Seniors defend Medicare plan Obama calls 'wasteful'

WASHINGTON -- One of the largest spending cuts Congress could rely on to pay for an overhaul of the nation's health care system comes from a Medicare program President Obama has called a "wasteful" subsidy for the health insurance industry.

Don't tell that to cancer survivor Maurice Engleman, 82, who says the controversial Medicare Advantage program — which allows seniors to buy Medicare coverage through private insurance companies — helped him beat cancer.

"There was a seamless link between the medical support and the emotional support," said Engleman, who was diagnosed with tongue cancer last year within a week of his wife's death. "I don't believe Medicare would have taken care of the kind of services I required."

Debate over Medicare Advantage, which has 10.2 million enrollees — about one-fifth of all Medicare participants — illustrates a broader struggle Congress and Obama face as they look for ways to pay for a $1 trillion overhaul of health care without raising taxes on the middle class or compromising care.

It has raised concerns among some seniors who might have to pay more for the program or enroll in regular Medicare instead. A Gallup Poll last week found 20% of Americans over 65 say an overhaul will improve their health care — the lowest showing of three age groups.

Medicare Advantage has its roots in the 1970s but was bolstered in 2003 in hopes that private companies could manage Medicare patients more efficiently. Partly because it often has lower out-of-pocket costs than traditional Medicare, enrollment has nearly doubled over six years, according to a Kaiser Family Foundation report.

Critics, including Obama, say the plans offer lower premiums because insurance companies are subsidized by taxpayers at a rate 14% higher per patient than regular Medicare. Lawmakers initially set a higher reimbursement rate to draw private insurers into the program. The non-partisan Congressional Budget Office says eliminating the disparity would save $150 billion over 10 years.