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Cuts to Medicare Advantage: A Key Issue in the Election

Once Again, Medicare Advantage Becomes an Election Issue

Just like in the midterm elections of 2014 and the presidential elections of 2016, Medicare Advantage will be a key issue for voters to consider as they head to the polls in 2018.

As usual, the midterm elections will be a showdown between the Republicans and Democrats. The overall strategy for both parties is to elect enough representatives and senators to tilt the balance of power so that they can confidently advance their respective legislative agendas. As the situation stands, healthcare reform is high on the lists of both agendas.

The Affordable Care Act, a mostly Democratic effort, requires significant funding from various sources. One of these sources happens to be cuts to Medicare Advantage, a plan created by Republicans. To fund the ACA, more commonly known as Obamacare, Democrats resolved to cut subsidies from Medicare Advantage, which is a private option enjoyed by about a third of the people enrolled in Medicare.

Even though both Medicare Advantage and Obamacare plans are subsidized health insurance programs, the ACA has proven to be the more expensive of the two. At some point, seniors will start to feel the $156 billion cut from Medicare Advantage to fund Obamacare. It’s important to remember that Advantage plans are the private version of Medicare, but you still must be enrolled in Parts A and B before signing up.

Medicare Advantage and Obamacare have succeeded in improving access to healthcare benefits, but the ACA has not been the panacea of universal insurance that many Americans expected. Whereas Obamacare is mostly an insurance reform measure that was desperately needed in the United States, Medicare Advantage is a way to address the shortcomings of Medicare, a 50-year-old government program that does not always address the healthcare needs of patients. Rising premiums and high deductibles have been a problem for the Obamacare program, and the same can be said about deductibles. Medicare Advantage, on the other hand, has proven to be more efficient and beneficial since it lacks an individual mandate and does not discriminate based on pre-existing conditions.

Why Medicare Advantage Becomes a Political Issue

According to the Centers for Medicare and Medicaid Services, nearly 20 million seniors across the country were enrolled in Medicare Advantage as of 2018. For political campaign managers, this statistic translates into a substantial number of potential votes. Enrollment rates in Medicare Advantage have gradually increased since the ACA was implemented, and this increase has been parallel to the rate of Obamacare enrollments.

If Medicare Advantage is working as intended, it stands to reason that reducing subsidies to this program runs against one of the fundamental principles of Obamacare, which is to keep Americans healthier, but this also requires participation by physicians. When subsidies are cut from the Advantage program to fund Obamacare, doctors and health management organizations are more likely to become discouraged.

Most healthcare professionals will go where the money goes; if they feel that Obamacare has more earning potential than Medicare Advantage, they will likely gravitate towards the ACA because they stand to earn more. For this reason, cutting back on Medicare Advantage subsidies is a risky proposition.

Medicare Advantage is a political issue mostly because it was largely passed by Republicans who do not want to see funding cut from the program to subsidize Obamacare, a program largely passed by Democrats. Thinking along party lines is not a smart way to approach these two healthcare programs. If anything, both Democrats and Republicans should give state health officials more freedom to reform these programs according to the needs of their populations.

Preventing cuts to Medicare Advantage will prove difficult at a time when the tax reform package supported by the Trump administration is starting to prove challenging in terms of covering the deficit; however, there is considerable support from both parties to keep the program adequately funded. Enrollment statistics prove the need for this program. In populous states such as California and Florida, more than 40 percent of seniors are enrolled. The only state with low rates of Medicare Advantage enrollment is Alaska, where the population is young compared to the rest of the country.

When putting Medicare Advantage into a political context, Congressional candidates cannot ignore demographics. The U.S. is an aging nation that requires a fiscally strong Medicare as well as a solid private option like Medicare Advantage. While young states such as Alaska can get by with Medicare Advantage cuts, such cuts could prove disastrous for states with older populations. Striking the right balance between government involvement and personal responsibility will play a large role in shaping the future of these and other healthcare initiatives, beyond the scope of 2018 midterm elections.


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