09 Apr 2014 Medicare Advantage, Insurance Premiums and Chutzpah

“Great kid!  Don’t get cocky!”  Han Solo’s timeless warning about how to handle success (don’t let it go to your head and stay on your toes) applies as much today as it did back in 1977.  However, Paul Krugman always ignores it.  Here’s Krugman after the announcement that 7.1 million people had signed up on the Obamacare exchanges:

The biggest risk to reform has always been that the scheme would founder on its complexity. And now we know that this won’t happen….The nightmare is over. It has long been clear, to anyone willing to study the issue, that the overall structure of Obamacare made sense given the political constraints. Now we know that the technical details can be managed, too. This thing is going to work. And, yes, it’s also a big political victory for Democrats.

The general pattern of ObamaCare has been that when it appears something about it is working, something else soon follows to show that it’s not:

The Obama administration announced Monday that planned cuts to Medicare Advantage would not go through as anticipated….

Under cuts planned by the administration, insurers offering the plans were to see their federal payments reduced by 1.9 percent, which likely would have necessitated cuts for customers.

Instead, the administration said the federal payments to insurers will increase next year by .40 percent.

Medicare Advantage was supposed to be cut to the tune of $200 billion over ten years to, in part, help pay for Obamacare.  But, now suddenly, that doesn’t seem necessary:

The Centers for Medicaid and Medicare Services (CMS) on Monday said changes in the healthcare market meant it did not need to make those cuts to Medicare Advantage this year.

It cited an increase in healthy beneficiaries under Medicare, which it said has lowered projected costs for that program.

Uh huh.  Here’s the real reason:

The announcement comes after insurers spent millions on a public relations blitz seeking to head off the cuts, and after dozens of Democrats joined Republicans in calling on the administration to keep MA rates flat to avoid cutting benefits for seniors. (Bold added.)

Guess the Democrats don’t want to have to explain both why people lost their insurance and why seniors saw cuts in the Medicare Advantage plans.

Here’s betting they won’t want to explain this either:

Americans have recently been hit with some of the largest premium increases in years, according to a Morgan Stanley survey of insurance brokers.

The investment bank’s April survey of 148 brokers found that this quarter, the average premium increase for customers renewing an insurance plan is 12 percent in the small group market and 11 percent in the individual market, according to Forbes’ Scott Gottlieb.

What was that about a political victory for Democrats?