The word "cut" is one of the most slippery and often-abused words in American political discourse. When there's talk about government budgets, "cut" is used to mean "any change that stops the rate of growth in whatever program we're talking about." So when the right-wing advocacy group The 60-Plus Association attacks the pending health reform by saying it will "cut" Medicare, it's not a blatant lie. Their attack ad, airing in Alaska and other states, is just a slippery propaganda tactic to scare seniors and get them to oppose health care reform.
In reality, what the health reform does to Medicare is this: It tries to slow the growth of Medicare spending while preserving standard Medicare benefits.
One way it does that is by reining in the excessively expensive private insurance option known as "Medicare Advantage" plans.
When first created, Medicare Advantage was a way of letting private insurers offer different coverage options to seniors. An "Advantage" plan might offer extra benefits in some areas, such as dental and vision, in return for cost-saving measures like enrolling in an HMO. Seniors get to choose the plan they like, and the federal government covers most, but not all, of the premiums.
Medicare Advantage plans were not supposed to cost the government any more than traditional Medicare coverage. In fact, they were promoted as a cheaper way to cover seniors, since the private sector is supposedly always more efficient than government.
But wouldn't you know, insurance companies got Congress and President Bush to create a complicated way of paying for Medicare Advantage coverage, and the new system actually boosted how much the government pays for each senior in the program. Now the plans cost about 14 percent more per senior citizen than traditional Medicare, which is run directly by the federal government.
Some versions of health care reform would cut this subsidy to private Medicare insurers. The savings would help pay for other health care reforms. The reforms do not cut traditional Medicare benefits.
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