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Post Published: Apr 21, 2016

ObamaCare’s Hidden Medicare Advantage Cuts [Video]

HHS Uses Extralegal Funds & Scheme to Delay Health Care Cuts until after Election Day

WASHINGTON – The House Oversight and Government Reform Committee today released a new video illustrating Secretary of Health and Human Services Kathleen Sebelius’s convoluted scheme to mask ObamaCare’s $200 billion in cuts to the popular Medicare Advantage program. Without Sebelius’ $8.3 billion scheme to postpone the pain, American seniors would have felt the cuts beginning this week.  The billions spent through the extralegal project is enough to offset 71% of ObamaCare’s Medicare Advantage cuts until after President Obama faces seniors in the November elections. Chairman Darrell Issa (R-CA) and Congressman James Lankford (R-OK) yesterday sent a letter to Secretary Sebelius threatening compulsory action should she continue stonewalling the Oversight Committee’s investigation.


“Your staff has run out of excuses and the long delay in providing these documents is inexcusable,” Issa and Lankford wrote to Sebelius.  “Your reluctance to provide the Committee with these documents suggests that the documents and communications do not justify the Administration’s assertion that there is no limit to what the Secretary of HHS can spend on demonstrations…Since GAO experts testified the Demonstration’s design makes it impossible for the project to ‘demonstrate anything,’ we are concerned that the only plausible explanation for the Demonstration is that you decided to utilize a loophole in the Social Security Act to temporarily cover up ObamaCare’s large cuts to the 13 million seniors enrolled in Medicare Advantage until after this year’s election.”

Under current law, HHS may conduct “demonstration projects” to test the impact of payment changes to Medicare programs.  However, the “Medicare Advantage Quality Demonstration Project” spent $8.3 billion – an amount greater than all 85 previous demonstrations combined. 

The Department authorized a “demonstration project” in which it spent $8.3 billion taxpayer dollars outside of its lawful authority to temporarily offset ObamaCare’s controversial cuts to the program serving 13 million seniors, or 27% of the Medicare population.  Last March, the Government Accountability Office recommended that the project be canceled. Currently, the project is set to expire in 2014.

In a July 25 hearing, Medicare Director Jonathan Blum asserted that HHS can spend an unlimited amount of unappropriated, unauthorized money on a Medicare demonstration project – simply ignoring the rules in place designed to keep demonstration projects budget-neutral.

Despite repeated promises, HHS has thus far refused to respond to the Committee’s request for additional information about their election-year “demonstration.”

You can read the Committee’s October 17th letter here. You can read the Committee’s September 27th letter here. You can read the August 1st letter here. You can watch video of the Committee’s July 25th hearing here. For more facts about the extralegal $8.3 billion project, click here.