Three years after the law passed, we’re starting to see fairly strong indications that many of ObamaCare’s revenue raisers won’t pan out. Just yesterday, for example, the Department of Health and Human Services bowed to pressure from the insurance industry and reversed its plan to cut payments to privately run Medicare Advantage (MA) plans. Instead of taking a 2.2 percent cut, those plans will instead be given a 3 percent increase.
Nor is this the first time that Medicare Advantage has escaped planned cuts. Prior to the election, the administration delayed a series of MA cuts built into the health care overhaul, replacing it with an unusual, and extremely expensive, pilot program that it said would help test the effect of quality bonuses. The problem was that the pilot program extended to every MA provider in the nation, and rewarded providers that didn’t score high on quality. It was a pretty nakedly transparent attempt to avoid some of the cuts; the Government Accountability Office stated flatly that the pilot program couldn’t possibly test the effect of quality bonuses as the administration said it would, and called for the administration to end the pilot.
What makes this even more revealing is that these are cuts that ought to be relatively easy to achieve: The administration, along with many Democrats, has long argued that Medicare Advantage providers are overpaid. Yet we’ve now seen it backtrack on multiple occasions.