The Department of Health and Human Services recently drew fiercerebuke from government auditors for its plan to earmark more than$8.3 billion in 2013 to Medicare Advantage plans that werepreviously scheduled to have massive funding cuts. The money wouldbe paid out as “demonstration project bonus payments” to MedicareAdvantage insurers in 2013, which likely would result in the MAplans being able to keep benefits to beneficiaries at the currentlevels, or even improved in some cases.

The reason for the media frenzy is the timing of this rathergenerous bonus money. Under the Patient Protection and AffordableCare Act, hundreds of billions in scheduled cuts to MedicareAdvantage subsidies should begin to take effect with the 2013Medicare Advantage plans. GAO auditors suspect the administrationis attempting to use these demonstration project dollars to delaythe cuts in Medicare Advantage plan benefits until the year afterthe presidential election.

Even though the PPACA cuts wouldn’t take effect until Jan. 1,the new 2013 benefits for each Medicare Advantage plan would bepublicized well in advance of that date, since the annual electionperiod begins Oct. 15.

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