In presenting his $3.4 trillion budget plan Thursday, which includes provisions that will cut the deficit in half by the end of his first term, President Barack Obama proposed cuts to Medicare Advantage payments to private insurers, expansion of health information technology, reduction of healthcare fraud, waste, and abuse, and improved healthcare quality.
Obama said the government will save $22 billion annually starting in 2012 by eliminating Medicare payments to private health insurances "as a broader effort to reduce healthcare costs." The Medicare Advantage program is slated for payment cuts of between 4% and 4.5% in 2010.
Medicare Advantage supporters are obviously not pleased with the announcement.
"If this amount of money is taken out, it will have a significant impact on benefits and premiums that 10 million seniors currently rely on," says Robert Zirkelbach, spokesman for America's Health Insurance Plans, which represents 1,300 companies.
Though AHIP applauds the president for making healthcare reform a top priority, Zirkelbach says, "We do not believe that seniors in Medicare Advantage should be asked to fund a disproportionate share of the cost to reform the healthcare system."
In announcing the plan Thursday, Obama said his proposal would reduce fraud, waste, and abuse, and dedicates funds for increasing oversight and fraud detection under the Medicare Prescription Drug Program, Medicare Advantage, and the Medicaid programs.
The budget has provisions to encourage "high quality and efficient care" and reduce "excessive Medicare payments."
In addition to the Medicare Advantage cuts, Obama said the budget would: