Last updated on: 10/18/2012 | Author:

Will Obamacare’s Cuts to Medicare Part C (Medicare Advantage) Lead to a Decrease in Patient Benefits?

General Reference (not clearly pro or con)

Kate Pickert, Staff Writer for TIME magazine, wrote in her Aug. 16, 2012 article “Fact Check: Obamacare’s Medicare Cuts,” available at

“Under the ACA, the federal government will substantially reduce the amount it spends funding Medicare Advantage, which is privately administered insurance offered to Medicare beneficiaries. About one-quarter of Medicare recipients are enrolled in private Medicare Advantage. In theory, these plans are supposed to manage health care spending better than fee-for-service Medicare. But they don’t actually save the federal government any money. They cost, per patient, 14% more than traditional Medicare… The ACA eliminates this subsidy and pegs Medicare Advantage payments to quality metrics.”

Amanda Cassidy, Principal at Meitheal Health Policy, LLC, stated in her May 20, 2010 article “Health Policy Brief: Health Reform’s Changes in Medicare,” available at

“Within several years, for example, some payments to Medicare Advantage plans will be cut, but those plans will be eligible for bonuses if they can show that they provide high-quality health care…

The federal government pays more for beneficiaries enrolled in these plans than for beneficiaries in fee-for-service Medicare. That additional funding provides enrollees with additional benefits… As the Medicare Advantage payment changes go into effect, beneficiaries may or may not see changes in benefit offerings…”

PRO (yes)


Robert A. Book, Senior Research Fellow in Health and Economics at the Heritage Foundation’s Center for Data Analysis, wrote in his Oct. 29, 2010 blog post “If You Like Your Medicare Advantage Plan, You Probably Cannot Keep it,” available at

“…our report found substantial regional variations—benefit losses range from a low of $2,780 in Montana to a high of $5,092 in Louisiana…

As a direct result of the Medicare cuts used to pay for a massive Medicaid expansion and subsidy scheme under the new law, senior citizens and disabled Americans will pay more but receive less care, and despite repeated promises that ‘if you like your health plan, you can keep it,’ half of those who like the Medicare Advantage plan they’ve chosen will not be able to keep their plan. Even those who are able to keep their plan will find that it’s not the same plan any more—it will have higher out-of-pocket costs and cover fewer services.”


John Goodman, PhD, President and Kellye Wright Fellow in Health Care at the National Center for Policy Analysis, wrote in his Aug. 22, 2012 article “Ten Myths in the Medicare Ad Wars,” available at

“White House Television talking points stress new benefits for seniors: a free annual wellness exam and the eventual closing of the ‘donut hole’ for drug coverage. What they conceal is that for every $1 spent on new benefits, seniors will lose $9 in other spending — which gives a whole new meaning to the term ‘bait and switch.’

…one in four Medicare beneficiaries is in a Medicare Advantage plan. These plans may be overpaid by Medicare, but they are required to ‘spend’ their overpayments on extra benefits for the enrollees. These include extra drug coverage, dental benefits, etc. Over the next 10 years, ObamaCare will reduce spending on these plans by $156 billion and this reduction will inevitably lead to a loss of benefits. The remainder of the cuts in Medicare spending will mainly be in the form of reduced payments to providers. Although promised benefits won’t change under orthodox Medicare, in the very act of reducing provider fees, health reform will cause seniors to get less care. So while the White House claim that beneficiaries will not lose benefits may not be technically a lie, surely the FTC would pounce on a private company if it said the same things.

Remember: lower payment to providers means less access and less access means less care.”


Richard L. Kaplan, JD, Professor of Law at the University of Illinois at Urbana-Champaign, wrote in his Spring 2011 article “Older Americans, Medicare and the Affordable Health Care Act: What’s Really in It for Elders,” available online at

“Because Medicare Advantage plans may not discontinue any ‘guaranteed Medicare benefits,’ they are likely to scale back or eliminate many of the extra benefits they provide, such as vision and dental care. Some Medicare Advantage plans may raise premiums for their enrollees, while other plans may cease participating in the Medicare program.”

CON (no)


John E. McDonough, DPH, Professor of the Practice of Public Health and Director of the Center for Public Health Leadership at the Harvard School of Public Health, wrote in his Aug. 15, 2012 blog entry “Whew! Romney/Ryan Agree on Medicare. Now, Four Questions…,” available at

“The ACA reduces or eliminates no benefit to any Medicare enrollee, and neither does any proposal made by President Obama…

A big part of the ACA’s Medicare spending reductions involves lowering payments to private insurance companies that participate in Medicare Advantage (also known as Medicare Part C) — $156B between 2013-22. These reductions, decried by Republicans, have caused no noticeable damage to Medicare Advantage — enrollment in these plans is up, and premiums are down since the ACA took effect…

And there’s something more. There is a financial interaction between Medicare Part C and Medicare Part B — the physician services part of Medicare for regular fee-for-service beneficiaries. Turns out, the more Medicare Advantage costs, the higher premiums rise for Part B enrollees. And the lower Medicare Advantage go, the lower the pressure on Part B premiums affecting about 70% of all Medicare enrollees.”


Emilie Openchowski, Assistant Editor at the Center for American Progress, wrote in her July 6, 2012 article “Obamacare Is Good for Medicare; The Affordable Care Act Helps Our Senior Citizens,” available at

“The Affordable Care Act has also improved the quality of care provided to seniors enrolled in Medicare, while making care more affordable. Those enrolled in Medicare Advantage (Part C) have enjoyed 16 percent lower premiums since 2010. There has also been a 17 percent increase in enrollment in the program and higher numbers of beneficiaries opting for higher-quality plans in this time period. Almost 13 million Americans are enrolled in the program as of February 2012—2 million more than the Congressional Budget Office predicted would join by this time.”


Sy Mukherjee, Health Reporter-Blogger for, wrote in his Sep 19, 2012 blog post “Obamacare Strengthened Medicare Advantage to Provide More Low-Income Americans with Affordable Coverage,” available at

“Thanks to the ongoing implementation of the health reform law, low-income Americans should continue to see their Medicare Advantage premiums decrease over time, and they will soon have a wider array of quality-rated plans to choose from.”