Cuts in Medicare

I recently read an article that states Congress wants to cut the money allocated to Medicare Advantage. Those that want to do that do not understand how Medicare Advantage works or they wouldn’t suggest such lunacy. 

Medicare Advantage plans from private insurance came to be because the cost of Original Medicare became too high. Congress started these plans under the premise that they could save the government money. They do, so why does Congress want to cut these plans? The answer is simple, Congress doesn’t understand how these plans work, how they have been funded, and the economic effect of eliminating them. Let’s explore it.

Medicare Advantage is funded by the government to the private insurance companies based on the savings the government derives from these MAPD plans. Simply put, the government saves about $200 per month per Medicare recipient who goes onto an Advantage plan rather than stay on Original Medicare regardless of whether these clients add a supplement. There are over 150,000 Medicare advantage recipients in the US. You do the math.

The savings over Original Medicare is so significant yet Congress wants to eliminate or reduce the number of plans in the US. Really makes no sense. 

If you ran your business-like Congress runs the country, you’d be out of business very quickly.

If the government saves $200 per Medicare recipient, per month why would they want to eliminate these plans? The simple explanation is they do not understand how they work or how they are funded, or the savings the government derives from these plans. Why they do not know the significance and savings is beyond explanation. 

They are simply looking at a budget item and see how expensive it is and want to cut the program to eliminate the expense. I would not want them running my business, that’s for sure. 

The significance economically for Americans because Congress wants to eliminate Medicare Advantage would then force seniors to go back to Original Medicare where there is no maximum out of pocket and the government pays 20% of all bills forever. Really not very bright, nor cost-effective. 

Doesn’t Congress realize the significance and benefits MAPD plans bring to seniors? Apparently, they don’t, or they would not consider eliminating MAPD plans. All seniors need to immediately contact the Congressional representatives and set them straight. This could become a national issue and those in power need to understand the ramifications of making this sort of change.  Almost 80% of seniors with Advantage plans say that they would be less likely to vote for anyone in Congress that voted to eliminate MAPD plans. Nearly 74% of seniors feel that the Biden Administration should protect Advantage plans, and that is from a bipartisan majority.

Eliminate Medicare Advantage and raise costs for all seniors and the federal government because, without MAPD plans, everyone would be on Original Medicare and must pay 20% of all bills and sometimes pay 35% of those bills. 

We should also demand that Congress go on Medicare as well. They have exempted themselves from both Medicare and Social Security and both programs are going broke. If Congress was part of both systems, they would be fixed and profitable or at least break even. Congress would make keeping these systems viable and available to all because if they were part of those systems, they would be putting their financial and medical wellness at risk. 

This is a national disgrace and Congress needs to be held accountable if they act against these government-sponsored plans.

The Barend Agency Inc.

Len Barend, broker


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