Congress and the incoming Obama administration are poised to slash subsidies to private insurers under Medicare, a move that could significantly change the landscape for health plans in the entitlement program — and their beneficiaries.

A longstanding ideological battle between liberals and conservatives over the propriety of turning over a growing portion of the Medicare entitlement to private companies is meeting head-on with the need for Congress to make cuts to certain programs in order to finance other priorities.

The government spends $94 billion a year on Medicare Advantage subsidies. Democrats say $15 billion of that amount is excessive and that these so-called overpayments to private insurers could be spent on other things, such as comprehensive healthcare reform.

Earlier this year, Congress overrode President Bush’s veto to enact $14 billion in cuts to Medicare Advantage over five years.

“Further cuts are coming to the program. The payments are so high that they really don’t make any sense right now. There really is no rationale for the level of payments,” a Democratic congressional aide said Monday at an event sponsored by the journal Health Affairs.

Democrats are not alone in their skepticism about the value of the dollars set aside for Medicare Advantage, though Republicans generally are skeptical of Democratic plans to make deep cuts to the subsidies.

A Republican aide emphasized at the event that government-run Medicare, by far the largest healthcare purchaser in the United States, influences the market to such a degree that the private plans’ performance cannot be evaluated fairly.

“The underlying Medicare fee-for-service program hugely distorts the market for healthcare services,” the GOP aide said. “Generally, Republicans have concerns about public programs crowding out private options.”

Private health insurance companies, which provide benefits under the Medicare Advantage program, count nearly one-quarter of Medicare enrollees on their rolls.

Deep cuts in the subsidies to these plans could cause them to abandon Medicare, creating uncertainty for the more than 10 million seniors and disabled people signed up for Medicare Advantage plans.

The funds targeted for cuts allow private plans to offer extra benefits, such as vision and dental coverage, which traditional Medicare does not provide. In addition, the plans can reduce beneficiaries’ out-of-pocket costs.

Enrollment in the private plans grew — simultaneous with the introduction of private Medicare Part D prescription drug plans — but so did costs.