After government negotiations, Medicare Advantage has Lower rate. Free market or saving money?

Looks like the Republicans are wrong again, this time when it comes to Medicare’s Advantage program. Yet the press will never highlight reality over fear mongering, and Democrats will never mention their accomplishments. The squeaky wheel get the … One more thing; Republicans claim the largess of government gives it an unfair advantage when negotiating rates, yet the private health care industry can always walk away if they don't like the deal. How unfair is that? It isn't.

Seniors enrolled in Medicare Advantage plans will pay slightly less next year for their health insurance, Obama administration officials announced … The average monthly premium in the private Medicare Advantage plans will drop to $35.69 in 2011, which is 45 cents less than this year's average monthly cost … the healthcare reform law gave the federal government new authority to negotiate, the government was able to refuse contracts to plans with high bids.

"The Affordable Care Act gave us new authority to negotiate with health plans in a competitive marketplace," Centers for Medicare and Medicaid Services (CMS) Administrator Donald Berwick, MD, said. "As a result, our beneficiaries will save money and maintain their benefits."

The move comes despite predictions that beneficiaries enrolled in the private plans offered through Medicare would see a sharp increase in out-of-pocket costs after the Affordable Care Act (ACA) cut billions from the plans and added new restrictions on what they can charge and what they must cover.

The truth is many of the features in Medicare Advantage will switch over to the standard Medicare program.

Jonathan Blum, deputy administrator and director of CMS' Center for Medicare Management negotiated with about 300 Medicare Advantage plans and convinced them not to raise their premiums for 2011.

Karen Ignagni, president and CEO of America's Health Insurance Plans, in a prepared statement, said, "Nevertheless, as deep cuts go into effect in the coming years, government experts have forecasted that millions of seniors will experience higher costs, reduced benefits, and fewer choices.

Again, many of the Advantage feature will be covered under Medicare, and those who wish to negotiate will continue to provide services. Ignagni’s scare tactic is a cheap attempt to blunt the new negotiated lower rates.

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