Senator Orrin Hatch (R-Utah) said Monday that a Medicare Advantage demonstration program set up by Health and Human Services was likely used to avoid political fallout from planned cuts to Medicare Advantage. His conclusions are based upon a report from the General Accounting Office (GAO), a non-partisan government agency, completed at his request, which said the program is a waste of taxpayer dollars.
Medicare Advantage, a Medicare program that lets seniors buy private insurance, was cut in 2010 to help pay for the Affordable Care Act, or "Obamacare." The Department of Health and Human Services (HHS) began a pilot demonstration program in November 2010 that would pay bonuses, $8.35 billion worth over 10 years, to Medicare Advantage insurers who meet certain benchmarks.
The GAO's analysis of the program concluded that the program should be canceled. The two main issues cited were that most of the payments would go to insurers that only received average ratings and there is no control group to determine if the program is effective.
In a Monday press release, Hatch questioned whether the administration had the legal authority to begin the program. He also suggested that the program was being used to please the one in four Medicare beneficiaries who use Medicare Advantage in order to aid President Barack Obama's reelection chances.
"The Obama Administration launched this demonstration program to divert attention away from cuts to the popular Medicare Advantage program. The problem is, as GAO makes clear, that HHS appears to have abused its authority by creating what isn't really a demonstration program at all. Furthermore, it's unclear whether the Obama Administration even had the legal authority to undertake it in the first place. The Obama Administration seems to be using a technicality to side step Congress and write itself a blank check to spend more money for political purposes leading into this year's elections. This is simply unacceptable." said Hatch. "The White House does not have the authority to green light spending on whatever program it wants. This report is just the beginning – I will be demanding answers from HHS that American taxpayers deserve."
Republicans generally favor Medicare Advantage. Many of their reforms, such as in the recently passed House Republican budget, would essentially convert all of Medicare into a Medicare Advantage type program.
White House spokesperson Jay Carney said Monday that the White House disagrees with the GAO's conclusions and the pilot program "is important to improve the quality of Medicare Advantage."