Probably the biggest news from last week’s State of the Union speech was the back-and-forth between President Joe Biden and members of Congress over whether Republicans supported cuts to Medicare and Social Security.
Biden claimed they did; the Republicans rose in unison to show they didn’t.
And now, there is bipartisan concern that not only are Republicans not supporting cuts to Social Security and Medicare, but the administration may well be. Biden’s statement that he “won’t cut a single Social Security or Medicare benefit” may not be entirely accurate.
His own Centers for Medicare and Medicaid Services has proposed billions of dollars in cuts to Medicare Advantage, the low-cost, government-subsidized wraparound insurance that covers fees, prescription drugs in some cases, and other health care costs.
About 30 million people – more than half those on Medicare – use Medicare Advantage. Those in fee-for-service Medicare pay separate monthly premiums for hospital visits, trips to the doctor, and prescription drugs. Medicare Advantage combines that into one low premium.
These cuts would force those seniors and disabled people to spend more on out-of-pocket costs, have benefits eliminated, and see fewer choices in their care. They will hurt low-income, rural, and underserved communities the most, along with those with heart disease, cancer, and other long-term health challenges.
Officials at CMS say Medicare Advantage plans ultimately will receive a 1.03 percent funding bump this fiscal year, but industry insiders say that when all the factors that determine payment levels are included in the analysis, a cut of about 2.3 percent – or $3 billion – is in the offing if the proposed changes to how treatments get coded are adopted.
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Changes to the risk model would result in payments being reduced by 3.12 percent, and the proposed increase in payments amounts to half the growth rate in costs and just 40 percent of the projected growth in Medicare itself.
This would amount to “massive cuts” for seniors and the disabled, said Mary Beth Donahue, president and CEO of the Better Medicare Alliance, a group of HMOs. “Those are 30 million seniors who will ultimately see higher premiums and a negative impact on their benefits.”
The Biden administration officials say the projections are right and the bumps in payments are real – and that those who say otherwise are using cherry-picked numbers from an industry group to protect their bottom line. But they admit there are a lot of provisions that could counteract the rate increase and that indeed a net reduction is likely when it all shakes out.
Medicare Advantage is popular – more than two-thirds oppose these cuts, and a bipartisan group of 57 senators, led by Democrats Catherine Cortez-Masto of Nevada and Gary Peters of Michigan, along with Republicans Tim Scott of South Carolina and Shelley Moore Capito of West Virginia, have written the administration in opposition.
Sen. Steve Daines, R-Mont., tweeted that it was Biden, not Republicans, who was “proposing Medicare Advantage cuts.” Sen. Tom Cotton, R-Ark., added that it was the president “who was proposing to cut Medicare Advantage, a program used by almost 4 in 10 Arkansas seniors.”
But Biden, sworn protector of entitlements and federal spending in general – “If anyone tries to cut Social Security, I will stop them. And if anyone tries to cut Medicare, I will stop them” – now intends to take a significant swipe, perhaps much larger than experts are estimating, at a program that involves half the people on Medicare.
Not everyone appreciated the way the debate at the State of the Union took shape, but no one can argue that an important issue was raised or that Democrats, not Republicans, seem to be the ones planning to cut Social Security and Medicare.
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