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The Republican grandstanding on Medicare during Finance Committee hearings this week hasn't been surprising, I suppose. But the audacity is still pretty breathtaking.
As you may have heard or read by now, the Republicans are angry over proposed cuts to Medicare Advantage, the private insurance alternative to traditional Medicare. The insurers who offer Medicare Advantage plans receive a flat fee for every senior that signs up. But virtually every independent expert who has studied the program has concluded that those fees are way too high--that, in effect, the government is getting a lousy deal. So when Democrats, including those drawing up the Finance bill, were looking for revenue to finance expansions of health insurance coverage, they figured that getting rid of those subsidies was a smart idea, particularly since it would generate more than $100 billion over ten years.
The danger of these cuts is that, without the promise of those fat subsidies, some private insurers may decide to pull out of the business altogether. It happened once before, back in the late 1990s, when the Clinton Administration pushed through reductions to Medicare-plus-choice, the predecessor to Medicare Advantage. (It was basically the same program under a different name.)
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