WASHINGTON (AP) — Turning a usually routine announcement into a pointed rebuttal of its GOP critics, the Obama administration said Thursday that premiums for popular Medicare Advantage insurance plans will drop for 2012, while enrollment is expected to rise.
That's welcome news for President Barack Obama and Democrats, who are struggling with older voters ahead of a hard-fought election looming next year.
Republicans have accused Obama of undermining Medicare to finance his health care overhaul. Indeed, during this week's GOP presidential debate, Minnesota Rep. Michele Bachmann claimed the president "stole" from Medicare to pay for his plan.
But Health and Human Services Secretary Kathleen Sebelius said Thursday that Medicare Advantage premiums will average 4 percent less in 2012 and insurers running the plans project enrollment will jump by 10 percent.
Officials said the average plan premium will be $32 a month in 2012, compared with the 2011 average of $33.48.
Sebelius went on to take a jab at GOP critics. She said many people raised fears that under the new health law, options in Medicare Advantage would narrow and premiums would climb. "Instead, we are seeing just the opposite."
Medicare Advantage provides a choice of private insurance plans that usually offer lower out-of-pocket costs than traditional Medicare. Its popularity has increased steadily and now about one-quarter of Medicare's 48 million beneficiaries are signed up.
Previously the plans had been overpaid when compared with the cost of care in traditional Medicare. When the health care law scaled that back, cutting more than $130 billion over 10 years, it prompted warnings of an exodus from the program.
That hasn't happened yet, although the insurance industry and independent experts predict that it will eventually.
Obama's health care law staggered Medicare Advantage cuts to make them more manageable. His administration has worked to soften the impact in the initial years, for example, by pumping in $6.7 billion in quality bonuses, most of which will be awarded to plans rated merely average.
Republicans said that's a patch. "The new enrollment numbers are encouraging, but driven by a temporary increase in bonus payments," said Julia Lawless, spokeswoman for Utah Sen. Orrin Hatch, senior Republican on the Finance Committee, which oversees Medicare.
Sebelius asserted that Obama's health law is making Medicare stronger, providing new preventive benefits and cutting costs for older people with high prescription drug bills.
"We are taking the right approach to Medicare," she said.
Some consumer groups agreed. "Premiums continue to decrease on average, and in general benefits continue to remain stable, despite some doomsday predictions," said Joe Baker, head of the advocacy group Medicare Rights Center.
But the insurance industry says a reckoning will come sooner or later.
"As these cuts take effect in the coming years, Medicare Advantage beneficiaries will face higher out-of-pocket costs, reduced benefits, and fewer health care choices," said Robert Zirkelbach, a spokesman for the industry trade group America's Health Insurance Plans.
Open enrollment season for Medicare Advantage starts Oct. 15 and lasts until Dec. 7.
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