Mar 2, 2023 - Politics & Policy

Scoop: GOP spends $2 million trying to flip the script on Medicare

A group closely aligned with House Republican leadership is spending over $2 million to accuse President Biden of being the one who truly wants to cut Medicare, Axios has learned.

Why it matters: It's some of the earliest spending of the 2024 election cycle and signals that Republicans plan to go on offense, rather than just defend against Biden's claims that the GOP wants to slice into Medicare and Social Security.

Driving the news: American Action Network, the nonprofit issue advocacy arm of the Kevin McCarthy-aligned Congressional Leadership Fund, is running TV and digital ads attacking the Biden administration's efforts to claw back $4.7 billion from Medicare Advantage plans.

  • "President Biden is proposing massive Medicare Advantage cuts to seniors that could smash over $500 in benefits per retiree," the ads say, also accusing Democrats of "raiding" Medicare to fund the Inflation Reduction Act.
  • They target a dozen of the most endangered House Democrats, including Reps. Mary Peltola (D-Alaska), Jared Golden (D-Maine), Marie Perez (D-Wash.), Marcy Kaptur (D-Ohio) and Matt Cartwright (D-Pa.), the five Democrats in districts that former President Trump won in 2020.
  • The other frontliners targeted: Reps. Yadira Caraveo (D-Colo.), Dan Kildee (D-Mich.), Don Davis (D-N.C.), Wiley Nickel (D-N.C.), Greg Landsman (D-Ohio), Emilia Sykes (D-Ohio) and Susan Wild (D-Pa.), almost all freshmen.

The big picture: Republicans have stepped up their attacks on Biden's plans for Medicare Advantage in recent weeks as Biden repeatedly has accused Republicans of wanting to force Medicare and Social Security cuts as part of the negotiations over raising the debt ceiling.

  • Republicans have insisted cuts to the popular entitlement programs — particularly those cherished by seniors, a key voting bloc — are off the table, despite some proposals circulating in the GOP to cut them.

Context: Medicare Advantage is a private health insurance alternative to Medicare and often offers extra benefits such as dental and vision coverage.

  • A recent policy from the Biden administration will result in taking back about $4.7 billion from Medicare Advantage insurers over 10 years, though the government argues that these were overpayments that shouldn’t have been made in the first place.
  • The other reference in the ad is to a proposed Medicare Advantage rule that would take place next year. It proposes a 1% average increase in revenue to plans, though it's lower than this year's average increase of 8.5%.
  • Health insurance plans say this change in payment amounts to a cut and could affect plan's benefits or raise premiums, while the Biden administration maintains that it won’t change benefits.

What they're saying: "This isn’t a cut, it’s an increase," Health and Human Services spokesperson Kamara Jones said of the claims about the Medicare Advantage payment rule. "Industry opposition to being held accountable for gaming the system responsible for seniors’ health care should speak volumes to their intent."

  • An HHS spokesperson said the administration has proposed a nearly 10% increase in payments to Medicare Advantage over the span of two years, with a proposal this year that is projected to increase payments to Medicare Advantage plans by roughly $4 billion.
  • "Claims that this administration is cutting benefits or increasing premiums are a calculated mischaracterization," the spokesperson said. "Our proposals will ensure stability for people who choose Medicare Advantage."

Between the lines: The truth of whether these proposed changes actually amount to a "cut" is nuanced, said Joseph Antos, a senior health scholar at the American Enterprise Institute — echoing what other health policy specialists have told Axios.

  • “Obviously the plans argue that all of it is a cut. That’s not exactly true,” Antos told Axios. “Democrats in Congress say there is no cut at all, and that’s not exactly true either. Any money that comes out, it will have an effect on what Medicare Advantage plans offer beneficiaries."

The Committee for a Responsible Federal Budget, which advocates for reducing federal debt, has debunked the claim that the Inflation Reduction Act's drug pricing negotiation provision — which lowers Medicare costs by $300 billion — amounts to a cut.

  • An HHS spokesperson said the claim is a "gross mischaracterization" that "sidesteps [the IRA's] clear benefits to seniors and people with disabilities."

Editor's note: This story has been updated with additional context and comment from HHS.

Go deeper