“WASHINGTON (AP) — In a blow to the Obama administration on Medicare, government auditors Monday called for the cancellation of a costly bonus program for private health plans that congressional Republicans have criticized as a wasteful political ploy.
The nonpartisan Government Accountability Office said it’s not clear that the $8.3 billion Medicare Advantage bonus program will improve quality because most of the money is going to plans just rated average. The auditors did find, however, that the bonuses would temporarily ease the pain of unpopular cuts to insurance plans under President Barack Obama’s health care overhaul law.
Ahead of presidential and congressional elections in which seniors are a key group of swing voters, the administration has been working hard to portray itself as a good steward of Medicare, by cracking down on waste and fraud, improving benefits, and keeping costs under control. The GAO report could become a blemish on its record.
The administration defended the program, saying without bonuses many plans would not have an incentive to improve.
But Sen. Orrin Hatch, R-Utah, said the GAO report suggests that the administration abused its authority, pumping money to the plans to avoid more criticism over the cuts.
Medicare Advantage is a popular private insurance alternative to the traditional health care program. More than 3,000 private plans serve nearly 12 million beneficiaries, about one-fourth of Medicare recipients. They offer lower out-of-pocket costs, usually in exchange for some limitations on choice.
The health care law trimmed Medicare Advantage to compensate for prior years of overpayments that had allowed the plans to offer attractive benefits — and pocket healthy profits.
Republicans fiercely attacked those cuts during their successful campaign to take control of the House in the 2010 midterm elections. Seniors responded by backing GOP candidates.”