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Medicare Set for Big Cuts Under Overhaul Plans

Depending on which, if any, health care reform plan passes through Congress, Medicare faces cuts as high as $500 billion. But what would cuts entail? Gwen Ifill reports.

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  • JIM LEHRER:

    And still to come on the NewsHour tonight: going for the Olympics; closing a prison; and remembering a man of words.

    That follows our look at proposals to cut Medicare costs. Gwen Ifill has that story.

  • GWEN IFILL:

    Medicare would be a lucrative source of hundreds of billions of dollars in cuts or savings over the next decade. The House bill calls for shaving more than $500 billion off the program's expected growth. That would mean lowering payments to hospitals, nursing homes, and other providers. The Senate version, now in committee, would reduce the program by more than $400 billion.

    But in both cases, Medicare Advantage, a supplemental plan that pays private health insurers more than traditional Medicare, would be trimmed. Nearly 1 in 4 seniors are in Medicare Advantage.

    Such proposals are causing plenty of anxiety for beneficiaries and providers. We look at this key sticking point now with Joseph Baker of the Medicare Rights Center and advocacy group and Gail Wilensky, a former administrator of the federal Medicare program. She is now a senior fellow at Project HOPE, which supports international health education.

    Gail Wilensky, one man's or one woman's cuts are another's savings. Which is this?

  • GAIL WILENSKY:

    It's both. To pretend that you can take the kind of money out of Medicare Advantage that is being discussed and not impact the benefits that people who are used to receiving these benefits will receive is just not fair to the seniors.

    What we don't know is whether we'll see the kind of disruption we saw almost a decade ago when there was a significant reduction in what was then called Medicare Plus Choice. In that case, 900,000 seniors who had been enjoying plans found themselves without the plans that they had been used to.

    We don't know what this reduction might produce, but as the Congressional Budget Office head, Doug Elmendorf, indicated last Friday, there will be a reduction in benefits for people who've been on these plans.

  • GWEN IFILL:

    What kinds of benefits are you talking about that they wouldn't get under regular Medicare?

  • GAIL WILENSKY:

    Well, regular Medicare is very siloed health care. You have physicians and hospitals and drug benefits, but there's no interaction. And for many seniors who have multiple chronic diseases, one of the important advantages that Medicare Advantage has been able to provide is disease management and coordination among their physicians, particularly for people who have a lot of complex diseases. Plus, they get extra benefits frequently, like dental or vision, and very little in the way of premiums.

    These are, for the most part, minorities and/or very low-income, but not quite low enough to be on Medicaid. I think the numbers that the government has put out is that half of the people on Medicare Advantage are with incomes at $20,000 or less, so these are relatively low-income seniors who have been used to having these extra benefits.