WASHINGTON – In a rebuke to the Obama administration, government auditors are calling for the cancellation of an $8 billion Medicare program that congressional Republicans have criticized as a political ploy.
The nonpartisan Government Accountability Office says in a report to be released Monday that the $8.3 billion the administration has earmarked for quality bonuses to Medicare Advantage insurance plans would postpone the pain of cuts to the plans under the new health care law. Most of the money would go to plans rated merely average.
The administration is defending the program, saying that without the bonuses many plans wouldn't have an incentive to improve quality.
But Sen. Orrin Hatch, R-Utah, says the GAO report suggests that the administration abused its authority, pumping money to the plans to avoid more criticism over unpopular cuts.
Medicare Advantage is a popular private insurance alternative to the traditional health care program for seniors. More than 3,000 private plans serve nearly 12 million beneficiaries, about one-fourth of Medicare recipients. They offer lower out-of-pocket costs, usually in exchange for some limitations on choice.
President Barack Obama's health care law trimmed Medicare Advantage to compensate for prior years of overpayments that had allowed the plans to offer attractive benefits -- and pocket healthy profits.
Republicans fiercely attacked those cuts during their successful campaign to take control of the House in the 2010 midterm elections. Seniors, a key constituency of swing voters, responded by backing GOP candidates.
After the election, the administration announced what it called a "demonstration program" to test whether a generous bonus program would lead to faster, broader improvements in quality. (The health care overhaul law had already provided a smaller bonus program only for top-rated plans.)
GAO, the investigative agency of Congress, did not address GOP allegations that the bonuses are politically motivated. But, its report found the program highly unusual. It "dwarfs" all other Medicare pilots undertaken in nearly 20 years, the GAO said.
And there is this...