Report: Medicare Advantage costs drop closer to traditional plans

Private Medicare Advantage (MA) plans that Democrats have long criticized for costing taxpayers more than traditional Medicare have been getting paid progressively less for the past several years, according to a new Commonwealth Fund report.

Payments to Medicare Advantage plans have exceeded traditional Medicare payments since passage of Republicans' Medicare Modernization Act in 2003. MA payments exceeded traditional Medicare by 13 percent in 2009 but only 8.9 percent in 2010.

That puts the plans on track to meet the goals of Democrat's healthcare reform law, which evens out payments between MA plans and traditional Medicare.

The law takes a $200 billion chunk out of MA payments. 

While Democrats say that will put the private plans on an equal footing with traditional Medicare, health insurers say they'll have to raise premiums or cut MA benefits such as vision care and gym memberships.