums rise. Though the administration has publicly attacked other insurance companies with much smaller profit margins, it has not openly criticized AARP’s business practices.”

President Obama simultaneously ignores the role of insurance companies in Medicare and cuts a deal with one of the major players.  It’s simply not presidential, and if President Obama truly believes premium support will leave seniors at the mercy of insurance companies, he must face the facts that tens of millions of current seniors are already at their mercy…and his plan did nothing to change that.

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  1. Pingback: Medicare Reform Myths Debunked « Constitutional Free America

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