On Medicare Advantage, McCain Flips And Inflates

mccainflips.jpgWhen Congress voted to make “cuts to the private Medicare Advantage program” in order to finance the deferment of a 10.6% physician fee cut for doctors who treat Medicare patients, McCain claimed that bringing Medicare Advantage reimbursements in line with traditional Medicare “places 2.3 million seniors at risk of losing the private health care coverage of their choice.”

But last week, when questioned about how to plug the budget hole in his health care plan, McCain reversed course and came out in support of parity. During a conference call with reporters, Holtz-Eakin said that cutting subsidies to insurers through Medicare Advantage would save $1 trillion over 10 years:

And in the context of a comprehensive reform of this type, where insurance is reformed, the subsidy to private insurance is reformed, Medicare payment polices are reform, we see no reason why the Medicare Advantage plans should continue to get a $15-billion-a-year subsidy. We’ll put them on a level playing field and save some money there….Equalizing M.A. payments: $150 billion. Over 10 years, that’s a trillion dollars.

Here, the campaign flipped and inflated, overstating the actual savings by billions and billions of dollars. According to the Congressional Budget Office, reducing payments to Medicare Advantage plans “would save $54 billion over the 2009-2012 period and $149 billion over the 2009-2017 period” — a far cry from Holtz-Eakin’s ‘trillion dollar’ estimate.

McCain has acted “mavericky” with numbers before. In April, after CAPAF Senior Fellow Elizabeth Edwards suggested that neither she nor McCain would find coverage under his individual-market-centric health proposal, the campaign unveiled their Guaranteed Access Plan to offer so-called uninsurables government subsidized insurance though state-run high risk pools.

The campaign’s initial funding estimates of $7-10 billion elicited laughter from serious analysts who claimed that McCain would have to allocate approximately $100 billion to cover everyone his plan leaves behind. Holtz-Eakin responded by claiming that budget hawk McCain would actually allocate as much as necessary to “get the job done“:

So his 7 to 10 estimate, it was a ballpark estimate. It could be higher. The commitment is to get the job done…It could be $20 billion and you could make it work if you do the rest of the reforms in the McCain plan.

True to form, with just fourteen days until the election, the McCain campaign is throwing out a plethora of contradictory ideas and hoping something sticks. Unfortunately, their patchwork proposal won’t benefit the majority of Americans.