WASHINGTON - -With the wildfire over so-called "death panels" still smoldering, President Barack Obama faces what could become another emotion-charged obstacle to his vision of overhauling health care - his plan to trim the federal subsidy for a program called Medicare Advantage.
The program pays insurance companies a hefty premium above traditional Medicare reimbursements for enrolling senior citizens in managed care. But whether the higher payments are worth the cost is a matter of dispute.
Obama and many congressional Democrats see Medicare Advantage as a wasteful bonanza averaging about $17 billion a year for the companies, which critics say provide few benefits beyond regular Medicare. And cutting out the extra pay is crucial to financing the health care overhaul under the Democrats' plans.
The companies and their supporters say they earn the extra payments by providing seniors with significant added benefits, including freedom from government red tape. And many Medicare recipients who may pay nothing for the "extras" seem to agree. Almost a quarter of Medicare beneficiaries are enrolled in Advantage programs.
But what lifts the disagreement over Medicare Advantage above many other points of contention in health care is its potential for spreading fear and outrage among Medicare recipients as a whole, much like the outcry after Republicans accused Democrats of trying to create "death panels" to cut off care for severely ill seniors.
Though scaling back Advantage payments would have no effect on most Medicare users, it would create an opening for opponents to make the allegation that Obama wants to cut Medicare benefits, as some Republicans are beginning to say. Obama and his supporters acknowledge the risk.
"Some beneficiaries will be dislocated," said Robert Berenson, a physician and health care policy analyst at the Urban Institute. "This is not painless."
The White House is counting on persuading seniors, with their powerful lobbying presence in Washington, that in order to fix the health care system, they have to cut the fat out of one part of it.
For the past few years, Medicare Advantage has been a sheltered corner of the national health plan. When congressional Republicans began expanding private insurance Medicare options in 1997, advocates said the plans would deliver services more efficiently, and hence less expensively, than Medicare's traditional fee-for-service reimbursement. But the spending on Advantage plans grew, with critics contending that GOP majorities were deliberately overfunding it to make the private plans more attractive to seniors than traditional Medicare.
