Fact Checking the Fact Checkers on United States Medicare

Now that the election is over, let's call out the far left wing propaganda disguised as so-called fact checking It was one of the most failed part of the Democratic Party's October/November 2014 War on Seniors.

• Item 1. Polifact and similar sites tend to say something like “Many Advantage plans offer extra benefits -- things like gym memberships, vision exams or generous cost-sharing -- that have contributed to escalating program costs.” These description are backwards and the facts from the fact checkers are wrong two ways:
• The public Part C Medicare Advantage program’s costs are escalating in absolute dollars only in the sense that the public Part C option is rapidly increasing in popularity compared to traditional fee for service (FFS) Medicare (not counting people who are on group retiree insurance who pretty much can only take what the former employer or union offers). But per-beneficiary the cost of public Part C has been de-escalating since the peak in 2009 AS A PERCENT OF FFS COSTS
• It is not the extra benefits in a specific public Part C plan that drive its cost (as measured by the capitation fee that goes out of the Trust Funds to the beneficiary’s insurance company). The government picks a number that the insurance company must bid against and the insurance company says what it can deliver for that amount as well as for more or less than that amount. (I agree this is a stupid system but that’s the way it was designed.) If more, that is the incremental premium the beneficiary pays for the plan over and above the Part B premium. If less, the insurer has to increase the benefits provided. 

• Item 2: “Though the Obama administration has reversed these cuts for the past two years…” This sentence is totally incorrect.  As in Item 1, Politifact and like left wing reporters do not understand the process of setting the Part C framework bid vs. what the government actually expends per person in capitation fee. The capitation fee has come down steadily since 2010 as required by law AS A PERCENT OF FFS, by about 5% for 2015.
• Item 3: “Critics argue that the cuts will force insurance providers to reduce the benefits they offer to Medicare Advantage enrollees.” And the critics have been proven to be totally right. Networks are more restricted; premiums, co-pays and annual out of pocket spending limits are up (but at least Medicare Advantage has an OOP limit; traditional Medicare does not), and plan choices are down. All your HIGHLY BIASED PART C HATING experts’ conclusions about cuts not translating to benefits cuts are incorrect based on the existing statistics—see Avalere, Gorman or any of the truly non-partisan research houses. (I personally believe that the system should spend the same on all beneficiaries irrespective of which type of Medicare – FFS or capitated-fee – that they choose.)
• Item 4: “Since passage of the Affordable Care Act, average MA premiums are down by 9.8 percent." That statistic refers to the average premiums of plans offered, not plans selected. it is a trick played by the insurance companies and the government.
  
• Item 5: “The ad also leaves out the fact that the federal health care law expanded Medicare’s minimum required benefits and established incentives for Advantage plans to provide extra benefits.” Irrelevant. Almost all Medicare Advantage plans already had the minor increased benefits added to traditional FFS Medicare by PPACA. Most of these benefits are nonsense anyways: an annual wellness visit almost no one uses, tests that other parts of the government have actually found to be harmful, pregnancy counseling for seniors, and so forth. Making donut hole expense the same as the expense in the initial spend phase of Pqrt D was a good change but that only affects about 5% of the people on Medicare (but since I could someday be one of the people in that 5% instead of currently being one of the 95% that is not, I have no problem with it.)

¹In 2012, Harvard research found that if the insurers could just deliver the same benefits as traditional Medicare, they could do so for 93 cents on the dollar ON AVERAGE NATIONWIDE. But because they must deliver extra benefits (ONE OF WHICH CAN BE A PART B PREMIUM REBATE) the cost is what it is, what the government says it should be. It’s is the government’s selection of a framework bid number that drives the extra benefits and not the extra benefits driving the cost.