10 Myths About Health Care Reform

Medicare Benefits Will Be Slashed
A volunteer with AARP and the Legal Counsel for the Elderly hands out literature about Obamacare and Medicare in Washington, DC. © Leigh Vogel/Corbis

Medicare's budget will be cut under the Affordable Care Act, by as much as $716 billion. That cut will primarily come from Medicare reimbursements to doctors and hospitals, but more than $100 billion will be cut from the Medicare Advantage program by 2017. It's expected this will result in the loss of some Medicare Advantage benefits, but four years into the budget cuts, the program's benefits have remained stable. In fact, between 2010 when the new law took effect and 2013, the program's enrollment rose 30 percent [source: Pickert].

It's important to note, though, that Medicare Advantage differs dramatically from traditional Medicare. Medicare Advantage is more akin to private insurance because it's administered by a private company, yet subsidized by the government. That subsidy costs the government an additional 14 percent per person in Medicare Advantage compared to a person with traditional Medicare. With that subsidy, insurance companies may provide extra perks to beneficiaries like a gym membership or slightly cheaper prescription drugs, but it doesn't provide any "essential benefits" that affect the overall health of the individual. When the cuts to Medicare Advantage occur, some of those perks may disappear, but such cuts won't affect those with traditional Medicare, which is about 75 percent of Medicare beneficiaries [source: Kaiser Health Service]. The beneficiaries of Medicare Advantage will receive the exact same care as those in traditional Medicare without costing the government 14 percent more.