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Medicare Cuts Threaten High-Quality Health Care for 11 Million Seniors

September 21, 2009

Despite President Obama’s claims to the contrary on Sunday morning news programs, he and Congressional Democrats are proposing massive cuts to Medicare, which will reduce benefits and options that improve the quality of care for seniors.  As previously detailed, a total of 6 million seniors will be denied access to an affordable Medicare Advantage (MA) plan because of H.R. 3200, including 3 million seniors who will lose the plan they currently have

Further, a recent study shows that, when compared to seniors enrolled in traditional Medicare and adjusted for health risk, seniors in MA spend fewer days in the hospital, are less likely to be re-hospitalized, and have fewer preventable readmissions. 

  • In California, seniors in MA plans had hospital stays that were 30% shorter than their counterparts in traditional Medicare.  Similarly, in Nevada seniors enrolled in MA had 23% shorter hospital stays;
  • In California, seniors in MA plans were 15% less likely to be re-hospitalized for the same condition after being discharged than their counterparts in traditional Medicare.  In Nevada readmission rates for MA were 33% lower; and
  • In both California and Nevada, avoidable readmissions were 6% lower for seniors enrolled in MA.

Moreover, there is evidence that these lower readmission rates are the result of seniors in MA receiving better discharge planning and follow-up care.  Similarly, HHS’ Agency for Healthcare Research and Quality (AHRQ) analyzed data from 13 states and found on average hospitalizations for seniors in MA cost less than hospitalizations for seniors enrolled in traditional Medicare.  If traditional Medicare had been able to harness similar efficiencies, federal spending for inpatient hospital stays – just in those 13 states – would have declined by more than $970 million in 2006 alone.   

And these gains may also be improving care for seniors in traditional Medicare.  The National Bureau of Economic Research found that in counties with a high level of MA enrollment, these plans have a spillover effect into traditional Medicare.  MA plans increase doctor and hospital efficiency in an area and those changes, in practice, apply to both seniors in MA and traditional Medicare.  By reducing MA enrollment, the Democrats’ health bill (H.R. 3200) threatens to reverse these gains. 

President Obama has consistently said the goal of health care reform is to provide everyone with access to quality health insurance.  But, H.R. 3200 will result in 1 in 5 seniors no longer having any MA plans offered where they live.  Which begs the question, if quality and efficiency are the keys to health care reform, why are Democrats gutting plans that have improved both for millions of seniors?