The Medicare and Medicare Advantage cuts will total almost $500 billion, and there has never been, is not now and never will be the political will to cut these benefits. Newt and the Repubs tried to slow the growth of Medicare in the 1990’s and were skewered by Clinton and the Dems. The Repubs were doing the right thing, but politically it was disastrous. History has a way of repeating itself.
Medicare Advantage rates were cut for 2010. The way they are postponing the fix of the physician fee schedule reduces MA 2011 payment rates by several percentage points. Reduction of MA payment rates is a given. The extent of the reduction is open to debate. In general, I agree with you that gutting Medicare is political dynamite. The problem is we are out of money and out of time. Pretty soon, we are going to find out it’s not so easy to borrow $1T+ for years on end, and then the S is going to hit the F. Unti then, they will try to squeeze providers, increase means testing (means testing has already crept into Medicare in that Part B premiums vary based on income level), and do whatever else it takes.