Obama’s new healthcare dilemma

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Democrats are battling the White House over proposed cuts to Medicare Advantage, creating a new divide on healthcare just as the party had begun to rally around ObamaCare’s 7.1 million enrollees.

The issue threatens the newfound momentum Democrats have on healthcare after a late surge of ObamaCare enrollees surprised and electrified a party that had been beaten down after months of bad news associated with the healthcare law’s rollout.

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It’s particularly sensitive during an election year, as both parties court senior voters, who make up a disproportionate percentage of the voting population in midterm elections.

The issue creates another talking point for Republican candidates in a year when the party hopes to gain control of the Senate. 

Dozens of Democrats have joined Republicans in calling on the administration to keep Medicare Advantage rates flat to avoid cutting benefits for seniors.

The program has been championed by Republicans as a private market alternative to Medicare. Under the program, seniors can enroll in a plan offered by a private insurer, and the federal government pays the insurer directly.

Support for the program is a reversal for many Democrats, who have historically lampooned the alternative to government health insurance as receiving outsized federal support in comparison to Medicare. The Democratic-led Congress that passed the Affordable Care Act partially paid for it by enacting $200 billion in cuts to Medicare Advantage over 10 years.

The administration will announce 2015 rates for Medicare Advantage on Monday.

The opposition to the cuts includes Democrats who frequently differ from the administration on policy, such as Blue Dog Democratic Rep. John Barrow, a perennial GOP target in Georgia, and Sens. Mark Pryor (Ark.) and Mary Landrieu (La.), two of the party’s most vulnerable Senate incumbents.

It also includes White House allies and party heavyweights like Sens. Charles Schumer (D-N.Y.) and Michael Bennett (D-Co.), the chairman of the Senate Democrats’ campaign arm.

The opponents have written to the administration urging it to stop the cuts, and engaged in a House floor protest on Thursday to up the pressure.

“I oppose these cuts, and I have called upon the president to reverse course and protect this critical program,” Rep. Ron Barber (D-Ariz.), one of several Democrats to speak on the issue, said in a floor speech.

Republicans have vowed to make ObamaCare the primary issue in the 2014 election, and have already sought to tie Democrats to the proposed Medicare Advantage cuts as a part of that strategy.

Rep. Doug Jolly (R-Fla.) highlighted the issue in attack ads against Alex Sink (D-Fla.) in his special election victory last month.

And in Louisiana, a key healthcare battleground in the 2014 midterm elections, Rep. Bill Cassidy (R-La.) has attacked Landrieu over the cuts, even though the Louisiana Democrat opposes them. Cassidy argues that Landrieu’s vote for ObamaCare set in motion the cuts that she now opposes.

White House officials have pushed back at criticism of the pending cuts, noting that MA enrollment has spiked to an all-time high since the passage of the Affordable Care Act, and that premiums under the plan have fallen by 10 percent.

Still, Medicare Advantage isn’t nearly as politically potent an issue as ObamaCare, and Democrats may be blunting GOP attacks on the issue through their vocal opposition to the cuts.

It’s not just Congress at odds with the administration over the program. The White House is also facing off with the insurance industry, its hot-and-cold health reform ally.

Insurers have spent millions on a public relations blitz seeking to head off the cuts, reminding Washington that “seniors are watching.”

On Friday, America’s Health Insurance Plans (AHIP), the nation’s largest health plans industry group, released a video of the Thursday floor speeches from Democrats. AHIP also touted the more than 270 Washington lawmakers they say stand against the cuts, and the hundreds of industry groups and the tens of thousands of seniors that have participated in the campaign to keep rates flat.

The administration argues that the cuts rectify what it considers “overpayments” to the program, saying Medicare Advantage receives outsized benefits in comparison to traditional Medicare. GOP-backed policies direct more funding on average per beneficiary to Medicare Advantage, which can be used for extra perks, like gym memberships and free eyeglasses.

The Centers for Medicare and Medicaid Services (CMS) has argued that the reductions will help to strengthen the program by rooting out waste, and says enrollment in Medicare Advantage is on the upswing and forecasted to remain stable despite the cuts.

--This report was updated at 12:37 p.m.