“It’s a bad idea,” President Obama recently said of the Path to Prosperity budget proposed by House Budget Committee Chairman Paul Ryan, R-Wis. “It will ultimately end Medicare as we know it.” The trouble is, as became painfully apparent during the 2010 election, Obama’s national health care law had already “ended Medicare” as millions of American seniors knew it by slashing funding for a program known as Medicare Advantage. The last thing Obama needs is another losing fight over this in 2012, so it appears that his administration devised a way of avoiding it. According to a Government Accountability Office report published yesterday, the administration has been doling out cash from an $8 billion slush fund to temporarily cushion the blow from these cuts. The pain will come later, presumably after his re-election.
For decades, the federal government has been experimenting with the way Medicare provides health care to seniors. Most seniors still use the program’s fee-for-service system, with the government billed directly by doctors and hospitals for all health received. But more than 12 million, or a quarter of all Medicare recipients, participate in Medicare Advantage, in which private insurers compete to provide services for seniors. Medicare Advantage participants pay premiums to a health insurer of their choice. The insurers also receive a subsidy from the government for each patient.
